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2022 Carbon Emissions Tech Report 1271

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EMERGING TECH RESEARCH
Carbon & Emissions
Tech Report
VC trends and emerging opportunities
Q3
2022
Contents
Vertical overview
3
Institutional Research Group
Q3 2022 timeline
4
Analysis
Carbon & emissions tech landscape
5
Carbon & emissions tech VC ecosystem market map
6
VC activity
8
Data
Emerging opportunities
16
Alyssa Williams Data Anaylst
AI-powered robotics
17
Publishing
Carbon offset trading platforms
18
Report designed by Drew Sanders
Energy-efficient carbon capture
19
Published on November 10, 2022
Select company highlights
John MacDonagh Senior Analyst, Emerging Technology
john.macdonagh@pitchbook.com
pbinstitutionalresearch@pitchbook.com
20
Monolith
21
H2 Green Steel
23
This report provides an overview of the carbon &
emissions tech vertical and includes a market analysis,
industry segmentation, and venture data tracked
through Q3 2022.
Q3 2022 Carbon & Emissions Tech Report
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 2
Vertical overview
The carbon & emissions tech vertical includes technologies to capture, store, and utilize emitted
carbon; reduce the emissions from various sectors; and monitor physical assets containing stored
Inflation Reduction Act
carbon. Also included are software offerings for carbon accounting—aimed at both corporations
and consumers—and platforms that allow carbon offset trading. Key themes affecting VC
Inflation Reduction Act
of 2022
investment in carbon & emissions tech include regulatory pressure, incentivization through policy
change, consumer and corporate interest in sustainability, and a desire to reduce energy costs.
In the US, the Inflation Reduction Act (IRA) was passed on August 16 and represents the most significant
climate bill in the history of the US. The act commits approximately $370 billion to combat climate change
through a combination of tax credits, grants, loans, accelerators, and rebates; these measures are far
Carbon Tech
Built
Environment
Industry
Land Use
The Advanced Industrial
Facilities Deployment
Program includes $6bn for
grants and loans to reduce
emissions associated with
manufacturing of steel and
chemicals through
approaches such as carbon
capture, use of low-carbon
fuels, or transition to more
efficient approaches.
$5bn in grants to support
healthy fire-resistant forests
and forest conservation, plus
$2.6bn in grants to conserve
and restore coastal habitats.
reaching and also affect clean energy, supply chain technology, electric vehicles, and agriculture. Within
carbon & emissions tech, the IRA affects each of our four segments.1 Given the limited time since the IRA
was signed, it is still early to have seen significant change in VC markets, but we expect the IRA to be a core
driver of US investment in carbon & emissions tech—supporting both new startups and existing projects.
Beyond the IRA, European policy continues to apply pressure to greenhouse gas emissions. The
European Union’s main tool for managing carbon emissions is the EU Emissions Trading System, which
sets an overall cap for carbon emissions that is reduced on a regular basis. This decrease in overall
allowances increases the price that emitters must pay to emit carbon, thereby reducing emissions.
Carbon removal approaches have advanced in recent quarters, particularly at startups (though
Increases to the 45Q tax
credit have significantly
increased the potential
value that companies
capturing emitted carbon
can claim as a tax credit.
Funding for decarbonization in the industry and
built environment
segments can apply to
utilization of carbon
removal technology.
$9bn in consumer home
energy rebate programs,
plus 10 years of consumer
tax credits to improve home
energy efficiency (through
installation of heat pumps,
solar, electric HVAC, efficient
water heaters, etc.).
Some additional support
from the Advanced Industrial
Facilities Deployment
Program, which includes
efforts to decarbonize
cement and structural steel
production.
large established entities such as oil and gas companies are also investing heavily in carbon
removal). Many of the startups focusing on carbon capture are attempting to develop more
energy-efficient approaches than current established technology.
1: For a full breakdown of changes to the 45Q tax credit, see Postcombustion Carbon Removal.
Q3 2022 Carbon & Emissions Tech Report
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Q3 2022 timeline
Q3 VC deal count summary
53.0%
Commodity exchange platform Xpansiv,
specializing in environmental commodities
such as carbon offsets, raises $400.0 million
in late-stage VC funding.
August 30
August 15
Waste management and recycling software
company Rubicon completes a SPAC merger
at a $1.7 billion valuation.
News
July 6
VC exit
VC deal
QoQ growth
EU Commission President Ursula von der
Leyen rebuffs a call to temporarily suspend
the EU’s ETS, which was intended to partially
mitigate rising energy prices.
16.9%
TTM growth
7.5%
Sept 30
Sept 1
August 16
September 26
Natural gas to carbon black and hydrogen
company Monolith raises $300 million in
late-stage VC funding.
President Biden signs the Inflation Reduction
Act of 2022, which includes approximately
$370.0 billion to address climate change
through a combination of tax credits, grants,
and other funding initiatives.
Leaks are detected in the Nord Stream 1
and 2 pipelines connecting Russia with
Germany. This potentially represents
the largest single release of the potent
greenhouse gas ever recorded.2 An
investigation into the cause is ongoing.
News
July 14
News
VC deal
Jul 1
Aug 1
YTD growth
Q3 VC deal value summary
34.7%
QoQ growth
-1.6%
TTM growth
6.8%
YTD growth
2: “Nord Stream Rupture May Mark Biggest Single Methane Release Ever Recorded, UN Says,” Reuters, September 30, 2022.
Q3 2022 Carbon & Emissions Tech Report
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Carbon &
emissions tech
landscape
1
Carbon tech
2
Industry
3
Built environment
4
Land use
Q3 2022 Carbon & Emissions Tech Report
1
2
3
4
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 5
Carbon & emissions tech VC ecosystem market map
Click to view the interactive market map on the PitchBook Platform.
Market map is a representative overview of venture-backed or growth-stage providers in each segment.
Companies listed have received venture capital or other notable private investments.
Carbon tech
Industry
Direct air capture
Carbon fintech & consumer
Green mining
Recycling - polymers
Point-source carbon capture
Carbon utilization
Lithium battery recycling
Recycling - analytics
Biological carbon removal
Manufacturing and chemicals
Carbon accounting/analytics
Recycling - metals
Q3 2022 Carbon & Emissions Tech Report
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Carbon & emissions tech VC ecosystem market map
Click to view the interactive market map on the PitchBook Platform.
Built environment
Market map is a representative overview of venture-backed or growth-stage providers in each segment.
Companies listed have received venture capital or other notable private investments.
Land use
Green construction
Fertilizer alternatives
Building energy efficiency
Ecosystem health and monitoring
Heating and cooling
Climate/Earth data
Q3 2022 Carbon & Emissions Tech Report
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VC activity
Q3 2022 was a strong quarter for venture capital (VC) investment in carbon & emissions tech,
representing the third-strongest quarter on record for this space, with a total VC deal value of
Carbon & emissions tech VC deal activity
$4.8 billion (with Q3 2021 at $5.4 billion and Q2 2021 essentially tied with Q3 2022 at $4.8 billion).
Looking at the last 12 months, total deal value has increased each quarter, with particularly strong
656
growth from Q1 2022 to Q3 2022. Deal count for Q3 2022 was at its highest point on record
at 231 deals.
517
The largest deals in this space include lithium battery producer and recycler Northvolt, which
raised $1.1 billion in late-stage VC funding. Northvolt is building Europe’s largest battery recycling
414
plant—aiming to source 50% of raw materials for cell production from recycling by 2030. 3
Though the Industry segment had the largest deals in Q3, other areas also saw high-value deals.
347
Environmental commodity trading platform Xpansiv raised $400.0 million early in the quarter—the
largest deal in the carbon tech segment this quarter.
Regarding specific segments of carbon & emissions tech, by the end of Q3 2022 both carbon
257
205
tech and built environment were within 3% of full year 2021 deal value, showing strong growth
considering 2021 market conditions across the VC space. Industry is slightly behind at 76% of
fiscal year (FY) 2021 figures and is on a similar pace to 2021. Land use has declined so far in 2022
and now sits at 38% of FY 2021 figures.
$1.2
$1.9
$3.2
$5.6
$13.6
$10.7
2017
2018
2019
2020
2021
2022*
Deal value ($B)
Deal count
Source: PitchBook | Geography: Global | *As of September 30, 2022
3: “Europe’s Largest Electric Vehicle Battery Recycling Plant Begins Operations,” Revolt, May 15, 2022.
Q3 2022 Carbon & Emissions Tech Report
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VC ACTIVITY
At the quarterly level:
Carbon & emissions tech VC deal activity by quarter
• Carbon tech has seen a significant fall from the previous quarter (in which Climeworks’ $634.41
million Series F financing was a significant component) while still representing the third-largest
quarter for total deal value in the last 24 months ($900.3 million across 67 deals).
• Industry had its second-highest quarter on record in terms of deal value and highest on record in
250
$6
$5
200
terms of deal count ($3.2 billion over 77 deals).
$4
• Built environment grew by 51% from Q2, but even with this growth was only the fifth-largest
quarter in the last 24 months ($474.4 million across 56 deals).
150
$3
• Land use has remained stable in terms of deal value in the last 12 months, currently at $273.9
million over 36 deals—well below the Q3 2021 peak of $928.7 million over 38 deals.
Median pre-money valuations in the carbon & emissions tech space have generally climbed in the
last five years across angel and seed stages, early-stage VC, and late-stage VC, with particularly
100
$2
50
$1
sharp increases in early-stage VC, jumping from $9.9 million in 2017 to $35.0 million in 2022—
growing by 254%. Median VC deal size has increased in the last three years for late- and earlystage deals while angel and seed stage deals decreased by a small amount (-7.5%) from 2021.
$0
0
Q1
Q2
Q3
2017
Q4
Q1
Q2
Q3
2018
Q4
Q1
Q2
Q3
Q4
2019
Deal value ($B)
Q1
Q2
Q3
2020
Q4
Q1
Q2
Q3
2021
Q4
Q1
Q2
Q3
2022*
Deal count
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
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VC ACTIVITY
Carbon & emissions tech VC exit activity
Carbon & emissions tech VC exit count by type
20
Buyout
20
Acquisition
8
3
$0.2
1
0
$0.0
$0.0
2017
2018
$0.4
2019
2020
Exit value ($B)
Public listing
11
$5.6
$1.7
2021
2022*
15
Exit count
Source: PitchBook | Geography: Global | *As of September 30, 2022
10
Carbon & emissions tech VC deal activity by segment (TTM)*
213
201
181
5
113
$2,352.1
$3,966.2
Built environment
Carbon tech
Deal value ($M)
$5,611.8
$1,139.0
Industry
Land use
Deal count
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
0
2017
2018
2019
2020
2021
2022*
Source: PitchBook | Geography: Global | *As of September 30, 2022
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 10
VC ACTIVITY
Median carbon & emissions tech VC deal value ($M) by stage
$12
Median carbon & emissions tech VC pre-money valuation ($M) by stage
$11.2
$60
$52.3
$10.0
$48.1
$50
$10
$8
$7.1
$5.8
$6
$40
$35.0
$30
$19.0
$20
$4
$2.0
$2
$1.9
$10
$6.5
$8.0
$0
$0
2017
2018
2019
Angel & seed
2020
Early-stage VC
2021
2022*
Late-stage VC
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
2017
2018
2019
Angel & seed
2020
Early-stage VC
2021
2022*
Late-stage VC
Source: PitchBook | Geography: Global | *As of September 30, 2022
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 11
VC ACTIVITY
Key carbon & emissions tech angel and seed VC deals*
Company name
Close date (2022)
Category
Stage
Deal size ($M)**
Post-money
valuation ($M)
Lead investor(s)
Valuation step-up
(post to pre)
SOLARBIO
September 1
Green mining
Seed
$17.0
N/A
N/A
N/A
Climate Club
September 28
Carbon
accounting/analytics
Series 1
$8.1
$35.1
Vestigo Ventures, XYZ Venture Capital
N/A
Carbon Ridge
September 12
Point source carbon capture
Seed
$6.0
N/A
Grantham Environmental Trust
N/A
aircela
July 26
Direct air capture
Seed
$5.5
$30.5
N/A
N/A
Future
September 21
Carbon fintech
and consumer
Seed
$5.3
N/A
Accomplice VC
N/A
BANQloop
July 15
Recycling - polymers
Seed
$5.0
$33.1
MaC Venture Capital
2.8x
Kodama Systems
September 21
Ecosystem health
and monitoring
Series 1
$5.0
$35.0
N/A
6.5x
Transaera
July 18
Heating/cooling
Seed
$5.0
$15.0
Energy Impact Partners
N/A
Carbon Counts
August 10
Ecosystem health
and monitoring
Seed
$4.5
N/A
Algorand, Algorand Foundation,
Borderless Capital
N/A
Replace
September 1
Recycling - polymers
Seed
$4.0
$16.2
N/A
N/A
Source: PitchBook | Geography: Global | *As of September 30, 2022
**Note: Excludes ties
Q3 2022 Carbon & Emissions Tech Report
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VC ACTIVITY
Key carbon & emissions tech early-stage VC deals*
Company name
Close date (2022)
Category
Stage
Deal size ($M)
Post-money
valuation ($M)
Lead investor(s)
Valuation step-up
(post to pre)
H2 Green Steel
August 29
Manufacturing and
chemicals, green mining
Series B
$192.5
N/A
AMF Pensionsförsäkring, GIC, Schaeffler
N/A
MAD Energy
September 15
Carbon fintech
and consumer
Early-stage VC
$98.3
N/A
N/A
N/A
Carbon Direct
August 24
Carbon fintech
and consumer
Series A
$60.8
N/A
Decarbonization Partners, Quantum
Energy Partners
N/A
Patch
September 13
Carbon
accounting/analytics
Series B
$55.0
N/A
Energize Ventures
N/A
Nexii
July 12
Green construction
Early-stage VC
$50.2
$1,582.3
Horizon Technology Finance, Trinity Capital
N/A
Sunrise New Energy
July 1
Manufacturing
and chemicals
Early-stage VC
$29.8
N/A
N/A
N/A
Pixxel
September 22
Climate/earth data
Series A2
$27.7
N/A
Radical Ventures
N/A
LongPath Technologies
September 21
Climate/earth data
Series A
$23.5
$78.5
N/A
N/A
Neolithe
July 17
Green construction
Early-stage VC
$20.0
N/A
N/A
N/A
EverestLabs
July 8
Recycling - analytics
Series A
$16.1
$56.1
TransLink Capital
1.7x
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
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VC ACTIVITY
Key carbon & emissions tech late-stage VC deals*
Company name
Close date (2022)
Category
Stage
Deal size ($M)
Post-money
valuation ($M)
Lead investor(s)
Valuation step-up
(post to pre)
Northvolt
July 5
Lithium battery recycling
Late-stage VC
$1,100.0
N/A
N/A
N/A
Vital Thin Film Materials
September 28
Manufacturing
and chemicals
Series B
$643.8
N/A
CICC Capital
N/A
Xpansiv
July 6
Carbon fintech
and consumer
Late-stage VC
$400.0
N/A
Blackstone
N/A
Ascend Elements
September 19
Lithium battery recycling
Series C
$300.0
$800.0
N/A
3.6x
Monolith
July 14
Manufacturing
and chemicals
Late-stage VC
$300.0
N/A
Decarbonization Partners, TPG
N/A
Sense
September 14
Building energy efficiency
Series C
$127.6
N/A
Blue Earth Capital
N/A
AMP Robotics
July 1
Recycling - analytics
Series C
$71.2
$571.2
N/A
1.9x
RTS
July 11
Recycling - analytics
Late-stage VC
$60.0
N/A
N/A
N/A
Bridger Photonics
September 1
Climate/earth data
Late-stage VC
$55.0
N/A
Carica Sustainable Investments, Madison
Valley Partners
N/A
Terra CO2
July 12
Green construction
Series A
$46.0
N/A
Breakthrough Energy Ventures, LENX
N/A
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
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VC ACTIVITY
Top VC investors in carbon & emissions tech companies since 2017*
Top VC-backed carbon & emissions tech companies by total VC raised to date*
Investor name
Deal count
Company name
VC raised to date
Segment
Category
SOSV
37
Northvolt
$5,510.1
Industry
Lithium
battery recycling
Prelude Ventures
27
Generate
$3,252.1
Carbon tech
Carbon fintech
and consumer
MCJ Collective
24
Enerkem
$893.9
Industry
Manufacturing
and chemicals
Climate Capital
22
Vital Thin Film Materials
$831.9
Industry
Manufacturing
and chemicals
Enterprise Ireland
21
Redwood Materials
$818.6
Industry
Lithium
battery recycling
Cycle Capital Management
19
Climeworks
$785.5
Carbon tech
Direct air capture
Keiretsu Forum
19
Crusoe Energy Systems
$708.1
Carbon tech
Carbon fintech
and consumer
Khosla Ventures
18
Veev
$647.0
Built environment
Green construction
Clean Energy Ventures
16
Monolith
$625.0
Industry
Manufacturing
and chemicals
OGCI Climate Investments
15
Pivot Bio
$616.7
Land use
Fertilizer alternatives
Source: PitchBook | Geography: Global | *As of September 30, 2022
Q3 2022 Carbon & Emissions Tech Report
Source: PitchBook | Geography: Global | *As of September 30, 2022
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 15
Emerging opportunities
AI-powered robotics
Carbon offset trading platforms
Energy-efficient carbon capture
AI-powered robotics allow more efficient
Trading platforms experience growth as
Standard carbon capture technologies have
recycling sorting.
interest in carbon offsets rises.
high energy consumption; reducing this is a
core focus.
AI-powered robotics
Producing new metals and plastics is an emissions-intensive process, and recycling has long been
Optical separation techniques are well established, and a growing number of companies are
a way to supplement raw material creation while obtaining value from waste streams. The variety
integrating artificial intelligence (AI) into their identification and sorting capabilities, allowing
of metals and plastics used to make consumer products presents a challenge, though.
more specific differentiation between material types. AMP Robotics is one such company, offering
a mixed recycling platform that continuously trains itself to recognize materials based on color,
When recycling polymer and metal waste, a core issue lies in identifying and separating items
texture, shape, size, patterns, and labels. Similarly, EverestLabs and Gongye Technologies provide
composed of different materials. Without this step, the product of the recycling process is an
AI-driven recycling technology with increased ability to distinguish materials for recycling. Such
impure material with properties that are not ideal for most applications. For example, attempting
AI-driven recycling platforms are commonly applied to municipal waste but can also be trained for
to recycle two different plastics together often ends up with a product that lacks the properties
other waste streams, such as construction waste.
that made the original plastics useful (though this approach is sometimes used to create low-cost
blocks of recycled material for construction purposes).4
For plastic waste in particular, AI-powered robotics offer a way to increase the quality of
mechanical recycling.6 An alternative is emerging in chemical or enzyme recycling—processes
The identification and sorting process has historically relied upon approaches such as the sink-float
through which plastics are broken down into smaller molecules that can then be used to make
method, which are effective in sorting certain plastics by whether they float or sink, but this method
recycled plastics almost identical to virgin-grade plastics. The high energy cost of chemical
has low flexibility—it is challenging to adapt it to different densities or to separate plastics of similar
recycling, which involves high temperatures to break down plastics, means that we will likely
density. Robotic identification and sorting provide more flexibility, allowing high-speed separation
see a combination of approaches in the future, depending on energy costs and demand for
of mixed waste streams through optical and mechanical identification of different waste types.
certain plastic types. 5
4: “Design from Recycling: A Complex Mixed Plastic Waste Case Study,” Resources, Conservation and Recycling, Kim Ragaert et al., April 2020.
5: Mechanical recycling of plastics involves shredding and melting plastic waste to form a granulate from which new products can be created without
significantly changing the chemical structure of the plastic.
6: “Life Cycle Environmental Impacts of Chemical Recycling Via Pyrolysis of Mixed Plastic Waste in Comparison with Mechanical Recycling and Energy
Recovery,” Science of the Total Environment, Harish Jeswani et al., May 15, 2021.
Q3 2022 Carbon & Emissions Tech Report
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Carbon offset trading platforms
Carbon offsets are seeing strong interest, allowing corporations and individuals to reduce their
forms of carbon offsets (consisting of multiple projects packaged into their own offerings),
reported carbon emissions, often at much lower costs than reducing direct emissions. These
renewable energy credits, and water. Somewhat similar is Carbonext, which offers its own carbon
offsets are often in the form of relatively small projects (protection or planting of certain forests,
offsets built from a curated collection of projects based around forest protection and monitoring
implementation of new renewable infrastructure, improvements to cooking fuel in developing
in Brazil. Carbonext also offers a pathway for landowners to generate income from their land by
nations, and more), so there is a wide landscape of projects to choose from. This landscape has
protecting ecosystems and using it as a carbon offset project (assuming certain conditions of size,
provided an opportunity for trading platforms that aggregate projects, provide an interface to
location, and deforestation history).
6
purchase offsets, and support those looking to convert physical assets into offsets to be sold.
Some of these platforms will also provide their own validation of carbon offsets, which has
The carbon offset ecosystem is somewhat exposed to regulatory risk; if policies and regulation
become more important as scrutiny of carbon offsets has increased.8
shift to require certain standards and monitoring of carbon offset projects, many projects may no
longer be considered valid, and the overall cost of offsets will increase. If this does occur, though,
Xpansiv (which raised $400.0 million in late-stage VC funding in Q3 this year) is one of the largest
large trading platforms that specialize in environmental assets such as carbon offsets are well
platforms in this area, operating as an exchange for environmental commodities, including various
placed to take on the role of overseeing quality.
7: For example, reducing energy usage, implementing carbon capture, or switching to low-carbon inputs.
8: “Carbon Credits Face Scrutiny as a Corporate Path to ‘Net Zero,’” Financial Times, Camilla Hodgson, September 19, 2022.
Q3 2022 Carbon & Emissions Tech Report
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Energy-efficient carbon capture
The core technologies for carbon removal are well established, having originated from oil and
replenishment results in immediate energy reduction and can be preferable to other approaches,
gas industry processes. They are effective at removing carbon dioxide from both exhaust gas
particularly where waste heat is readily available, as it is in many point-source emissions cases.
streams and the air but have high energy consumption. Essentially, they rely on chemistry that
Incorporating pH changes to trigger the release of captured carbon can be achieved by applying
absorbs carbon from a gas and then releases the captured carbon into storage under certain
electricity to affect pH levels, with lower power consumption and the ability to directly use
conditions. Conditions to “replenish” the chemistry conventionally requires high temperatures,
renewable electrical power. Electrochemical approaches are very recent, and startups developing
which increase energy requirements. These energy requirements are responsible for much of the
these approaches, such as Verdox, Missions Zero, and Travertine, have only been founded in the
costs of carbon capture technologies and therefore significantly influence the economic viability of
last few years.
such technology. Recent technological development has focused on improving energy efficiency
through modified chemistries and novel approaches.
As startups attempt to drive down the cost of carbon capture, shifts in policy are simultaneously
driving up the incentives for operating carbon capture facilities. The IRA in the US was signed
The developments to new chemical approaches cover two areas: those that reduce the
on August 16, 2022, and provides substantially increased support for carbon capture projects,
temperatures required to replenish the chemistry and those that use conditions other than
increasing the dollars per ton that the available tax credits are worth from $50 to $85 for point-
temperature for replenishment, such as pressure or acidity/alkalinity (known as electrochemical
source carbon capture and storage, and from $50 to $180 per ton for direct air capture.
or pH-swing replenishment). Reducing temperatures required for temperature-swing
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Select company highlights
SELECT COMPANY HIGHLIGHTS
Founded
2012
Total raised:
$625.0M over seven deals
200 employees
First institutional round:
$10.0M Series A
Last financing:
$300.0M of late-stage
venture funding
Post-money valuation:
Undisclosed
Overview
Leadership
Monolith uses methane pyrolysis to produce chemicals and fuels. This process heats natural
• Co-founder and CEO: Rob Hanson
gas (methane) using an energy source (Monolith uses renewable energy) in a low-oxygen
• Chief Technology Officer: Tom Maier
environment to produce hydrogen gas and solid carbon—known as carbon black. The hydrogen
• Chief Commercial & Supply Chain Officer: Christopher Cornille
can be used or sold as a fuel, while the carbon black is used to make a range of products: rubber
• Chief Information Security Officer: Matt Harper
goods, plastics, batteries, inks, and coatings, and is also used in agricultural settings. Conventional
• Chief Financial Officer: Tim Rens
processes to make hydrogen from methane produce carbon monoxide and dioxide, which are
• Chief People Officer: Emily Olinger
more challenging to store or use than solid carbon.
Monolith is currently expanding its facility to allow production of ammonia, using the hydrogen
produced via pyrolysis. The $300.0 million of late-stage funding raised in Q3 will be used to continue
development of production capabilities, including hydrogen, carbon, and ammonia production.
Q3 2022 Carbon & Emissions Tech Report
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SELECT COMPANY HIGHLIGHTS
Competing technologies
The production of carbon black is traditionally carried out using heavy oils as a feedstock and
Monolith produces two core products (hydrogen and carbon black), with ammonia production in
considering emissions and is considered less clean than pyrolysis. Companies that use carbon
development. These products compete in different spaces: Hydrogen production can be achieved
black as a feedstock may prefer to purchase carbon black produced through pyrolysis with
through several pathways, including the most common approach of steam methane reforming
renewable energy for the sustainability benefits that this brings.
heated using natural gas or oil to form solid carbon particles. This process was developed without
(SMR), which uses the reaction between methane and high temperature steam to produce
hydrogen, carbon monoxide, and carbon dioxide. SMR is a viable alternative to pyrolysis but is less
energy efficient if carbon capture is factored in.9
9: “Methane Pyrolysis for CO2-Free H2 Production: A Green Process to Overcome Renewable Energies Unsteadiness,” Chemie Ingenieur Technik, Nuria
Sánchez-Bastardo et al., August 25, 2020.
Financing history
Early-stage VC
Early-stage VC
Early-stage VC
Early-stage VC
Series C1
Series C
Series D
April 10, 2013
June 3, 2014
July 6, 2014
February 2, 2018
August 18, 2020
June 3, 2021
July 14, 2022
Total raised:
$10.0M
Total raised:
$9.0M
Total raised:
$12.0M
Total raised:
$114.0M
Total raised:
$60.0M
Total raised:
$120.0M
Total raised:
$300.0M
Post-money valuation:
$15.0M
Post-money valuation:
$24.0M
Post-money valuation:
$36.0M
Post-money valuation:
$150.0M
Post-money valuation:
N/A
Post-money valuation:
N/A
Post-money valuation:
N/A
Investors:
First Green Partners, Azimuth
Energy Partners
Lead investors:
Undisclosed
Lead investors:
Undisclosed
Investors:
Cornell Capital,
Warburg Pincus
Lead investors:
Azimuth Energy Partners,
Cornell Capital, Imperative
Ventures, Kiewit, Mitsubishi
Heavy Industries
Investors:
Azimuth Energy Partners,
Cornell Capital, NextEra
Energy, Perry Creek
Capital, SK Group
Lead investors:
Decarbonization
Partners, TPG
Q3 2022 Carbon & Emissions Tech Report
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 22
SELECT COMPANY HIGHLIGHTS
Founded
2020
Total raised:
$297.5M over two deals
93 employees
First institutional round:
$105.0M Series A
Last financing:
$192.5M in a Series B
Overview
Leadership
Interest in green steel is high, as efforts towards decarbonization expand the scope of emissions
• CEO: Henrik Henriksson
reduction beyond the historically most significant areas (including power generation and transport).
• CFO: Otto Gernandt
H2 Green Steel decarbonizes steel production using electrolysis to produce hydrogen, which is
• Chief Strategy Officer: Jonas Lundin
then used to create direct-reduced iron, which produces iron from iron ore with substantially lower
• Chief Technology Officer: Maria Gulda
carbon emissions. The company uses renewable electrical power to convert this iron to steel and to
• Chief People Officer: Sofia Gellar
power the casting, rolling, and finishing processes.
• CCO: Mark Bula
Post-money valuation:
Undisclosed
H2 Green Steel recently announced the first close of its Series B funding of $192.5 million (€190.0
million), which will be used to develop large-scale green steel production in Northern Sweden.
Outside of steel production, the company also recently signed an agreement with green hydrogen
producer Hydro Havrand to explore large-scale green hydrogen projects.
Q3 2022 Carbon & Emissions Tech Report
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 23
SELECT COMPANY HIGHLIGHTS
Competing technologies
Green steel competes directly with conventionally produced steel, but there are alternative
processes currently in use to produce decarbonized steel. One such process employs conventional
steelmaking processes but replaces fossil fuels with biofuel alternatives, as in the case of the
torrefaction-produced9 biocoal that Perpetual Next produces, which has recently been chosen by
steel producer ArcelorMittal Ghent to partially replace coal in its steelmaking blast furnaces.
9: Torrefaction involves heating biomass in the absence of oxygen, between 200-300°C, to produce a coal alternative.
Financing history
Series A
Early-stage VC
April 26, 2021
August 29, 2022
Total raised:
$105.0M
Total raised:
$192.5M
Post-money valuation:
Undisclosed
Post-money valuation:
Undisclosed
Investors:
N/A
Lead investors:
MF Pensionsförsäkring,
GIC, Schaeffler
Q3 2022 Carbon & Emissions Tech Report
CONFIDENTIAL. NOT FOR REDISTRIBUTION. PG 24
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