Venture Capital Investments in the Advanced Materials and Alternative Energy Markets
I once was in a conversation with colleague, discussing the topic of what makes a successful investment in the chemical industry. His response? “You follow the money.” At Match Point Strategies, we do exactly that, engaging with and tracking the financing of young start-ups in the advanced materials and alternative energy segments. What we’ve found is commonality and, in some cases, intersection when it comes to where venture capital firms are placing their investment bets.
In Menlo Park, CA, Khosla Ventures tackles large problems that are amenable to technology solutions. The company seeks out unfair advantages, whether it’s proprietary and protected technological advances, business model innovations, unique partnerships, or top-notch teams. A review of Khosla Ventures’ portfolio shows support for several notable companies, mostly intriguingly Velo3D, an additives manufacturing upstart, and Lanzatech, with its gas-to-liquid bioprocessing technology platform. Lanzatech claims to offer an economically robust route to carbon capture and re-use, enabling the monetization of local gas sources with minimal capital investment. In Lanzatech’s market sector, carbon capture and “re-purposing” is an area attracting significant attention and high profile investment. MPS even spotted Lanzatech on CNN’s business coverage during a recent airport wait!
North of the border, Pangea Ventures in Vancouver, Canada, focuses on four advanced materials platforms with “impact focus”. Interesting investments include ESS, with its iron-based flow batteries, and Carbon Cure Technologies. At Carbon Cure, their value proposition lies in providing “bolt-on” technology to ready-mix and concrete producers by introducing waste carbon dioxide into fresh concrete, reducing emissions by up to 7%.
Interestingly enough, the Bill Gates-backed, high profile investor group of Breakthrough Energy Ventures has also made Carbon Cure one of a number of start-ups worthy of early stage financing. Breakthrough links cutting-edge, government-funded research to patient, risk-tolerant capital so that more clean energy innovations get to market faster. Other investments by Breakthrough include Form Energy and Quantumscape, two exciting companies showing clean energy promise. With board membership drawing from the likes of DMSE MIT, Tesla, and A123, the technical pedigree of Form Energy speaks for itself. Additionally, the company is “energetically” working to establish a rechargeable battery platform based on sulfur. With a significantly lower cost base than lithium and the ability to store energy over longer durations, we can see Form Energy providing a much needed value proposition for wind and solar energy storage. Quantumscape, another major Breakthrough investment, focuses on “solid-state batteries that work”, adding further fuel to achieving lasting clean energy solutions.