Fossil fuel giants posting record losses and pivoting to clean energy. Elon Musk looking to scale carbon removal solutions to combat climate change. Several new impact-driven venture capital funds launching across Europe. These were the three cleantech news topics that caught our eye in February. In this blog post, we breakdown why cleantech businesses should be following these topics closely – especially those with investment plans in mind.
Cleantech news 1: The shifting energy market
What’s happened?
Businesses in the fossil fuel industry know that they must plan for net-zero and rethink their business models to survive the energy transition. The ongoing coronavirus pandemic has meant that decisions need to be made even quicker than anticipated, with the collapse in oil and gas demand having a devastating impact on major fossil fuel companies. Shell, BP and ExxonMobil have all recently declared enormous losses for 2020.
Shell posted a net loss of US$21.7bn last year, while it had already announced that up to 9000 jobs would be lost globally as it responds to the effects of the pandemic. BP reported underlying losses of US$5.7bn compared to pre-tax profits of £6bn the previous year, while ExxonMobil posted a historic annual loss of US$22.4bn during “the most challenging market conditions it has ever experienced.”
Why should cleantech companies be paying attention?
There has been a significant shift in how major European oil and gas players are approaching the energy transition. Companies such as Total and BP have both entered the renewables market in a big way by purchasing billions of dollars’ worth of assets, such as wind farms, in the last year.
There have been two big announcements this month alone, showing the pace at which the energy transition is picking up. ExxonMobil launched ExxonMobil Low Carbon Solutions, a new business geared at carbon capture and storage and other low carbon technologies. The company has pledged to invest US$3bn into low-emission energy projects over the next five years, saying that it already has plans for over 20 projects worldwide. Meanwhile, Shell announced the acquisition of Next Kraftwerke to strengthen its position in renewable energy trading.
Despite the increased interest in emission-reducing or eliminating technologies from oil and gas businesses, it is important to remember that the cleantech sector is more crowded than ever. That’s why cleantech companies planning their next funding round or looking to secure an exit must ensure they are clearly communicating their value propositions and benefits of their technology, so they can catch the investors’ attention.
Cleantech news 2: The largest incentive prize in history is climate-focused
What’s happened?
One of the world’s wealthiest people has teamed up with the world leader in designing and launching incentive competitions. SpaceX Founder and Tesla CEO Elon Musk has sponsored XPRIZE’s US$100M XPRIZE Carbon Removal competition, the largest incentive prize in history.
Taking place over four years, XPRIZE Carbon Removal aims to attract and inspire innovators to develop and scale carbon removal solutions to combat climate change. To win the competition, teams must demonstrate a scale model of their solution at a carbon removal level of 1 ton of CO2 per day. They must also validate that their solution can be economically-scaled to gigaton levels.
Why should cleantech companies be paying attention?
The launch of XPRIZE Carbon Removal is another example of the growing interest in carbon capture technologies as the world aims to reach net-zero by 2050. As well as receiving increased attention from high-profile figures such as Elon Musk, carbon capture is also gaining significance from investors and policymakers. This has led to more and more start-ups entering the carbon capture space from a variety of industries.
With competition fiercer than ever in the carbon capture sector, those involved need to prove their technology’s immediate market potential and long-term scalability to investors. Clearly communicating your commercial roadmap is of paramount importance, as is having a visually attractive investor deck with compelling copy.
Cleantech news 3: Interest in cleantech investment continues to grow
What’s happened?
The first two months of the year have seen several new impact-driven venture capital firms enter the market. Hollywood star Robert Downey Jr released his ESG-focused fund FootPrint Coalition Ventures instead of a new movie in January, while three more sustainability-focused funds launched in February alone.
French investment firm Founders Future, is particularly interested in European start-ups from the vertical farming, circular economy, mobility and alternative packaging sectors. Revent, a new European early-stage venture capital fund with an impact focus, announced its arrival with a US $60 million fund, while 2150 launched with nearly US$160 million in the bank to fund start-ups operating in the construction and urban planning industries.
Why should cleantech companies be paying attention?
The world of venture capital is changing. Commercial return will always be an essential driver for investors, however environmental and societal benefits are growing in significance. Similarly, the new generation of cleantech start-up founders is looking for investors who share their financial and impactful interests.
To attract the attention of these new sustainability-focused venture capital funds, cleantech start-ups need to make sure that their vision is communicated loudly and proudly. It should be front and centre on your website so that the first thing any visitor –whether investor, journalist or customer – sees is your purpose. Senior leaders should also be fully aware of their company’s key visionary messages, which should be mentioned during media interviews or when presenting at industry events.
Do you need help securing your next fundraising round or guidance as you seek an exit? We deliver investor communications campaigns that lead to global recognition and build brands that catch the major investors’ attention. Get in touch with our team for an introductory chat!
