Let’s say you’re a founder who started a company based on a breakthrough technology that can make hydrogen cheaper and faster than anyone else — so much faster and cheaper that you made it through the first rounds of fundraising, bringing in tens of millions of dollars to prove that operates. And it does, even better than expected.
Now all you have to do is build a commercial-scale factory, a first-of-its-kind facility. Some call it the “commercial valley of death,” and it’s where many climate tech startups struggle. Because no one has undertaken such a project before, mainstream funders tend to be hesitant. there are too many unknowns.
Climate non-profit Prime Minister Coalition hopes to bridge the valley with a new program, Lattice climate.
The Prime Coalition has long taken a different approach to climate finance than its for-profit brethren. He makes the usual venture-style investments in startups through Azolla Ventures and also helps philanthropists direct their money to climate-related projects that he sees as high impact. Trellis Climate follows the latter model with an emphasis on the middle stages, where capital is scarce.
“There are more and more philanthropists who really care about solving the climate problem,” Lara Pierpoint, director of Trellis Climate, told TechCrunch.
“The highest, best use of philanthropy is to try new ideas, to really swing for the fences on things that have very high potential for impact,” he added. “It’s the most flexible and potentially risky set of dollars out there.”
For climate tech founders, this kind of funding is probably welcome news. Early-stage founders have a wide range of funds to tap into, from numerous venture capital funds to federal grants. It may not be enough to keep the planet from warming more than 1.5°C, but so far it’s been enough to prime the pump and keep climate tech investors busy.
There was an assumption that once climate technologies were proven, “then companies and industry would scale up those technologies,” Pierpoint said. “On the corporate side, a lot of companies are really pushed to do the things that create immediate shareholder value.” As a result, there is a widening gap in the middle.
“We strongly believe that philanthropy is the catalyst, but that the goal is to attract infrastructure investors who are willing to lean a little bit in front of the risk,” he said.
The program’s first investments include Ample Carbon, a startup converting old coal plants to bioenergy with carbon capture and storage, and Ebb Carbon, a sea-based carbon removal startup.
