When Josh Silverman started shopping around the idea for his methane-eating microbe startup, Windfall Bio, eight years ago, the market just wasn’t ready. No one cared about methane, he said. Instead, companies focused on reducing carbon emissions. But a few years later, the market is starting to come around.
Menlo Park-based Windfall Bio has raised a $28 million Series A round to expand its commercialization efforts. The round was led by Prelude Ventures with participation from Amazon’s Climate Pledge Fund, Incite Ventures and Positive Ventures, among others, as well as existing investors including Mayfield.
Windfall works with industries that produce large levels of methane, such as agriculture, oil and gas, and landfills. The startup supplies methane-eating microbes that absorb methane emissions, turning them into fertilizer. Companies can either use the fertilizer themselves if they are in the agriculture sector, or they can sell it as a revenue stream.
“We think there’s a big opportunity to leverage this natural ecosystem that gives us a low-cost solution without needing huge capital investments like we see for these other carbon capture technologies,” Silverman said.
While it took a few years for investors and companies to really get on board, Silverman said that since Windfall raised its seed round last year and came out of stealth in March 2023, demand has been high.
“We had a massive influx from all continents and all verticals. huge amounts of excitement,” Silverman said. “It’s a win-win for everyone, regardless of industry. Everyone wants to reduce their carbon footprint and they want to do it in a way that makes money and there aren’t many solutions.”
Silverman says carbon sequestration has been the only focus for so long because once carbon is in the atmosphere, it lasts forever, compared to methane’s 10- to 12-year lifespan. A few decades ago, when people were thinking about climate change, they were looking for longer-term solutions. But now that the effects of climate change are both clearer and worse, people are waking up to the need for short-term and long-term solutions.
“We’ve missed literally every climate goal we’ve set,” Silverman said. No G20 country has the necessary policies to reach it Paris Agreement emission reduction targets, for example. “If all you do is look out into the future and don’t do it every day, you miss those goals and you miss what’s right in front of you. We have to manage the short-term climate drivers, otherwise we won’t be around to deal with the long-term.”
The lack of attention to methane is also surprising because methane can actually generate a better return on investment for companies from their carbon reduction efforts.
Coal is waste, which means that when companies capture it, they do so largely just to get rid of it, as opposed to turning it into something else. By comparison, methane is energy, which means it can be captured and reused much more easily than coal. Essentially, companies can reduce carbon for potential cost savings or a highly legal carbon credit, while focusing on methane can actually make them money if they work with a company like Windfall.
This deal also stood out to me because Windfall is among a growing class of startups focused on mitigating today’s climate issues, not just those down the road. While it is good for companies to focus on mitigating the long-term effects of climate change or trying to prevent future climate-driven events, we need solutions now.
It reminded me of Convective Capital, a venture fund I’ve written about before that’s dedicated to fire technology. It is not dedicated to the technology that helps prevent them, but rather to the technology that helps society adapt to the effects of the increasing wildfires now. Company founder Bill Clerico told TechCrunch in 2022 that while it’s great to create long-term solutions, they mean nothing if your home is at risk of fires this summer.
Silverman said the market is still in the early stages of figuring out the potential benefits of investing in methane reduction technology. But progress is good, and while he may be biased, Silverman is happy to see funding going to a climate company that isn’t another carbon credit startup. I agree with him there.
“It’s been a long road to get here, many years of zero traction,” Silverman said. “Now that the traction is there and there aren’t many people working in this area, there aren’t as many competitors. We are the best of very few choices. As I have said, “in my country of the blind, the one-eyed man is king.”
