4 Energy Tech Big Ideas and Startups Exploiting Them

We explore some of those benefits and opportunities in next-gen energy tech — through the eyes of a venture capitalist.

Deep tech pursues the hardest, most revolutionary technology. These developments can provide tremendous social benefits and also be highly lucrative. A prime example of deep tech is quantum computing — both for its level of difficulty and promise.

As the world thirsts for more energy, while recognizing the need to address climate change, startups innovating at the forefront of the energy transformation offer potentially lucrative investment opportunities. These startups are redefining our energy generation, storage, and electrification approach from advanced battery tech to novel carbon capture methods.

In this blog, we’ll explore some of those benefits and opportunities in next-gen energy tech — through the eyes of a venture capitalist. Our focus: Four powerful investment spaces, plus trailblazing ventures from the Alumni Ventures’ portfolio that bring the opportunity to life.

If you want to learn more, sign up for our free webinar, where we will interview top experts in the world of energy and investing.

4 Big Ideas in Energy Investing

Wednesday, February 21, 2:00 PM ET / 11:00 AM PT

Join our VCs to explore the benefits and opportunities in next-gen energy tech through the eyes of a venture capitalist. Register Here »

ENERGY SNAPSHOT

Given the world’s appetite for energy, there’s understandable concern about energy consumption and fossil fuels. The International Energy Agency (IEA) estimates that $2.8 trillion will be invested in energy in 2023.

The surprising fact is that out of that total, more than $1.7 trillion is going to clean energy. In other words, for every $1 spent on fossil fuels, $1.7 is now spent on clean energy. Startups innovating at the forefront of the energy transformation offer potentially lucrative investment opportunities. From advanced battery technologies to novel carbon capture methods, these startups are redefining our approach to energy generation, storage, electrification and more.

VENTURE INVESTING OPPORTUNITIES IN ENERGY: FOUR INVESTMENT SPACES

1. Carbon Capture and Direct Air Capture Solutions

Carbon capture and direct air capture are processes where CO2 is captured. With direct air capture, the CO2 is extracted directly from the atmosphere at any spot — even if it was released many years ago. Carbon capture is usually done at the point of emission, such as a factory or power station. In both cases, the trapped CO2 is then treated, transported, and stored underground or used for industrial purposes.

This investment opportunity focuses on technologies that capture CO2 efficiently plus offer other disruptive benefits like these:

• Can deliver the lowest possible cost and at a massive scale
• Show promise outside academic settings. We seek to back entrepreneurs with deep real-world engineering expertise and experience in scaling up technologies for widespread industrial use.
• In the case of carbon capture, can seamlessly integrate into industrial and energy infrastructure, reducing the need for major new investments or overhauls. This also speeds up deployment and enables more industries to adopt carbon capture solutions.

AV PortCo: AirMyne was founded by two veteran engineers from Honeywell and BASF. The company is taking a pragmatic approach to capturing CO2. The team is using an engineering mentality to rapidly improve its system, which is designed to be compatible with existing supply chains and infrastructure partners.

2. Fast-Charging Infrastructure

The global transition to electric vehicles (EVs) requires a revolution in charging infrastructure, particularly when it comes to fast-charging solutions. The growing EV market is set to dramatically increase demand for charging stations that can provide quick, efficient power-ups, similar to the convenience traditional fuel stations offer.

Companies innovating in this space can offer a compelling investment opportunity. What we look for in terms of investable solutions:

• Can be rapidly and widely deployed
• Offer high-speed charging
• Compatible with a wide range of EV models

AV PortCo: FreeWire Technologies is at the forefront of mobile energy storage and rapid-charging technology. Their portable, battery-powered charging stations are a game-changer for electric vehicles, offering fast, convenient charging solutions that can be deployed anywhere. FreeWire’s innovative solution addresses many of the infrastructure challenges facing the EV market. FreeWire raised $125M last year and aims to deploy over 5,000 ultrafast chargers by 2025.

3. Local Power Generation

The need for local power generation systems grows as reliance on renewable energy sources like solar and wind increases. These systems can supply power during gap periods when solar and wind are intermittent or not viable, increasing overall energy resilience.

The ideal investment focuses on technologies that offer these advantages:.

• Offer stability and power continuity in the event of grid outage
• Efficient
• Flexible, capable of using multiple fuel sources — including renewables

AV PortCo: Mainspring offers innovative linear generator technology, enabling them to provide cleaner, more efficient, and more flexible power. Their system’s ability to operate on a variety of fuels, including renewable biogas and hydrogen, makes it an adaptable and reliable local power source. Moreover, Its capacity to provide power independently of the grid is a significant advantage, particularly in scenarios where grid reliability is compromised. Recently, Mainspring entered into a $150 million agreement with NextEra Energy Resources to buy and deploy these generators, highlighting the interest in this innovative technology.

4. Capex-Light Advancements in Battery Efficiency

An interesting investment opportunity in the battery technology sector lies in capex-light solutions that offer substantial improvements in battery efficiency. This approach is particularly crucial in the transition from traditional graphite anodes to more advanced materials like lithium metal.

As investors, here’s what we look for in this space:

• Meaningful advancement in battery efficiency — holds more energy, charges up faster
• Capex-light solutions that are compatible with and easily adopted by battery manufacturing infrastructures without investments in equipment or processes
• Reduction in battery degradation and failure

AV PortCo: Sepion Technologies’ approach in replacing graphite anodes with lithium metal is a prime example of a capex-light solution. Using the latest developments in nanoscience, polymer chemistry, and cell engineering, Sepion can produce a 40% increase in EV range. Importantly, the company’s solution seamlessly integrates into the existing infrastructure of gigafactories (where electrification components and products are made), requiring little extra cap-ex. The company recently opened one of North America’s largest separator coating facilities for lithium-metal batteries, spanning 25,000 square feet and powered entirely by renewable energy.

TRANSFORMING THE ENERGY SECTOR

Interested in learning more about companies revolutionizing the energy sector and their transformational potential? Join us for a webinar to discuss the landscape, our investment thesis, and how we identify startups with the potential to disrupt industries.

Sign up now to secure your front-row seat to the future!

About the Author

Matt Caspari is Managing Partner of Strawberry Creek Ventures (for the UC Berkeley community) and AV’s Deep Tech Fund. Matt is a two-time venture-backed founder/CEO with a decade of startup operating experience. Before joining Strawberry Creek Ventures, he was an Investing Partner at Spike Ventures (for the Stanford community). Matt holds an MBA with a Certificate in Entrepreneurship from UC Berkeley’s Haas School of Business and a BS in Biochemistry from Georgetown University.

About Alumni Ventures

Alumni Ventures offers accredited individuals access to professional-grade venture capital, a key asset class missing from the portfolios of many sophisticated investors. Since 2014, AV has raised more than $1.2 billion across 40+ Alumni and Focused Funds, serving a growing network of 9,500+ investors and 600,000+ community members. AV evaluates hundreds of investment opportunities every year and has backed 1,200+ unique portfolio companies. Alumni Ventures is the #1 most active venture firm in the U.S., and #3 most active in the world, according to PitchBook’s 2022 rankings. AV funds are private, for-profit, and not affiliated with or sanctioned by any school. For more information, visit av.vc.