Let's say you're the founder of a company based on a breakthrough technology that allows you to create hydrogen cheaper and faster than anyone else. Let's say you were able to make hydrogen much faster and cheaper, so you made it through your first few funding rounds and raised tens of millions of dollars. You have to pay dollars to prove it works. And it was even better than I expected.
All that remains is to build a commercial-scale plant, the so-called first facility. Some call this the “valley of commercial death,” and it's where many climate tech startups struggle. No one has worked on such a project before, so regular investors tend to balk. There are too many unknowns.
Climate change nonprofit Prime Coalition hopes to bridge this valley with a new program called Trellis Climate.
The Prime Coalition has long had a different stance on climate finance compared to its for-profit brethren. The company makes regular venture-style investments in startups through its Prime Impact Fund, and also helps philanthropists direct their funds to climate-related projects that the company believes will have a big impact. ing. Trellis Climate follows the latter model, focusing on intermediate steps where funding is scarce.
“More and more philanthropists are seriously interested in solving the climate problem,” Trellis Climate Director Lara Pierpoint told TechCrunch.
“The highest and best use of philanthropy is to try new ideas, to really try things that can have a huge impact,” she added. “This is the most flexible and potentially risk-forward dollar set out there.”
For the founders of climate change technology, this kind of funding is likely welcome news. A wide range of funding is available to early-stage founders, from numerous venture capital funds to federal grants. It may not be enough to prevent global warming by more than 1.5 degrees Celsius, but so far it's been enough to keep the pump pumping and climate tech investors busy.
Pierpoint said there was an assumption that once climate change technologies were proven, “companies and industry would then scale them up.” “On the corporate side, many companies are under pressure to create immediate shareholder value.” As a result, the gap in the middle is widening.
“We strongly believe that philanthropy is the catalyst, but the goal is to bring in infrastructure investors who are a little bit more risk-positive,” she said.
The program's first investments include Ample Carbon, a startup that converts old coal-fired power plants into bioenergy through carbon capture and storage, and Ebb Carbon, an ocean-based carbon removal startup.