Funding Friday: Public Markets > Private Investment

Uncertainty may have dried up venture funding for early stage climate, but that doesn’t mean there aren’t still deals getting done — or past commitments now coming to light as funding rounds close. This week, for example, brings early-stage backing for a European startup working to convert wasted kinetic energy from braking vehicles into power at ports, as well as a software company helping utilities visualize and manage the increasingly complex electrical grid. Meanwhile, nuclear company Deep Fission proved that the private markets aren’t the only game in town — after going public via SPAC, it’s now planning to list its shares on the Nasdaq stock exchange.

There’s also some promising news for companies looking to scale up, with thermal battery company Antora turning on its first commercial plant in South Dakota this week. That project was made possible in large part by backing from one Australian billionaire. But there’s also S2G Investments, which last week closed a $1 billion fund focused on growth-stage companies and will perhaps help more climate technologies reach that critical commercial milestone.

REPS Nets $23.6 Million to Turn Roads Into Mini Power Plants

Every day, hundreds of millions of vehicles travel the world’s roads, converting fuel into motion and exerting mechanical force on the roads’ surface. Much of that kinetic energy is shed as heat when a vehicle throws on the brakes to navigate curves, intersections, ramps, and traffic signals. Austria-based startup REPS plans to capture some of that wasted energy, raising $23.6 million to “turn roads into power plants” by embedding hydraulic plates into road surfaces in braking zones, converting a vehicle’s momentum into clean electricity.

The mechanism is straightforward: As cars and trucks drive over the plates, they compress hydraulic cylinders built into the system, generating pressure that drives an onsite generator. The resulting electricity is routed to on-site battery storage systems, where it’s put to use powering on-site operations or feeding directly back into the local grid, turning high-traffic roads, ports, industrial sites, and other logistics hubs into their own small power sources. The company claims that capturing the energy lost through traffic could account for about 5% of global electricity demand, at least in theory.

REPS isn’t the first to attempt this form of so-called "energy harvesting,” but it says past efforts have failed due to the inferior efficiency and durability of existing mechanical energy converters. The company says its proprietary system, however, can operate for over 20 years. It’s already got one commercial system up and running in the Port of Hamburg, and says that if it were to install hundreds of such systems around the port, costs could be recovered in under four years. Now the startup is engaging with ports around the world and looking to build installations in other logistics hubs and cities.

Deep Fission Bets Public Markets Will Back Underground Reactors

At the end of last year, I identified Deep Fission, a startup looking to build small nuclear reactors inside underground, water-filled boreholes, as one of the wackiest recent bets in climate tech. Now the company has announced plans to go public at a target valuation of roughly $1.7 billion, seeking to raise $156 million in the process. Its thesis is that placing car-sized, 15-megawatt reactors about a mile underground could dramatically reduce both costs and safety risks. The surrounding rock would effectively serve as a natural barrier and containment vessel, negating the need for many of the bulky structures typically required to house reactors and prevent radioactive leaks.

The planned Nasdaq listing comes less than a year after the company’s somewhat unusual SPAC merger, which listed Deep Fission on the lesser-known and lightly traded OTCQB stock exchange and netted just $30 million. According to an SEC filing, the stock never actually traded, and at the time of the offering, it read as a quick attempt to secure cash. The startup had been attempting to raise a $15 million seed round earlier in the year that never panned out, and to date has raised only a modest $4 million in venture funding.

Deep Fission’s fortunes might be shifting, however, given that it’s transferring its listing to a major national exchange. The company’s public markets strategy does appear to be working as of late — In February, the startup raised $80 million by selling over 5 million restricted shares directly to investors. Whether this will all be enough to achieve its goal of beginning commercial operations in 2027 or 2028 remains to be seen, however. As a part of the Department of Energy’s Reactor Pilot Program, Deep Fission initially aimed to reach criticality — the point at which a nuclear chain reaction becomes self-sustaining — by this July, a target that now looks highly unlikely.

Texture Lands $12.5 Million to Build an Operating System for the Grid

As utilities scramble to keep pace with surging electricity demand, expanding grid-scale renewables, increasingly extreme weather while also coordinating new, distributed resources coming online, modern grid management is getting too complex for traditional software to keep up. Texture, the startup billing itself “the operating system for the energy grid,” wants to simplify the ecosystem by giving utilities, virtual power plant operators, and grid service companies a unified view of every device and associated data sources across their network — and it just raised a $12.5 million Series A to scale this solution further.

Texture’s software aggregates data from various sources — everything from smart meters to battery storage systems, electric vehicles, and smart thermostats — and consolidates it into a single layer for grid operators, flagging problems such as voltage irregularities or outage risks in real time. The platform sits atop an operator’s legacy software infrastructure, thus avoiding the need for utilities to overhaul their existing systems or implement customized and expensive enterprise solutions that require dedicated engineering teams to maintain.

The tech has gained traction among utility cooperatives — customer-owned nonprofits that often serve rural communities and maintain smaller staffs and tighter budgets than investor-owned utilities. With this latest raise, the startup is looking to access greater scale in the co-op market through a partnership with the National Rural Telecommunications Cooperative, a network of 850 utility cooperatives across the country which will now gain access to some of Texture’s software. As Texture’s CEO Sanjiv Sanghavi said about its co-op customers in the company’s press release, "They wanted to run modern grid programs but didn't have software built for their scale or budget. A co-op serving 15,000 members shouldn't have to build custom technology to launch a battery program or manage transformer load. We built Texture so they don't have to."

S2G Investments Raises $1 Billion to Fill Climate Tech’s Missing Middle

I was off last week, which means I missed the chance to bring you a piece of news that I’m particularly excited about: The sustainability-focused firm S2G Investments closed a $1 billion fund in what managing partner Aaron Rudberg described in a post on the firm’s website as “one of the most difficult fundraising environments in over a decade.” What’s more, this fund is specifically designed to help growth-stage companies bridge the persistent capital gap that emerges for climate tech companies after early-stage venture rounds but before institutional investors deem them bankable. This void often prevents startups from building first-of-a-kind facilities or deploying their solutions broadly enough to prove out their tech and drive down costs.

This fund is also a milestone for S2G itself, marking the firm’s first close after spinning off two years ago from Builder’s Vision, a family office managing investments for Walmart heir Lukas Walton. According to Rudberg, the fund is writing checks in the $25 million to $100 million range, and has already invested $300 million across 10 companies, largely in food and agriculture, energy, and ocean systems. The various recipients include the agricultural input startup Exacto, maritime battery supplier Echandia, and the industrial power optimization company ANA, Inc.

So-called missing middle financing is difficult precisely because it often involves technologies that, at least initially, carry a green premium or depend on policy support. But S2G is adamant that there are plenty of competitive startups, even in a political environment where climate policy is on the outs and affordability is a top concern.

“We believe some of the most attractive investment opportunities are in growth-stage businesses that deliver economic superiority through improved efficiency, margins, and resilience in industries fundamental to the global economy,” Rudberg wrote, as companies with unfavorable economics are being weeded out. “What remains are businesses with genuine commercial advantage, and those are the companies this Fund is built to back.”

Bonus: Antora Turns On Colossal 5 Gigawatt-Hour Thermal Battery in South Dakota

Over two years ago, I wrote about how super hot rocks — that is, thermal batteries — were one of the coolest things in climate tech. Since then, the companies I profiled, Rondo Energy and Antora Energy, have both brought their first commercial plants online, with the latter announcing that milestone this week. On Tuesday, as we covered in Heatmap AM, Antora turned on its 5 gigawatt-hour project in South Dakota, which stores excess wind power as heat for a bioethanol plant operated by POET, the world’s largest biofuel producer. Once the facility ramps to full capacity later this year, it will rank among the world’s largest energy storage projects, relying on over 200 of Antora’s thermal batteries.

For this project, Antora’s tech works by absorbing surplus wind power that would otherwise go to waste in windy South Dakota, where generation often outpaces what the region’s congested transmission lines can handle. The startup converts that renewable electricity to heat using resistive heating, essentially the same technology as a toaster. That’s then stored in insulated carbon blocks for later use, where it can be delivered as direct heat to power high-temperature industrial processes, or converted back into electricity. In this case, the heat is transferred to a circulating fluid that carries it to the POET plant, where it’s then delivered as steam to power boilers, distillers, and other machinery used in ethanol production.

Neither POET nor Antora have disclosed the value of this long-term offtake agreement. The sole external investor providing project-level financing was Australian firm Grok Ventures, a climate-focused investment company bankrolled by Mike Cannon-Brookes, co-founder and CEO of enterprise software company Atlassian. One of Australia’s richest people, Cannon-Brookes has emerged as one of world’s foremost climate investors, pledging $1.5 billion of his wealth to climate projects by 2030. Perhaps its telling of the investment environment at large that an Australian billionaire — rather than the U.S. government or institutional investors — had to push this first-of-a-kind project over the finish line.