Member Spotlight: Climactic
Our first physical climate innovation hub opened last week in San Francisco, and we are starting to bring the climate community together both in-person and digitally.
The kind of massive innovation needed to solve our climate challenges requires us to act as a collective force, which is why 9Zero is working to accelerate climate solutions by enabling all stakeholders in the ecosystem – startups, investors, corporations, service providers, policy makers, and academics.
The first venture capital firm to join the 9Zero community and work from the San Francisco climate innovation hub was Climactic. We asked if they’d share some of their story with us.
9Zero: Tell us a bit about Climactic and what types of companies/people you invest in?
Climactic: We at Climactic invest in startups seeking to create efficiency and remove friction for commercialized technologies to scale to the max decarbonization impact they can - from energy to mobility, supply chain, product life cycle and more. We seek to invest in pre- seed, seed and series A rounds, yet our sweet pot is funding around $2.0M in the seed stage as a lead or co-lead investor. We seek climate tech founders who are hungry for impact but willing to work with industry realities. We have invested in 13 companies to date and are actively seeking more.
9Zero: What are the benefits you see from working out of 9Zero San Francisco?
Climactic: We are thrilled about our move to 9Zero. While we have been officing in co-working spaces for our entire fund's life, we have been longing for more collaboration with the climate tech ecosystem. When we heard about 9Zero's mission to bring together founders, VCs and non-profits with the shared goal of transforming how we work and live, we knew we had to be part of the grand experiment. We are looking forward to being more than neighbors; we will be collaborators, mentors, students, all driving forward the shared vision of a sustainable future.
9Zero: What advice do you have for climate entrepreneurs looking to raise capital?
Climactic: A Dream Team Matters: Climate tech is too vast for one single investor to know like the back of the hand. Leveraging a diverse set of investors beyond just the big names is crucial. Consider exited founders, strategic partners, industry experts with extensive networks, and vertical specialist funds to bridge the gap between general tech, climate tech, and industry resources.
More is Not Right; Realistic is Right: The 2020-22 investment surge has shown that accepting excessive funding without a clear, realistic plan for growth can hinder long-term success. It's vital to set realistic milestones for future rounds and walk back to the necessary funding based on the timeline to achieve these goals.
Seek Non-Dilutive Financing: Explore options like government grants, corporate partnerships, and innovation challenges. These sources of non-dilutive financing help retain more equity in your company, preserving your control and providing flexibility for future funding rounds. This strategy keeps your business agile and maximizes value for both founders and investors over time.
9Zero: Tell us about some of your portfolio companies, and how you’re approaching future investment opportunities?
Climactic: Renoster is revolutionizing the booming nature-based carbon sequestration offset market with a software and data platform that offers faster, cheaper, and more accurate monitoring and verification (MRV). Their innovative approach introduces an intuitive, detailed, and transparent rating system that outperforms traditional methods used by today’s nonprofits and for-profits. Seen as a critical advancement for enhancing the quantity, speed, and quality of offset projects essential for achieving net-zero emissions, Renoster's credibility is bolstered by a team led by the former Head Scientist at Pachama. Their work is already gaining early accolades for its transparent algorithms that highlight existing inaccuracies in current MRV practices.
Arrive is a leading infrastructure provider for re-commerce. Arrive creates a future where every brand and retailer has a recommerce offering to further monetize and extend the life of their products. The primary pathway to circularity after a product is sold is through product returns - a largely untapped, enterprise-scale product stream that grew 14.2% in 2021. Arrive receives a percentage of transactions and SaaS fee for facilitating the resale and managing the reverse logistics. CFOs love this additional margin and revenue stream and we are also excited about the circularity while limiting disposition in landfills. Arrive’s co-founders, Rachelle and Ross, have demonstrated remarkable leadership, tech-first strategies and coachability during years working with Josh, where he led their seed while at Freestyle.
Populus AI is providing a software platform for cities to manage, track, and pay for fleet parking and activity (bikes, scooters, commercial fleets). Cities are facing challenges in adapting their transportation systems to rising commercial fleet usage and increasing congestion, compounded by outdated pricing and enforcement methods.There is an urgent need for more effective, technology-enabled solutions to manage this shift and implement smart transportation initiatives efficiently as commercial and networked vehicle usage continues to grow.
Populus is an impact enabler that provides the necessary tech infrastructure and incentive alignment for city DoTs and commercial fleet operators to reduce emissions, optimize road usage, and enforce fair road access at scale.
We expect the pace to increase in 2024 as the fund close is behind us and we see an increase in high quality entrepreneurs at reasonable valuations. We believe that to get to net zero we need to decarb the value chains of the top 50 companies in the world - but to do this successfully, they’ll need robust solutions in software and software-enabled hardware to scale what already makes commercial sense - and this is precisely where we see an opportunity to make the biggest impact.
9Zero: What are you most excited about when it comes to the future of climate innovation?
Climactic: AI in all Climate Tech: Current methods, talents, and infrastructure fall short in addressing climate challenges at scale, highlighting opportunities for specialized AI. Climate sectors are distinctive for high specialization and tight integration with physical assets, which provides a strong barrier against generic AI models.
We are excited about three schools of AI applications: AI that accelerates bottoms-up, highly manual processes like grant applications, AI that unifies HW and SW interactions like computer vision x robotics for labor empowerment, and AI that unlocks unprecedented top-level design like capital planning for decarbonization.
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