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Silicon Valley's latest bet on ClimateTech start-ups

Martin Roscheisen was once at the forefront of the photovoltaic industry, leading a start-up funded by Google's investors that was poised to usher in an inexperienced revolution by making solar energy less expensive than fossil fuel energy.

When studying computer science at Stanford with Google's Larry Page and Sergey Brin, the Austrian entrepreneur saw the dotcom boom and bust and concluded that renewable energy could be the next big thing to make a profit for buyers in Silicon Valley. “Increasingly more enterprise capitalists recognised clear tech as a class and began piling into that,” he says. “It grew to become very aggressive.”

However, while solar energy went on to become the most cost-effective source of energy on the planet, Silicon Valley had nothing to do with it. As a replacement, a massive expansion of Chinese solar panel manufacturing, backed by Beijing, resulted in an 80% reduction in the cost of photovoltaic energy over the previous decade. Roscheisen's start-up, which had developed a silicon photovoltaic panel replacement, went bankrupt in 2013, and he now owns a company that manufactures lab-grown diamonds.

After the financial crisis, Beijing funnelled money, property, and other inducements into its photovoltaic, wind, and electrical battery companies, but Roscheisen was one of the first waves of new energy start-ups that unfortunately didn't scale up to Beijing. According to PwC, venture capitalists lost roughly half of the $25 billion they put into the clean-tech industry between 2006 and 2011, prompting them to shift funds to developers of apps, software programs, and artificial intelligence that could be developed quickly without a lot of money.

However, China's performance in scaling up solar electricity, as well as related cost declines in wind energy and batteries for electric vehicles, has paved the way for a new round of investment in clean energy start-ups called "clear tech 2.0."

Buyers are rushing to put money behind clean energy producers and other businesses battling climate change, from emerging battery storage systems to sustainable aviation gas, lab-grown meat, and low-carbon concrete. Lots of companies have listed on US inventory exchanges in the last year by way of mergers with particular objective acquisition autos, or SPACS, raising billions of dollars. QuantumScape, a San Jose-based battery startup, was estimated at $21 billion when it went public last year. According to the Financial institution of America, listed companies that are set to benefit from a shift away from fossil fuels are worth a total of $6 trillion.

Creating a know-how from the lab into a low-cost, widespread product with the ability to reduce global pollution is notoriously difficult and time-consuming, which many buyers discovered painfully during the last decade. Analysts believe that this period is different since entrepreneurs are concentrating on a larger range of concerns and are backed by deep-pocketed business investors who have vowed to decarbonise their activities. Markets for his or her merchandise are also bolstered by commitments by governments equivalent to China and the EU to achieve net-zero greenhouse gas emissions by the middle of the century. Additionally, US President Joe Biden was elected on the promise of a $2 trillion renewable energy investment plan.

“Local weather is affecting everything now and so the businesses observe that relatively than being centred on one sector [such as solar,]” says Sophie Purdom, an investor who runs an e-newsletter masking the sector. “We really feel local weather personally now: corporates really feel it, the financial system feels it. It’s a ticking time-bomb that’s tangible, whereas earlier than it felt like an Al Gore chart on a slide.”


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