Sharing here what we at Cavalry Ventures found out during our Climate Tech deep dive.

1. Climate tech
🌲🌲🌲

2. AGENDA
2
Intro to Climate
Tech
10min 15min 10min 10min
Let’s start with the
basics
What’s the investor’s
point of view?
👨🎓‍‍ 🕵
Investments /
Investors
Let’s dig deeper #1 Let’s dig deeper #2
🛒
🚚
Supply Chain
Transparency
Voluntary
Carbon Market

3. Part 1
Intro to
Climate Tech.
3

4. Climate disasters abound
4
If nothing changes to reduce emissions –
global temperature is on track to rise by
2.5’C to 4.5’C by 2100
Source: Nasa

5. Halting climate change will be costly 💸💸
5
$4Tr yearly investment by 2030 in clean
energy is needed to restore and adapt to
the impact of climate change
Source: Sustainable Markets Initiative, International Energy Agency

6. “It is my belief that the next 1,000
unicorns won’t be a search engine,
won’t be a media company, they’ll be
businesses developing green hydrogen,
green agriculture, green steel and green
cement”
Larry Fink CEO & Chairman of Blackrock
“there will be eight Teslas, ten Teslas, but
only one of them is well-known today”
Bill Gates on Climate Tech
What can we do as a VC? … well there’s something called
Climate Tech that brings along some nice Xs🤑 🤑

7. 7
/ˈklʌɪmət/tɛk/ : Technologies explicitly focused on reducing GHG emissions /
addressing the impacts of climate change
Climate Tech - not just a buzzword
🐝
Source: PwC, dealroom

8. 8
1. Directly mitigate /
remove emissions
2. Help adapt to the
impacts of climate
change
3. Enhance our
understanding of
the climate
OR OR
E.g. Renewables,
alternative protein, clean
industry, carbon capture &
removal
E.g. Crop protection, water
recycling, climate
insurance, nature
conserve
E.g. Carbon tracking,
monitoring
Climate Tech - not just a buzzword
🐝
Source: PwC, dealroom

9. Climate Tech subsectors
9
Source: TechFounders, Unep, CTVC
• Smart mobility & micromobility
• EVs & infrastructure
• 0 emission aviation & shipping
• Alternative fuels
• Recycling & efficient
manufacturing
• Steel, cement, chemicals
• Metals and mining
• Sustainable finance and
investment
• Climate risk & reporting
• Carbon offsets/marketplaces
• Energy and resource-efficient
building and renovating
• Heating and cooling
• Construction
• Clean and secure energy
• Grid management
• Energy storage
• Healthy and sustainable food
system
• Alternative proteins
• Farming methods
MOBILITY
BUILDINGS
INDUSTRY FINANCE
INSURANCE
& ANALYTICS
FOOD &
AGRICULTURE
ENERGY
No clear line – other vertical
divisions include: climate
mgmt, carbon.

10. Maturity of Climate Tech
Sub-headline
10
Source: CTVC
Specific sectors & subsectors (mobility, energy, food) have experienced more
innovation activity and development in the past 2 years

11. 11
Prototype stage
- R&D
Demonstration
stage – full scale
demo /pilot
Commercial
adoption – proven
commercial BMs
• Direct air carbon
capture and storage
• Low GHG iron and steel
• Low GHG shipping
• Alternative foods
• Food waste technology
• Green hydrogen
• Sustainable aviation
fuel
• Light-duty battery EVs
• Solar & wind power
• Micro mobility
Source: PwC
Classifying the maturity of Climate Tech
Some energy & mobility climate tech solutions are already commercially adopted
Source: CTVC

12. 12
Mobility & transport deepdive
Key trends & innovations Maturity
Unicorns 🦄
• Innovations & focus areas: EVs, electrifying transport
systems, micro mobility, low GHG shipping, new
mobility models
• Uber, Lime and Arrival committed to net zero
emissions by 2035
• Most funded sector
• Commercial adoption of: light-duty batter EVs, micro
mobility
• Demonstration: Sustainable aviation fuels
• Prototype: Low GHG shipping
∼55%
of
🦄s
⚠ Out of 78 total (according to PwC), 47 total
(HolonIQ)
Source: PwC, HolonIQ, Cavalry Analysis

13. 13
Food, agriculture & land use deepdive
Key trends & innovations Maturity
Unicorns 🦄
• Plant-based meat and dairy alternatives
• New pressure to reduced food loss and waste
• New farming methods (e.g. vertical and urban
farming)
• Demonstration stage of alternative foods
∼15% of
🦄s
Source: PwC, HolonIQ, Cavalry Analysis

14. 14
Energy
Key trends & innovations Maturity
Unicorns 🦄
• Current investor interest is driven by hydrogen and
energy storage – further fuelled by several national
hydrogen strategies
• ReFUelEU Aviation initiative aims to reach 5%
sustainable fuel in EU by 2030, 63% by 2050
• Commercial adoption: renewables(solar & wind)
• Demonstration of CCUS in power and sustainable
aviation fuels
• Prototype of ocean and tidal power and direct air
carbon capture and storage
∼10% of
🦄s
Source: PwC, HolonIQ, Cavalry Analysis

15. 15
Industry, manufacturing & resource mgmt deepdive
Key trends & innovations Maturity
Unicorns 🦄
• Fastest growing lever is low GHG iron, steel and
aluminium
• Initiatives such as SteelZero commit to procure 50%
net zerp steel by 2030 and 100% by 2050
• Most developed subsectors are circularity recycling
/ material efficiency and energy/resource efficient
manufacturing
∼10% of
🦄s
Source: PwC, HolonIQ, Cavalry Analysis

16. 16
Finance, insurance and analytics
Key trends & innovations Maturity
Unicorns 🦄
• Often separated/including carbon & climate
management
• Creation of green & new products, assessment of
climate risk
• Fastest growing lever is climate risk and resilience
management
• Most funded levels are climate/earth data
generation
∼ 5% of
🦄s
Source: PwC, HolonIQ, Cavalry Analysis

17. 17
Buildings
Key trends & innovations Maturity
Unicorns 🦄
• Buildings and materials move towards becoming
more efficient, smarter and cheaper
• Global Cement and Concrete Association is set out
to achieve net zero by 2050
• Fastest growing lever is building level electricity and
thermal storage
• Most funded lever is smart management of devices
<5% of
🦄s *soonicorn
Source: PwC, HolonIQ, Cavalry Analysis

18. Part 2
Venture Capital
in Climate Tech
18

19. Investments
Venture Capital in climate tech 🤠

20. 14
20
Climate tech investment now accounts
for 14 cents of every VC dollar

21. Where are we today? - Size & Volume 🌍
21
Source: PwC State of Climate Tech 2021
Climate tech startup funding is booming…
… however numbers of early stage rounds
have stagnated since 2018.

22. Where are we today? - Geographies
22
💸
💸
💸 💸
💸 💸
💸 💸
💸
💸
Start-up HQ
San Francisco
London
Berlin
New York
Boston
Stockholm
Amsterdam
Paris
Seattle
Los Angeles
65%
NA
10%
CHN
21%
EU
4%
other
North America has been the most prominent region for
attracting climate tech investments.
Source: PwC State of Climate Tech 2021

23. Where are we today? - Size & Volume
🇪🇺
‍
23
Source: Dealroom
The European climate tech ecosystem is
following the same trend, doubling down
in value since 2020…
… while early-stage investment has
increased 2.5x since 2017.

24. How has climate tech investment performed?
24
The EIP Climate Tech Index tracks the
performance of public companies that
support global decarbonization.
Source: Energy Impact Partners
Climate tech companies have
outperformed the Nasdaq since 2018.

25. Climate tech investments vs. other verticals
25
Since 2017, climate tech is the fastest-
growing investment vertical in Europe
(10x).
Only fintech startups have attracted more
investment in Europe ($24B vs $12B).
Source: Dealroom
🇪🇺
‍

26. What’s
🔥
right now?
26
Source: Pitchbook
Company Hq Focus Deal size ($m) Close date (2022)
Climeworks 🇨🇭‍ Direct Air Capture 650 April 5
Crusoe Energy Systems 🇺🇸‍ Gas & Oil 505 April 20
Group14 Technologies 🇺🇸‍ Battery 400 May 4
Upside Foods 🇺🇸‍ Food 400 March 22
Plenty 🇺🇸‍ Vertical Farming 400 Jan 25
Palmetto 🇺🇸‍ Solar 375 Feb 24
Beta Technologies 🇺🇸‍ Electric aerospace 375 April 4
Hozon 🇨🇳‍ Electric vehicles 315 Feb 20
Volta Trucks 🇸🇪‍ Electrics trucks 261 Feb 21
Sunfire 🇩🇪‍ Green Hydrogen 216 March 24
Notable deals in 2022

27. 27
Source: Holon IQ, CTVC
Though still small, the number of climate tech
unicorns is growing. Of the 1,000 Unicorns today,
the 78 in climate tech make up 7.8% of the overall
herd (29 new in 2021).
Younger climate tech companies are taking less
time to become unicorns. Almost 60% of the
climate tech unicorns in 2021 reached the
coveted $1B status in less than 7 years (industry
baseline).
Watershed brings more software+carbon to
the climate tech mix.
What’s
🔥
right now?
What about
🦄
?

28. 28
Source: Dealroom
There are now 16 European climate tech
unicorns, 11 of which were created in 2021.
A majority of these unicorns are deep tech
companies, but an emerging class of non
deep tech unicorns can be observed.
What about
🇪🇺🦄
‍ ?
What’s
🔥
right now?

29. What’s next?
29
How will the current market environment impact climate tech fundings ?
Source: CTVC
There’s ample climate capital to keep
investing despite economic downturns.
Capital will likely flow towards earlier
stage companies with a return curve
further out, and into quality later-stage
companies that have more traditional
revenue return profiles.
Dry powder indicates how the sector
would still be able to support growth.

30. What’s next?
30
Where will we find the next gigacorns?
Gigacorns: a company that has achieved lowering or sequestering CO2 emissions by
1GT/year while being commercially viable.
❓
Source: PwC State of Climate Tech 2021

31. Investors
Venture Capital in climate tech 🤠

32. Who are they?
32
Source: CTVC
Overview of the 170+ climate tech investors 🌍

33. 33
Source: CTVC
Fund size is usually between $100-499m,
with a majority of climate-sector specific,
climate first, and generalist VCs.
North America and Europe VCs lead the
race, with 80% of the investors focusing on
early stage rounds (pre-seed, seed, early).
Who are they?
Climate tech VCs by size, strategy, stage, and geography

34. 34
Who are they?
The line between generalist and climate tech specialist VCs is blurring.
Climate tech specialist VCs vs Generalist VCs
Source: Dealroom & Talis

35. 35
Who are they?
Dedicated European climate tech funds raised in 2021
More than $2.6bn was raised in Europe in 2021 to fuel climate tech investments.
Source: CTVC

36. What’s next?
36
What regulations will catalyse climate tech investments? 👨⚖‍‍ 👩⚖‍‍
Source: EU Green Deal
REPower EU
Fit for 55: reach 2030 targets of 55% GHG
reduction(focus on energy, building, mobility)
Environmental and resource package
(focus on resources, environment, biodiversity)
2019 EU Green Deal
Packages
Strategies & legislative proposals
Goal
Independence
from Russian
energy imports
by 2027 (coal, oil,
gas)
CBAM
Renewable
Energy
Directive
LULUCF
Energy
Tayation
Directive
Refuel
Aviation
Alternative
Fuel Infra
FuelEU
Maritime
TEN-T
Policy
EU ETS I & II
Energy
Efficiency
Directive
Energy Perf.
Of buildings
Hydrogen &
decarboniz
ed gas
package
Zero
Pollution
Action Plan
Farm to
Fork
Strategy
Biodiversity
Strategy
Soil
Strategy
Circular Economy Action Plan II
EU taxonomy for investments in sustainable activities

37. Part 3
Deep Dives
37

38. 38
Don’t worry! It is not all hardware 😎
Source: pinver

39. Supply Chain Transparency
Deep Dive #1 🤠

40. 40
Pain points
⭐
⭐
⭐
Supply chains are a pain for decision makers
Source: IOT Analytics
⭐

41. 41
How are pain points related to climate?
Upstream
shortages
Global
dependencies
Downstream
demand meeting
8 highly
polluting supply
chains account
for 50% total
global
emissions
⚠ Automotive & electronics are 2 of the dirtiest
supply chains driven primarily by batteries (ironic)
Disruption due to
extreme weather
events
Contributors to climate change Impacted by climate change
Materials
Others
Security of supply
Waste
We need decarbonized and resilient supply chains.
Source: Linkedin, accenture, gartner

42. 42
🛑✋Supply chain 101 before diving deeper
Supply chains are actually supply networks Supply chain emissions scope terminology
🏭Scope 1: GHG emissions created by a company
directly (e.g. machine running, own
transportation)
⚡Scope 2: indirect emissions, (e.g. electricity
from power companies)
🛍Scope 3: all emissions that a company is
indirectly responsible for (e.g. 3rd party suppliers,
partners and customers)
Though the term might be misleading, supply chains
have little resemblance to chains.
The efficiency and cost optimization objective of
supply network does not enable easy transparency and
resilience.
Source: CTVC, FT

43. 43
How big is the problem?
Ratio of scope 2 & 3 emissions to scope 1 (2019)
Scope 3 generally accounts for 60% of total emissions - and is extremely
complicated to monitor
Source: CTVC, FT, CDP

44. 44
What is the solution?
Transparency Traceability
A value chain is only as strong as its weakest link
Source: CTVC, accenture
Ability to broadly map the entire
supply chain
Ability to trace the impact of
individual components within a
supply chain
+
Visibility on decarbonization (quantify emissions) and resilience (qualify risks)

45. 45
What is the solution?
Supply chain transparency – traceability spectrum
Source: CTVC
Players are tapping into the whole spectrum of transparency - traceability
solutions

46. 46
What’s
🔥
in supply chain transparency?
Source: CTVC
Supply chain intelligence market map

47. 47
Ratings & risk analytics tools
Enable companies to identify,
map, and engage with their
supply chain network, in a
broad form. They allow for
assessment of concentrations
of risk (e.g. regulatory
disruptions, climate-related
events), and facilitate real-time
monitoring within a single
platform
Provider of business sustainability ratings.
Monitor and improve the sustainability
performance of their business and trading
partners. Evidence-based ratings are validated
by a global team of experts. Its actionable
scorecards provide benchmarks, insights, and a
guided improvement journey for environmental,
social and ethical practices.
Founded in 2007, now raised USD700M & became
a unicorn
What’s
🔥
in supply chain transparency?
Source: CTVC, crunchbase

48. 48
What’s
🔥
in supply chain transparency?
Source: CTVC
Supply chain intelligence market map

49. 49
Sustainability & quality control platforms
Help companies meet
compliance, quality, and
sustainability requirements
across their products’ lifecycle
by establishing a complete
overview of multi-tier supply
chains
Offers its customers a global network of
responsible and carefully monitored suppliers
so companies can better source environmentally
conscious inputs with the ability to offset the rest
through carbon removal projects
Founded in 2020, series A USD32,2M
Backed by
What’s
🔥
in supply chain transparency?
Source: CTVC, crunchbase

50. 50
What’s
🔥
in supply chain transparency?
Source: CTVC
Supply chain intelligence market map

51. 51
Product & commodity-level emission quantification
Automate carbon accounting
of supply chains, at a product /
commission level. This is very
different depending on
industries, as many tackle the
issue vertically.
Fast, scalable life-cycle assessments of
materials and products to help fashion brands
lower their carbon emissions.
Founded in 2021, series A USD2,1M
Backed by
What’s
🔥
in supply chain transparency?
Source: CTVC, crunchbase

52. What’s next in supply chain transparency?
52
What is next
Prepare for when regulation gets serious
As SEC climate disclosure momentum grows,
anticipate more homegrown US supply
chain solutions.
Not forgetting Scope 3! Net zero will never be
reached by targeting Scope 1 & 2 alone
As an investor you should look out for…
Source: CTVC, accenture
Verticalization first - supply chains are
industry specific… it makes sense to land 1
and then expand
It’s not only about the GHG - weakest links in
supply chains related to other ESG must also
be addressed

53. Voluntary Carbon Market (VCM)
Deep Dive #2 🤠

54. What’s wrong right now? 🤯
54
Source: SwissRe
For most 1.5ºC pathways, even with
drastic decarbonization, 6-10 Gt of CO2
will need to be removed yearly by
2050 (10-15x Germany’s yearly CO2
emissions).
2500 Gt tons of CO2 have been sent
into the atmosphere since 1850 – half
in the last 30 years - and additionally
50bn tons of CO2 are dumped yearly.
We need to drain the bathtub in addition to turning off the tap

55. How does the VCM differentiate from the mandatory market?
55
Mandatory vs Voluntary Carbon Market
Carbon Offsetting: is financing the reduction of expected greenhouse gas (GHG)
emissions elsewhere for an amount that equals your own realized GHG emissions.
❓
Source: Sustainalize
CO2 Cap Net Zero

56. How does the VCM differentiate from the mandatory market?
56
Emission Reductions vs Carbon Removals
Source: SwissRe
Traditional carbon offsets result in
emitted carbon staying in the system.
Carbon removals actually take
carbon out from the system.
Mandatory market Voluntary market

57. How can we gauge the quality of a carbon offset?
57
4 essential criteria to consider
Additionality
Would that carbon be offset if the credit wasn’t
generated?
● If an offset is issued from a forest preserve
protected in perpetuity, that offset is not
“additional.”
Leakage
What is the risk of displacing activities that
cause greenhouse gas emissions from the
project site to another site?
● If an offset is meant to protect a patch of
the Amazon from deforestation from soy
cultivation, but a separate patch of the
Amazon is cut down for soy instead, then
that offset resulted in “leakage.”
Permanence
What is the risk of stored carbon being re-
released into the atmosphere?
● How do you account for the flux in
durability of storage either through
voluntary (intentional) or involuntary
(extreme weather, exogenous biotic or
abiotic factors) reversal events?
Verification
Can the offset be verified through a registry and
science-based methodology?
● New methodologies for removals (e.g.,
sinking carbon-dense kelp to the ocean
floor, etc.) can be difficult and time
consuming to verify, delaying actual
removals.
Source: Oxford

58. How can we gauge the quality of a carbon offset?
58
Taxonomy of Carbon Offsets
Source: Oxford

59. How was originally the VCM?
59
The Legacy Voluntary Carbon Market
Source: CTVC
🤯
🤑
🤑

60. 60
The
🔥
segments of the VCM market
Source: CTVC
How does the VCM function?

61. What’s
🔥
in the VCM?
61
Direct Procurement
Source: CTVC

62. 62
Direct Procurement
Source: CTVC, Stripe Climate, Stripe
New players enable companies
to directly procure carbon
credits without brokers and
middlemen.
Carbon removals are sold as
“future vintages”, that means,
commitments to support
projects that will remove carbon
in the future. This also enables
more ambitious projects to be
developed.
Via Stripe Climate, Stripe allows its clients to
direct part of their revenue to help scale
emerging carbon technologies easily.
By doing this, more demand is created and
carbon removal technologies can get down the
cost curve and up the volume curve.
Stripe portfolio includes Climeworks, Project
Vesta, Charm Industrial and Carbon Cure
ranging from $75-$750 per ton of carbon
removed.
Now, over 10,000 of Stripe’s own customers now
contribute to purchase carbon removal through
the platform.
What’s
🔥
in the VCM?

63. 63
Source: CTVC
What’s
🔥
in the VCM?
Independent Quality Enablers, Marketplace, Web3

64. 64
Independent Quality Enablers, Marketplace, Web3
Source: CTVC
Independent Quality
Enablers
Carbon Removal
Marketplaces
Web3
Operate as third party
orgs with no direct link
with carbon projects.
Ensure better quality
carbon projects using high
quality data, machine
learning and AI methods.
Create marketplaces and
bundling services to supply
high quality removal
credits (e.g. Patch, Pledge).
Integrate vertically to
combine marketplaces
with verification and
ratings (Puro Earth, Sylvera,
BeZero).
Help with market
transparency and liquidity.
Examples of applications:
tokenization of carbon
credits (Toucan,
Flowcarbon) and ecosystem
protection (Single.earth)
Non-profit organization
n/a
Series A, 26.5m Seed, 4.5m
Acquired by Nasdaq
Series A, 38.4m
n/a
n/a
Seed, 7.9m
Series A, 70m
What’s
🔥
in the VCM?

65. What’s next in the VCM?
65
Trends
Source: CTVC, SouthPole
Increase in demand of carbon credits is
leading to a rise in prices, enabling more
ambitious carbon projects to be developed.
From an investor’s perspective, you should
anticipate startups that will vertically
integrate:
Anticipate startups with business models
covering the entire value chain (from
originating the project to selling offset
packages directly to corporates)...
… in a specific niche (e.g forestry, soil
carbon)...
…. through high performing verification and
accounting.

66. The End.
Thank you for
your attention!
66

67. 67
Want to learn more about climate tech?
Useful resources
Newsletter Blog/Website Podcast

68. www.cavalry.vc