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The State of Climate VenturePolicy: tailwinds, risk, and reliability

By Vaughn Blake, Partner at Blue Bear Capital

Wobbly markets and legislative morass. Rising interest rates and AI run amok. Bank runs and recaps. While last year saw climate tech riding high in the saddle, seemingly invulnerable to the wider startup downturn, 2023 presents a very different picture — one in which both investors’ and founders’ mettle seem to be tested at every turn.

Vaugh Blake is Partner at Blue Bear Capital, a venture and growth equity investor. Blue Bear recently led the $17.5M Series A for Charger- Help! (Joules Cohort 10).

Despite market concerns and political ambivalence, our most pressing climate challenges are still in need of solutions. At Blue Bear Capital, we focus on data-driven solutions across energy, infrastructure and climate. We believe that while the deployment of industrial assets like wind, solar, storage and electric vehicle infrastructure are critical to advancing the energy transition, the ongoing operations and maintenance of those assets are equally integral. While doing our best to stay balanced during these short term market undulations, we see 2023 as a watershed year, where the convergence of machine intelligence and human creativity will unlock solutions across the energy and climate landscape.

From a policy perspective, with both the CHIPS Act and the IRA (Inflation Reduction Act) unavoidably encountering implementation challenges, it’s been encouraging to see the BIL (Bipartisan Infrastructure Law) /IIJA’s (Infrastructure Investment and Jobs Act) NEVI programs roll out with relative success. And while EV sales continue to rise at a record pace, public charging infrastructure continues to grapple with uptime — as of now up to 30% of chargers experience operability issues, leading to frustration among new EV owners which can stall adoption . In hopes to relieve this component of driver stress, the NEVI program is requiring uptime guarantees for all deployments that receive funding through the program. ChargerHelp! is a Los Angeles-based company focused on solving this problem. Through data and workforce development training, ChargerHelp! is able to remotely diagnose (and in some cases, remotely mitigate) inoperability issues across the widely varying combinations of OEMs, networks, and geographies that encompass public charging infrastructure. Beyond its software capabilities, ChargerHelp!’s focus on re-skilling and upskilling a new generation of EVSE technicians through its workforce development program make the company multivariate in its approach to advancing the energy transition.

Though venture funding within the climate tech vertical fell by about a third in Q1 of 2023, investors found a way to bet on the energy transition at a different layer of the capital stack: the project layer — more specifically, long duration storage. With price volatility due to climate-driven shocks to the grid at an all-time high, return expectations (through taking directional bets on power prices) for long duration storage projects hover around 20% —significantly higher than the single digit return expectations of wind and solar projects. Given the dual environmental and financial upside, it’s no surprise that investment within the space is expected to double over the course of 2023. And although we remain enthusiastic at the pace of deployment, one specific and devastating risk — fire risk remains a concern with respect to these assets.

Accure, a German battery startup, has emerged as a pioneering force in the field of battery safety. With the rapid growth of electric vehicles (EVs), energy storage

systems, and portable electronics, the demand for high-performance batteries has skyrocketed. However, safety concerns, particularly the risk of battery fires, have presented significant challenges. Accure’s innovative approach combines cutting-edge technologies and predictive analytics to effectively predict and mitigate battery fires, ensuring a safer and more sustainable future. By combining advanced machine learning algorithms, sensor data analysis, and real-time monitoring, Accure’s predictive system can identify early warning signs and potential hazardous conditions within batteries. This holistic approach allows for proactive measures to be taken before critical situations arise.

At Blue Bear, we have a fundamental belief in two things: that the world will require more clean energy assets over time, and that those assets will need more digitization to be optimized, enabled, and protected. As markets inevitably stabilize and policy initiatives gain traction, our outlook remains long-term, disciplined, and optimistic about the data-driven solutions that will move the world towards a brighter, cleaner, and more electrified future.

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