Climactic's Midyear Update

We typically have sent these periodic updates to investors only. We decided to make it public - enjoy the read...

Climate change is becoming more real to billions of people this summer as we surpass record temperatures and extreme weather continues to dominate the headlines.??

It’s more important than ever for enterprises to hit their net zero goals, as sustainability also is headline news - and we are working hard to identify and enable the startups that can dramatically move the needle.? If we were a startup ourselves, then Q2 saw us building our “product” from an MVP into a scalable, repeatable machine.?

Sit back and enjoy this brief read from Climactic...

Q2 Dealflow in numbers

In Q2, we examined 137 companies, 4x what we saw in the same quarter last year.? We've conducted in-depth diligence on 8 companies, a 60% increase from the previous quarter, demonstrating the effectiveness of our growing expert network and industry knowledge. We are nearing decisions with several companies, maintaining our disciplined strategy in a market where many rush to invest. All this progress has been made despite a slowdown in the general early-stage market.

Portfolio markup

ClimateAi, our angel portfolio company focused on enterprise climate risk forecasting, raised $22 million in an oversubscribed Series B funding round. Although the company was beyond the stage we typically engage, the CEO asked for our help to craft their financing strategy and deck which was well received.? The round was led by Four Rivers Group, with participation from Neotribe’s Ignite fund and Yaletown Partners. Existing investors, Radical Ventures, Neotribe Seed Fund, and Academy Investor Network, topped up. This brings ClimateAi's total funding to $38 million. We congratulate Himanshu & the ClimateAi team!

Latest theses & investing focus

We doubled down on proactive thesis development in related areas of our successful portfolio companies, leveraging our prepared mind and network. By exploring both upstream and downstream in the value chain, we dug deep into:?

1. Supply Chain Circularity: Major enterprises like Coca Cola and Pepsi are integrating ESG/sustainability teams in revenue and cost centers. After our investment in The Arrive Platform, we continue to target companies that unlock the right flow of economic incentives with their tech stack for market players to win both financially and environmentally.
2. Private EV Charging: People charge where they work, sleep, and play - 80% charge at home, but that hasn’t worked for the 44M renters in the US alone. With the EV explosion underway, companies offering low-cost, low-power charging solutions with the right incentives for building owners are poised to take off.??
3. Scaling Electrification for SMBs and Consumers: As the ROI of electrification equipment improves and incentives come to life from the Inflation Reduction Act, scaling electrification shifts from product development to deployment. We're interested in software, fintech, and business model innovations that can scale deployment and capitalize on the maturing foundational tech stack.
4. Generative AI continues to shake up all aspects of tech and open up exciting opportunities within climate tech from sales improvement, energy management to supply chain resilience. We will continue to lead here and our AI Climate market map (see below) has been a great calling card.?

Building a sourcing and branding machine

At Climactic, we are building a robust sourcing and branding machine to enhance our dealflow and market presence:?

1. Content Creation: Our Climate Tech x AI? market map continues to gain momentum as 15+ CEOs of companies have reposted since they made it on the map. ? We also added 10 companies making a total of 100 as of May 2023 .? ? We remain active on LinkedIn with Josh publishing a call to action for CEOs as well as addressing consumer fear of climate change.?
2. High-profile industry events: Co-hosted by Josh and Meera Clark at Redpoint, the inaugural Scaling Climate Tech Summit brought together industry leaders to discuss climate tech strategies. Raj also co-led a Climate Tech Summit co-hosted by Alpha for over 100 entrepreneurs and VCs in the space.? Events such as this solidified our reputation as the leading enterprise software & mobility investor in the climate tech space.
3. Angel/Co-Investor Search Engine: As our dealflow expands, we want to systematize our relationships with the most valuable collaborators. We did a bottoms-up analysis of the largest contributors in our network and locked in 71 stellar sources of high-quality opportunities. We now share a fortnightly updated deal flow table with them, leading to a significant increase in high-quality deal opportunities.
4. Afternoon Tea Series: Our Founding Associate, Peter, has hosted 24 intimate Climate Tech Afternoon Tea sessions in NYC and SF since summer 2022. These handpicked, small group discussions have attracted many founders and industry leaders, featured Climactic in major communities such as My Climate Journey and NY Climate Tech, and generated 25% of the companies diligenced in Q2.

Feel free to reach out to Josh or Raj with any questions or comments.??

Yours sincerely,

Team Climactic