Valo Viewpoints

Dear Friends of Valo,

In this edition of Valo Viewpoints, we share our recent investment thesis for the “electrification of food” and our investment in Clever Carnivore . In addition, we discuss four brief decarbonization insights, takeaways from our latest research-driven convenings, upcoming events where we’ll be hosting thesis workshops, and notable portfolio progress.

Recent Valo Insights

Getting to the Meat of Our Inefficient Food Production System

2023 was a landmark year for cultivated meat in the US, with both Upside Foods and Eat Just receiving FDA and USDA approvals. Once the US regulations around cultivated meat were clarified, Valo set out to find a company that could surmount the key hurdles cultivated meat companies face—namely, making the biology work outside of an animal and scaling cost-effectively to achieve mass market pricing. Upon meeting startup Clever Carnivore, we were immediately impressed by what the team had achieved in a short time. For an in-depth look at our investment rationale, read more here.

Read more →

Decarbonization Themes

1. What makes green hydrogen truly “green”: Amid growing interest in green hydrogen, new regulations on how to define “green” are coming to the US and EU. At the end of last year, the US Department of the Treasury and the IRS published a proposal for new requirements for green hydrogen, similar to those announced by the EU in June 2023. Stipulations for green hydrogen production (45V tax credit) include: “additionality,” “hourly carbon-free energy matching,” and “proximity” guidelines. These rules aim to ensure that new carbon-free electricity capacity is built to match the increasing electricity demand from electrolyzers so that green hydrogen is truly green.
2. Rethinking “abundant” materials: The world produces 400 million tons of fossil-based plastic each year, and there are 1.85 billion tons of carbon on Earth. Meanwhile, these two materials are compromising the atmosphere and the health of our natural resources. How might we rethink these waste streams and shift the negative impacts of our economy through novel technologies? In partnership with At One Ventures, we explored this theme during an evening salon in San Francisco with a number of experts, investors, and technologists.
3. Nuclear’s pathway to “commercial liftoff”: The DOE recently published a liftoff report on Advanced Nuclear, noting that US domestic nuclear capacity has the potential to scale from ~100 GW in 2023 to ~300 GW by 2050, driven by the deployment of advanced nuclear technologies that provide a differentiated value proposition for a decarbonized grid. However, the nuclear industry is at a commercial standstill. The DOE outlines what they believe is needed for advanced nuclear to realize the industry’s potential to support the energy transition in the US, including (1) committed order book generation, (2) project delivery, and (3) industrialization.
4. Record US energy productivity achieved in 2023: BNEF recently released their annual factbook and one of the more notable takeaways was about energy productivity in the US. In a positive signal for decarbonization, energy productivity reached record levels last year, demonstrating that economic growth can be decoupled from energy use. While GDP grew by 2.4% in 2023, primary energy consumption slowed down by 1.4% year-on-year, resulting in the highest-ever economic output per unit of energy consumed. (Source)

Events

McKinsey Green Business Building Summit, San Francisco

During McKinsey’s Green Business Building Summit in San Francisco, Valo Partner Scott Tierney moderated a panel, Matching in the Moment, focused on how to achieve 24x7 carbon-free energy. Read more about our 24/7 carbon-free energy thesis.

Abundant Materials Evening Salon, San Francisco

In partnership with At One Ventures , Valo hosted a unique evening salon on Abundant Materials, convening founders, experts, and investors to engage across four material categories: Carbon, Metals & Minerals, Biomass, and Plastic Waste. We explored how to make products that work with the Earth and economic models that reward abundance and circularity vs. scarcity. For each material, participants discussed the key areas of technological investment, business model innovation, and policy changes needed to unlock the sustainable potential of the material and featured relevant portfolio companies at the intersection of these themes, including Arris Composites, Inlyte Energy, Modern Hydrogen, and Novoloop. Preview the recap video here.

Join our team at the following 2024 conferences:

• CERAWeek , Houston, TX March 18-22
• Future Food Tech, San Francisco, CA March 21-22
• SuperVentures + SuperReturns West, Los Angeles, CA April 8-10
• VC Platform Global Summit, Miami, FL April 15-17
• BNEF Future of Energy, New York, NY April 16-17
• Equity Summit, Tucson, AZ April 17-19
• SF Climate Week, San Francisco, CA April 21-27
• NREL Industry Growth Forum, Denver, CO May 1-3

Portfolio Progress

We are thrilled to have portfolio companies BioSqueeze Inc. , Boston Materials, Granular Energy, and Modern Hydrogen presenting next week in CERAWeek’s Agora Innovation Pod Program. We will share takeaways from the conference in our next Viewpoints newsletter.

ARRIS introduced a new product, the Arris Made to Outperform (MTO) bicycle spokes, constructed from carbon fiber-reinforced thermoplastics (CFRTP) using Arris’ software, materials, and manufacturing technology platform Additive Molding.

Basecamp Research announced BaseFold, a breakthrough in 3D protein structures that has improved the accuracy of AlphaFold2 structures up to 6X. Basecamp also expanded its collaboration with Protein Evolution Inc., a biological recycling company working to decarbonize plastic production around enzyme development to help eliminate global polyurethane and polyamide (nylon) waste.

eduMe was featured in Built In's list of 5 leading edtech companies in the UK.

Granular Energy was featured in Cleantech Group's 2024 Global Cleantech 100 list of leading startups.

Inlyte Energy was featured in Silicon Valley Business Journal’s list of 2024 Startups to Watch.

Modern Hydrogen has been featured by Seattle Inno and Climate Tech Cocktails as a top startup to watch this year.

Novoloop has announced the construction of a pilot plant in partnership with Indian company Aether Industries Limited to trial its process for manufacturing chemically upcycled thermoplastic polyurethane (TPU) from post-consumer plastic waste.

Optera has partnered with the Retail Industry Leaders Association (RILA) to develop a Direct-Use Product Emissions Database (DPED), enabling retailers such as Lowe's and Target to create a new level of emissions transparency, reporting, and management.

Simbe has expanded its partnership with SpartanNash, bringing Simbe's store intelligence platform, Tally, to 60 additional SpartanNash stores.

UrbanFootprint was named a GovTech 100 company for driving data insights innovation across the US.

Optimistically yours,

-The Valo Team