Starshot, a climate technology fund, was founded by Sam Levac-Levey and Jeremy Brewer.
Lora Kolodny for CNBC
Childhood friends Jeremy Brewer and Sam Levac-Levey started their first clean energy startup in 2018. Six years later, they founded a new venture capital fund to invest in public companies Climate technology is ignored by companies in the same industry.
Brewer, who worked at Google And Facebookand Levac-Levey, who worked as a mechanical engineer at Tesla and SpaceX, is a co-founder of Starshot Capital. The company just raised $35 million to invest in early-stage startups that the two friends believe have the potential to reduce greenhouse gas emissions in polluting industries beyond energy and transportation .
“What really motivated us to start the fund was seeing a lot of data about the climate crisis and the gaps in funding,” Brewer said in an interview.
Starshot intends to support startups operating in the food and agriculture, industry, manufacturing and construction sectors.
Based on PwC 2023 Study on the state of climate technology, more than 70% of investments are going into energy and mobility. These two sectors include wind and solar power, as well as electric cars, airplanes and other vehicles.
But Brewer said these sectors only account for about 27% of global carbon emissions. Starshot sees investment opportunities in industries that emit large amounts of greenhouse gases and consume a lot of natural resources.
Gaps also persist in some sectors that have attracted funding. For example, in the food and agriculture sector, about 40% of climate technology funding over the past two years has gone to “alternative proteins”, while less than 5% has gone to mitigation solutions or replace nitrogen-based fertilizers, Brewer said.
Overuse of nitrogen-based synthetic fertilizers in agriculture leads to nitrogen oxide emissions and can pollute both surface and ground water sources. It can also increase the amount of algae growing on the surface of natural water resources. That can lead to reduced oxygen levels in the water, killing fish or other marine life.
Starshot is looking to invest in companies that provide “gigaton-scale solutions that can increase profits and revenue for their customers,” Brewer said.
Brewer and Levac-Levey attended high school together in Montreal. They teamed up in 2018 to start research on a clean energy startup called H2Ohm, which aims to capture and utilize energy created by excess pressure from water moving through pipes. The tube is guided by gravity.
They entered a climate technology accelerator in Canada called the Creative Destruction Lab, where they worked for months to perfect their plan. However, as they delved deeper into market and product research, they realized that the business would not succeed.
The duo still has to present something during demo day to prominent early-stage investors.
“We ended up pitching to over 100 investors on why they shouldn’t invest in our business,” Levac-Levey told CNBC. The answer is surprising.
Brewer recalls the warm response when people approached them to chat. One person is a potential investor.
“He said, ‘Listen, if you guys are going to shut this company down, can I hire you to find out why all my other investments have failed?’” Brewer said . “So we did that.”
During the pandemic, Brewer and Levac-Levey also began building an online network for former employees at large technology and industrial companies who were interested in shifting their careers to solve climate problems.
They are two of the eight founders of Working on climate, has now grown into an online community with tens of thousands of members on Slack. The group produces a climate career newsletter and hosts dozens of online and in-person events annually to help develop the green workforce. Brewer is board chair at Work on Climate, and Levac-Levey is vice chair.
Brewer said the group sees an influx of new members whenever there are major layoffs, especially in the tech and auto sectors. With recent cuts at Tesla and Google, Starshot partners are expecting climate tech startups to find talent more easily and new companies to be founded soon.
“People increasingly want their work to align with their values, and at the same time, there is a growing awareness of the challenge we face with the climate crisis,” Brewer said.
Levac-Levey told CNBC that Starshot is especially interested in companies that work to reduce the negative environmental impact of food and agriculture, industry and the “built environment” from hospitals, homes, office to airport and other facilities.
The company already supports entrepreneurs producing green hydrogen, such as at Ecolectro. The company also backs Mojave, a company focused on air conditioner efficiency, and Harvest, a startup that makes heat pumps more efficient and useful in homes by adding storage thermal energy next to them.
Brewer and Levac-Levey are based in the Bay Area. The company also hired Zoe Samuel, co-founder of Alphabet’s employee climate community, and Nicholas Gould, a chemical engineering PhD who previously worked on decarbonizing industrial processes at Air Products.
