2022 2nd Quarter Review
We are pleased to bring you an update on our Q2 activities. Keep reading to see news on our most recent investments and portfolio companies, our latest Science Engine category focused on Mycology, and news on our content and community activation efforts including Beta Taster sessions and the launch of Field.Notes. You can begin investing with us anytime by clicking here.
A Letter From Our Founders
It’s been a tumultuous three months since our last update.
Historic inflation, aggressive monetary intervention, a looming recession, and rising food and energy insecurity have weakened political will for dramatic climate action. Meanwhile, summer’s intense heat and wildfires remind us what global warming will continue to look like for the next thirty years.
The situation is dire, but there is reason to be optimistic despite all of this darkness – and that’s the work that we’re doing together. The commitment to continued innovation and investment from communities like ours, and from our existing portfolio companies, remains unwavering.
March’s swift and dramatic macroeconomic changes temporarily froze the fundraising plans of many companies, as they made efforts to conserve cash, revise budgets, and adjust to new expectations. As things settle into a “new normal” the pace of investment activity is roaring back. We see incredible teams coming to market with tempered pricing expectations, and ready to move ahead with fundraising. We are processing a deluge of great companies in an effort to find investments we like best.
The talent assembled in these companies and in our portfolio, and the progress they are making in their respective industries, are beacons of hope for a more sustainable future. Over the next several weeks and months, our companies will announce news of production facilities coming online, the launch of new products, and the expansion of their reach. We will amplify their progress with content and community engagement, and we invite you to do the same.
Developing food alternatives, energy efficiency services, and enabling electrification, along with creating new models for resource preservation, carbon removal, energy production, and economic and environmental justice are at the heart of FootPrint mission.
We’ve written about the impact alternative foods can have on the climate, with some recent studies from leading consulting groups indicating if alternative proteins continue on their present adoption curve, they’ll reduce nearly 1 gigaton of carbon dioxide emissions equivalents by 2030. It’s the equivalent of decarbonizing nearly all of the global aviation industry.
Meanwhile, technologies like Turntide’s energy efficient engine, Lyten’s batteries, and Span.io’s home energy management panels, along with energy optimizing services from Sealed and Cove.tool, are directly reducing demand for fossil fuels in the built environment and in our transportation systems.
The investments you’re making alongside co-investors like Breakthrough Energy Ventures, Lowercarbon Capital, Fifth Wall Ventures, Collaborative Fund, Union Square Ventures, Khosla Ventures will enable these industries to transform.
And as these industries transform, our companies will outperform and deliver healthy shareholder returns. We hope you continue to join us in this important work.
Robert, Jon, Rachel, and Steve
Our Investment Strategy
We completed 2 new investments in the second quarter of 2022, announcing our investments in Crusoe Energy, as well as in our previously undisclosed Q1 investments in Sealed and Motif.
We also made an investment in an alternative protein startup that is yet unannounced (except among members of our Syndicate). The company that produces a plant-based steak that looks, sizzles and tastes like the real thing - we couldn’t believe it either and can’t wait to tell you about it soon.
Crusoe Energy leverages what it calls “broken links in energy supply and demand” by using wasted energy from gas flaring and - in the future - excess electricity produced on wind farms to power server centers, initially for crypto mining and soon to offer cloud computing services.
>5Tcf of gas was flared globally in 2020, the equivalent of $82B of stranded energy and enough to power the BTC network 8 times.
Crusoe has established itself as the clear leader in leveraging flared gas for server centers. The company benefits from extremely low cost energy for its server center operations - leading to a significantly lower OPEX per BTC mined compared to established companies in the space.
We believe that in the mid to long term, crypto will behave similar to cyclical commodity markets with high volatility (and therefore times of severe bear markets like we are seeing right now). Long term winners in a market like this will be companies with low-cost producer advantages and with diversified revenue (away from only crypto) who can survive market downturns. Crusoe Energy checks both of those boxes. We also put real thought into the effect of a steep downturn in the price of bitcoin on the investment. We underwrote this investment when the price of BTC was approximately $40,000. It is currently around $22,000. At the time of the underwriting, we determined that a reduction in the price to BTC into the ~$15-25K would actually benefit the company. Why? Because Crusoe operates at such low energy costs, a reduction in the price of BTC would flush out miners who operate at higher energy costs and are not able to sustain their operations at lower cost of BTC. So long as the price of BTC stays in the mid to high single digit thousands, Crusoe can continue to operate profitably.
A big question for us - and many of our followers - was whether Crusoe will enable otherwise unprofitable oil wells to stay in business. Analyses showed that the revenue provided by Crusoe makes up about 0.1% of total oil well revenues, debunking that fear quickly. In terms of emissions, Crusoe’s technology reduces methane emissions by 98% and CO2 emissions by 63%, a massive climate impact.
FootPrint Coalition invested in Crusoe’s $350M Series C out of our late stage fund. The deal was led by G2 Venture Partners with participation from Valor Equity Partners, Lowercarbon Capital, and Bain Capital Ventures among others. With additional backing from Oman Investment Authority and Mubadala, Crusoe announced its intention to grow operations into Abu Dhabi and Oman.
Invest in our Rolling Funds
We offer an early-stage fund for companies under $5M in revenues, and a late-stage fund for companies with over $5M in revenues. We close a new fund each quarter, with a one-year drawdown period and a 10-year life.
Investors in our funds participate in all our investments during the period of their subscription. Additionally, investors in our rolling funds receive a priority allocation in our Syndicates.
Back our Syndicate
Signing up is free. Once approved, we will notify you about investments that have capacity for co-investment and invite you to join a Syndicate to invest in a particular company.
We will share our investment analysis with you so that you can make a timely decision. We will monitor the investment over its life and report regularly on progress at the company.
Motif FoodWorks is the food focused spin-out out of Ginkgo Bioworks, a leading synthetic biology company. Together with Ginkgo and a number of other R&D partners, Motif has built a platform to discover, develop and produce novel ingredients that can significantly improve the taste, texture and appearance of alternative protein products (like heme has done in plant-based burgers).
The market for alternative proteins is growing rapidly and is projected to continue to do so for decades to come (projected market size for alt meat and dairy are $270B and $140B by 2040 respectively). Most of this growth and hype has been driven by newcomers like Impossible Foods and Beyond Meat while large CPG companies have struggled to keep up from a product development perspective and are losing market share.
These companies are increasingly interested in external support to improve their product offerings - knowing that their core strengths are in efficient supply chains and wide retail networks, not in the biotech-heavy R&D capabilities needed to develop the ingredients Motif can supply. The same is true for an increasing number of new brands entering the plant-based market whose main focus is on branding and marketing.
Motif recently released its first two products - Hemami and Appetex - focused on improving taste and texture of plant-based meat products and has a full pipeline of other high value ingredients. The company is well positioned to become the key developer & supplier of innovative ingredients that enable any CPG company to go to market with plant-based food products that are best-in-class in taste and texture.
It is important to note that Motif is currently engaged in a lawsuit with Impossible Foods regarding a potential infringement of IP around heme.
FootPrint Coalition invested in Motif’s $226M Series B, which had closed last year, out of our early stage fund. The round was co-led by OTPP and Blackrock with Viking Global, Breakthrough Energy Ventures and General Atlantic participating among others.
Our portfolio company Sealed successfully raised its Series B1, a follow-on financing that had been pre-negotiated during the company’s Series B last year, after hitting a number of key milestones.
Sealed provides home energy efficiency upgrades “free” to consumers, by capturing consumer energy savings over a 20-year contract, only if they actually save energy. Insulating and electrifying heating systems in single family homes is an enormous market opportunity. Sealed has made this process easy by extending a successful playbook out of home solar installers. Sealed has created a simple one-stop service, covering upfront costs, coordinating all of the work, and arranging turnkey financing.
At the backend, Sealed is automating customer acquisition, lead qualification, customer onboarding, contractor onboarding, and customer service.
Sealed is the leading player addressing this market, and now has a replicable model with a fast-growing geographic footprint. We also believe that Sealed’s business model will be resilient to downward economic pressure, that their electrification solutions will be financially attractive in the face of elevated petroleum prices, and that with significant headroom, their financing will continue to be attractive in the face of rising interest rates.
Despite facing multiple challenges in 2021 - primarily supply chain constraints and a tight talent market for sales people - the company hit the metrics set in our investment base case. Sealed successfully expanded to NJ, CT and PA as planned and expanded to IL in March 2022.
FootPrint Coalition invested in Sealed’s $29.5M Series B1 out of our late stage fund. The round was led by Series B lead Fifth Wall who - like us - exercised its full pro rata of this financing.
Early Stage Fund
Within our Early Stage Fund, which focuses on pre-revenue climate tech companies, we made one new investment in Q2 2022, which has not been officially announced yet.
The speed at which our existing portfolio companies grow and report progress continues to amaze us - sometimes it is hard even for us to keep up!
Now that we can finally share the news of our investment in Motif, we are also excited to talk about the launch of their first two ingredients - Hemami and Appetex - designed to dramatically alter the rich meaty taste, appearance and texture of plant-based protein products.
Nobell was named one of Fast Company’s World Changing Ideas and Magi Richani, Nobell’s founder and CEO, made the MIT 35 under 35 list.
Our portfolio company Turntide hit unicorn status after its latest 80M funding round which brought on new investors including OGCI Climate Investments and British investor SDCL Energy Efficiency Income Trust.
The company also launched Turntide Electrification, a suite of battery and powertrain components to decarbonize commercial vehicles.
Thanks to a recently disclosed investment from the Oman Investment Authority, Crusoe Energy is taking its emission-fighting services to the Middle East, expecting to launch its first pilot by the end of this year or early 2023.
Ÿnsect got a big boost in Europe as mealworms received the green light from the European Food Safety Authority for human consumption.
Aspiration has struck a deal with CAA to provide its climate impact solutions to a range of corporate, sports and entertainment industry brands.
Arcadia Earth, one of our earliest pre-fund investments, received high praise in Las Vegas Weekly naming their local installation “best educational attraction”.
Whisper Aero conducted a demo day showcasing its technology advancements and its plans for scaling. The videos of how its propulsion system and drone perform are quite impressive, we hope we can show you more later!
Late Stage Fund
Our Late Stage Fund, which invests in companies that already have revenue traction, made one investment in Q2 2022 into Crusoe Energy.