🤔 Is Y Combinator the Y Combinator of climate tech?
Vol 91
This newsletter aims to separate the signal from the noise for investment in all things sustainable transportation: Electrification, mode shift, active and public transit, and mobility aggregation, across both people and goods movement.
This week’s Deep Dive is on Y Combinator’s commitment to climate tech. Is the legendary firm ready to be home to the next generation of climate companies in the way that it supported breakouts like Instacart, Reddit, and Airbnb?
🌱STARTUP WATCH: Sustainable mobility startups (pre-seed or seed) to keep an eye on
AndrenaM (California, USA): Autonomous solutions for maritime
Clear Skies Hydrogen (California, USA): Hydrogen for heavy-duty transportation
Electroflow Technologies (California, USA): Cathode-ready lithium brine
Kabisa (Rwanda): Integrated EV charging network and mobility provider
Kinetic Core (Colorado, USA): Kinetic power storage (flywheel) for EV charging load management
Ocane (United Kingdom): Ocean-derived synthetic fuels
Revvit (Massachusetts, USA): Low-cost L2 charging solution
Zeno Earth (Kenya): A mobile energy and transportation as a service for East Africa, which just exited stealth with a $9.5M round
💰FUNDING: Capital raises from startups previously featured in Startup Watch
Kofa (Vol 8) secured a 3.8M GBP grant from Shell Foundation and the UK Government
Zevero (Vol 18) raised a $7M Seed round from Spiral Capital and East Ventures
HGen (Vol 29) raised a $5M Seed round from Seven Seven Six, Founders Fund, and Fontinalis
Safire (Vol 52) raised an $8M Pre-Series A round led by Canaan, alongside Correlation Ventures, Higher Life Ventures, Automotive Ventures, MaC Venture Capital, and others
KleanDrive (formerly Kleanbus, Vol 56) raised 1M GBP from corporate investors
Ayrton Energy (Vol 84) raised a $6.8M Seed round led by Clean Energy Ventures, along with SOSV, Antares Ventures, and others
📰QUICK HITS: Notable news from the last two weeks
👩🏽⚖️Government, Policies & Cities
🇳🇱 The Hague became the first city in the world to ban public ads for products and services related to fossil fuels, cruise ships, and aviation. Anyone remember cigarette billboards back in the day?
💨 Scammers in New York City are bilking Citibike out of thousands. As Charlie Munger said, “Show me the incentive and I'll show you the outcome”.
📀 The US government may ban cars with digital links to China starting in 2027. For a context, see the Deep Dive The Next Cold War is Already Here.
🚶♀️The US National Highway Transportation Administration (NHTSA) is proposing to crash test vehicles for pedestrian injury. Decades overdue, but a very good first step to reducing America’s car bloat.
🚲 The US government may close a trade loophole that allows e-bikes to be imported from China without proper safety certification. Shein and Temu are two of the biggest offenders.
🔬Markets & Research
↘️ Emissions in California fell 2.4% in 2022. Transportation electrification was the biggest factor.
↗️ According to Streetlight Data, many Americans are driving more than ever, even with hybrid work. NYC congestion is up 14%, another reason to revisit congestion pricing.
☠️ The minivan is basically dead. Alas, it’s been replaced by the less efficient SUV and crossover.
🛒 A study from MIT quantifies how EV charging stations increase spending at nearby businesses. Now to convince retailers to put in more EV charging…
🇪🇺 The ICCT looked at emissions compliance in the European car market. Nobody’s at target, but the gap is notable for BMW, Mercedes, and Stellantis.
🚚 BNEF has released an overview of zero-emissions commercial vehicles. For market adoption, China and Nordics are way ahead of the rest.
📊 How long are EV batteries lasting? According to Geotab, much longer than we thought they would.
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🏭 Corporates & Later Stage
♾️ Chinese battery giant CATL is now shipping batteries with a 600,000-mile warranty. Its 15-year warranty is almost twice Tesla’s…
🏍️ Is China’s BYD getting ready to launch an e-motorcycle? Stranger things have happened.
🔁 Nio now has 4,000 charging stations in China. Plus 2,500 battery swap stations. That’s massive scale.
🇧🇪 Nio denies it might buy VW’s Audi plant in Brussels. Given the EU import tariffs on Chinese-built cars, this factory may end up under Chinese ownership sooner rather than later.
📲GM EV owners have access to the Tesla supercharger network. Better late than never.
🤳🏽 Android Auto now supports the Tesla charging standard in North America. Tesla doesn’t support Android Auto, but this is a boon to non-Tesla owners using Tesla’s supercharger network.
🤝GM and Hyundai announced a partnership, including on electric and hydrogen. While partnerships like this are hard, Hyundai’s ace is its deep connection to South Korea’s battery prowess.
🔌 Smart Freight Center has launched a consortium to build a heavy-duty charging corridor from LA to El Paso, Texas. Notably, Tesla is not on the list of partners.
↘️ Toyota is cutting 2026 global EV production by a third. The challenge for all global automakers is that BYD and others aren’t slowing down.
🚲 Bicycle Transit Systems, which runs bikeshare programs in, LA, Philly, and Las Vegas, has acquired Trek’s Bcycle bikeshare business, which runs in 10 cities. This helps compete with Lyft’s bikeshare business.
👩🏽⚖️The founder and CEO of Gogoro, the battery-swap darling, has resigned amid fraud allegations. Its stock has fallen over 95% since going public in 2022.
🤝 Alaska Airlines and Hawaiian Airlines completed their merger. Both airlines have been on the more aggressive side in terms of decarbonization.
🐣 Startups & Early Stage
🚕 Juice Serve (Startup to Watch Vol 33) has partnered with Revel on automated charging. An important step in making charging less cumbersome.
📉 Swedish battery unicorn Northvolt desperately needs a bailout, but no one is stepping up. Major shareholder VW, facing the unprecedented prospect of factory closures in Germany, is unlikely to inject additional capital.
♻️ Seaya Andromeda, a €300M European growth stage climate fund, acquired a majority stake in Zyclora / Bike Ocasión, Spain's leading refurbished bicycle retailer. They compete with Upway, the Sequoia-backed French startup who raised a 30M EUR Series B just last year.
📱The Transit app now allows user to prioritize biking as their first mode of transit. You love to see it.
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DEEP DIVE: Y Combinator…
Just over two years ago, Y Combinator (YC) released a public request for startups (RFS) focused on climate. This included over 100 specific “problem & ideas” spaces that the legendary firm was excited to invest in, covering everything from technology advancements (e.g., battery technology and chemistry that reduces the need for strategic minerals) to business model innovation (e.g., smart charging software).
An RFS is noteworthy, as it signals that the firm has been thinking deeply about a specific space and hasn’t yet found much of what it’s looking for.
While the public declaration was noteworthy, it hasn’t driven an increase in YC activity in the climate space, both on a relative and absolute basis. Proportionally, YC climate activity is now back to baseline levels from a decade ago.
The ‘21-‘22 period marked a high point in the volume of startups admitted to YC, with this year’s class about 20% smaller than its ‘22 counterpart. As a result, the total number of climate startups has fallen even more dramatically, from 36 in ‘22 to 16 in ‘24.
(Note: This analysis relies on YC’s tagging of climate. YC alum Upfront, for example, was tagged in their database as “marketplace”, “consumer”, “home-services” and “AI-assistant.” Incidentally, Upfront was listed in this newsletter’s Startups to watch (Vol 55) and announced last week that it was closing).
Alas, it’s not as if YC is alone in this. Late ‘22 was when numbers were just about to confirm our suspicions that climate funding was entering a clear downturn. Still, given the firm’s outsized impact, it would be nice to see them doubling down on what will surely be some of the most consequential businesses of the next decade.
In the meantime, for the ~30 startups from ‘23 and ‘24, let’s hope they make up in quality what they lack in quantity.
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