What do algae and molten salts have in common?
They could save us from succumbing to a carbon-soaked world.
Did you know that over 36 billion tonnes of carbon dioxide was emitted into the atmosphere in 2021 alone?
Did you also know that Q2 2022 (April 1 - June 30) saw the highest-ever VC investment in carbon capture startups, with $841.5 million invested across 11 deals?
Introduction
What are we discussing today?
The trend: pioneering novel approaches to efficient carbon capture through the marriage of hard science research (chemistry, biology, etc.) and software expertise.
Startup Ecosystem
What are some secret startups capitalizing on this trend right now
Mantel - a seed startup out of MIT’s Department of Chemical Engineering that is pioneering the use of a fundamentally new material for carbon capture: molten salts.
Brilliant Planet (BP) - a Series A startup harnessing the power of algae as an affordable method of sequestering carbon at massive scales.
These two startups are the only VC-backed companies right now doing the work in their respective fields (i.e. algae and molten salt carbon capture). Let’s dive deeper ⬇️
Unicorn? 🦄
The real question is: are these budding startups $1 billion exit opportunities or not?
Each of the investing criteria (founding team, traction, timing and market size) will be ranked on a scale from 1 to 10, with 10/10 as the best and 1/10 as the worst.
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Mantel
🧍founding team: 9/10
Cameron Halliday (CEO) and Sean Robertson (CTO) have incredible backgrounds in chemical engineering, physics and bioenergy (both MIT PhD grads)
Danielle Colson (COO) is a leader in the energy, operations and engineering spaces with a focus on the global energy transition. Also an MIT grad.
Lacking racial diversity.
💰traction and investor signaling: 6.5/10
Quality > quantity, especially with Mantel who just launched in Jan. 2022.
Not too much press or hype around the startup, but the press they do have is impressive. Selected for Breakthrough Energy’s prestigious global fellowship program and have been featured in both Bloomberg and Business Wire.
Already raised $2M in 9 months. Led by cutting-edge venture firm including The Engine (a venture firm spun out of MIT).
🕰️ timing: 6/10
There is no better time to be building at the intersection of energy and carbon capture than now.
The rapidly evolving economics of carbon capture, both internationally and within the US, presents exciting commercialization opportunities for this technology.
Hard-tech startups are taking off 🚀
See Eikon Therapeutics, Contactile and Cape Analytics
The vast majority of climate technology startups today are developing software-only solutions. But Mantel’s deep expertise in the hard sciences and research is a unique (and key) differentiator for their long-term success.
The lack of competition is not too alarming in this case because it’s only been 9 months. However, Brilliant Planet is a different story…
📈 market size: 7.5/10
The global carbon capture, utilization, and storage (CCUS) market size is expected to grow to $3.62 billion in 2026 at a compound annual growth rate (CAGR) of 17.4%.
This means that carbon capture startups are here to stay, and the investment opportunity will only continue to grow exponentially.
However, Mantel is pioneering an entirely new industry with this broader CCUS market (molten salt carbon capture).
This niche could be a bit too narrow for rapid widespread adoption and scale which is ultimately needed for a $1B exit.
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Brilliant Planet
🧍founding team: 10/10
Raffael Jovine has a robust background in the hard sciences with a PhD in marine and environmental biology and a B.S. in molecular physics.
and Adam Taylor (CEO as of Jan 2022) provides the business expertise with a wide breadth of leadership positions at investment firms and manufacturing companies. Clearly an effective marriage of strengths and skillsets.
💰traction and investor signaling: 6/10
$12M Series A round.
Considering the company was founded 9 years ago, this number is a bit underwhelming, especially when looking at a potential $1B exit. Could imply slow growth or development.
11 investors so high signaling and interest. Seed investors didn’t re-invest in Series A which is a slight red flag for future investment rounds. But, quality of investors are very good — Union Square Ventures, Toyota Ventures…
🕰️ timing: 4.5/10
Founded in 2013, Brilliant Planet was extremely early to market and are one of the only builders in the space today in 2022.
There are a few other startups leveraging algae (see Phycobloom) to facilitate a sustainable future but BP is the only one leveraging microalgae biomass in the desert.
My only concern is that lack of competition in the market could be indicative of a serious weakness.
📈 market size: 9/10
Like Mantel, the CCUS market valuation is huge, and growing rapidly year over year.
Brilliant Planet’s solution is very scalable because there’s free sunlight and seawater. According to Jovine (Co-Founder of BP), microalgae can sequester 30 times more net carbon than trees and other land plants.
Conclusion
So what’s the verdict?
Mantel — high unicorn potential.
It’ll be interesting to see where Mantel is this time next year and if they can keep up this rapid growth.
Brilliant Planet — medium unicorn potential.
Solving important problems at an enormous scale is huge. However, the limited growth, traction and competition over 9+ years has me thinking this algae carbon capture market is not big enough just yet.
The evolution of the carbon capture markets is a major point of uncertainty across the board for CO2 removal startups. But these two are certainly at the cutting-edge — pioneering amazing solutions to this pressing global problem.