Energy Startups Are Raking in VC Dollars

Presented by GOTO Market Institute

Morning! Wine is being made with artificial intelligence, Sam Altman is planning out several new investments, and energy startups are bringing in VC dollars hand over fist. Here’s a closer look at what’s been happening in SaaS this past week.

• Energy tech startups are still raising substantial venture capital, with over $1 billion invested in the first quarter of 2024 even as mega-rounds decline in other sectors

• OpenAI CEO Sam Altman is amassing a vast network of moonshot investments across energy, materials, and computing to realize his goal of achieving artificial general intelligence

• Vineyards and winemakers are increasingly embracing IoT sensors, AI blending tools, and other technologies to improve wine production and sustainability while keeping up with consumer demand

While Mega-rounds Become Rarer, Investors Are Flocking to Energy Startups

While mega-funding rounds for startups seem to be drying up in many sectors, energy tech companies are still bringing in staggering nine-figure investments. 

Crunchbase data reveals that through March 4, 2023, nearly 10% of tech startup mega-rounds (defined as raises over $100 million) went to companies in the energy industry working on power generation, distribution, batteries, EV charging and the like. But even as deals freeze across sectors, energy tech's share of mega-rounds has jumped to 16% in early 2024 - a more than 60% increase year-over-year.

This cash flood is being stirred up by governments who are funneling hundreds of billions in green subsidies to domestic clean energy manufacturing. Faced with those incentives, investors are rushing to back local solar, battery, EV charging, and anything energy innovation related.

In 2023, most of these mammoth energy tech raises were snatched up by Chinese solar panel and battery materials companies. But the geographic spread looks different this year. Only one Chinese firm made the mega-round cut in early 2024, with the remainder split between the U.S. and E.U. 

Experts attribute this shake-up to aggressive domestic manufacturing initiatives like the U.S.’s Inflation Reduction Act and Europe’s Green Deal. With hundreds of billions in government subsidies up for grabs, it’s no wonder investors are betting on North American and European energy tech firms racing to set up shop on their home turf.

It’s not just the locations that are diversifying either. While solar and batteries ruled the mega-round roost previously, the first 2024 tally includes everything from geothermal and green hydrogen players to e-fuels and EV charging solutions. 

The bottom line: with the climate crisis intensifying, investors seem ready to put huge sums behind technologies that can scale up renewables, electrification and sustainability.

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Sam Altman's Grand Plan for AI Is Greater than You’d Expect

Sam Altman is going all-in on artificial intelligence with a multi-billion dollar global startup shopping spree dedicated to unlocking advanced AI. But not everyone's buying into his grand plan for humanity.

Leveraging his personal fortune, estimated to be around $800 million, Altman has spent the better part of a decade building an investment empire focused on laying the groundwork for advanced AI. We’re talking hundreds of early stage companies working on transformational technologies across energy, materials, computing and even anti-aging and human enhancement.  

The breadth of Altman’s portfolio highlights his belief that artificial general intelligence (AGI) will require breakthroughs across scientific fields before it can be realized. 

From fusion energy startups like Helion that could provide abundant clean power for A.I. data centers, to a mysterious $7 trillion project to radically expand semiconductor manufacturing capacity, Altman is covering all bases. If his initial investments in Open AI weren’t evidence enough, then his partnerships with sovereign wealth funds signal the staggering scale of investment he believes the AI revolution will need.

Altman joins founder-CEOs like SpaceX’s Elon Musk who are advancing entire philosophies for humanity’s future, not just individual companies. While Musk wants to colonize Mars, Altman sees AGI as the key to “elevating humanity.”

But not everyone is convinced that remaking global industries is necessary to achieve AGI or beneficial for society. Some tech executives argue that  Altman’s worldview centers too much power and influence on Big Tech billionaires.

Only time will tell whether Altman’s grand plan pays off or goes down as a flight of fancy. But with AI progressing rapidly, we’ve probably only reached the tip of the iceberg.

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Vineyards Are Embracing AI and IoT for Better, Tastier Wine

Winemakers are dropping some serious coin on IoT sensors and AI tools in hopes of tackling declining consumer demand and an increasingly challenging climate.

Across vineyards in California, Italy and beyond, connected sensors are being embedded in fields to track conditions like weather patterns, soil moisture and grape maturity. By visualizing this data, growers can optimize irrigation, predict harvest times more accurately and intervene to treat disease or pests. The sensors both improve sustainability through better resource management and boost yields of quality grapes.

Winemakers are also tapping AI tools to create tailored wine blends aligned with shifting consumer palates. According to Alexandre Remy, the managing partner and winemaker at Atlas Wine Co., the drop in popularity of wine might be due to the complexity of the market. In his words, finding ways to make wine more approachable could help drive growth.

Now, softwares like Tastry’s CompuBlend is using data on wine chemistry and drinker preferences to determine recipes that are both balanced and commercially viable.

Between appeals from sustainability-focused consumers and those overwhelmed by choices, winemakers like Remy are feeling increasing pressure to leverage technology in their production. If anything, this story shows just how rapidly AI is changing the way mature industries operate — and vintners are no exception.

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Parting Thoughts

Well, that’s the tech news for this week. Hit reply and let us know — did you learn something from today’s newsletter?

Until next time!