Shuheng Li

Recent high-profile bankruptcies in climate tech offer a stark reminder of the challenges inherent in scaling transformative technologies. By studying the stories of companies like Northvolt, Moxion Power, Ambri, SunPower Corporation, and Swell Energy, we can uncover critical lessons about what drives success—and what pitfalls to avoid. See my analysis on each below! Sectors like clean energy infrastructure demand innovative financing strategies, including creative deal structuring and risk-sharing mechanisms, to manage their inherent capital intensity and complexity. Investors who embrace these shifts will shape the next wave of transformative industries, while those clinging to outdated models will fall behind. Forward looking strategies should be focused on: proven operational excellence, strategic / measured scaling, regulatory resilience, and post-ZIRP financial discipline. Read below to go deeper. #ClimateTech #CleanTech #Decarbonization #Bankruptcy #Northvolt #Moxion #Ambri #SunPower #Swell

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Surging energy demand represents one of the most significant disruptions to the status quo of the US’ energy system. However, so many articles on this topic stop short before offering answers. We're facing an energy dilemma - we need energy now, we need energy that supports a clean economy, and we need energy round-the-clock. Unfortunately, there’s not a great option to solve this today. 👴 Gas Infrastructure – Immediate, but a step back into the past 👶 Clean Firm – Novel, but too nascent and will take time ⏰ Large-Scale Renewables – Vital, but not round-the clock capacity 👯 DERs – The future, but needs to work on coordination 🐘 Microgrid – Clever, but need needs to play big 🔋Ultimately, we need batteries. All energy is equal, but some types of energy are more equal than others. Will be digging deep into the battery space these next few weeks. Stay tuned! Equal Ventures Rick Zullo

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In the past month, Infinium and Twelve raised a total of $1.7B for Sustainable Aviation Fuel (SAF) production from Brookfield Asset Management and TPG. Yet more broadly, the SAF industry continues to grapple with setbacks and challenges. eSAF is emerging as the leading drop-in solution for decarbonizing aviation. The skeptic’s strongest argument against SAF is the green premium. Airlines are low margin businesses, and even a 50% increase in fuel costs would bankrupt most airline businesses. Despite the 300% green premium, the aviation biofuels market is over $100B today and growing. Demand driven by regulation will grow (especially in the EU). Airlines (with corporate partners) are willing to sign major offtake agreements. Blending expensive SAF into 5% of airline fuels by 2030 is a much smaller cost increase, palatable to airlines. A good SAF investment does not require 100% SAF anytime soon. Capturing just a 5% eSAF blend is enough for great project returns and incredible start-up exit opportunities. Legacy SAF players that scaled before 2021 will continue to struggle due to reliance on less efficient, more expensive first-generation biofuels. Investors should prioritize emerging eSAF projects with contracted offtake agreements, stable feedstock prices, and sales in markets backed by strong regulatory support.

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It’s so obvious what’s happening. Lines companies and regulators need to get out of the way (and react much faster than they are) to let the flow accelerate. https://lnkd.in/g9k-z-v7

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Over the last year I've been digging into the Inflation Reduction Act (IRA) - arguably the most significant law ever passed for energy transition globally. The IRA is complicated, but it represents $1T+ of federal funding for clean technologies. Today I'm proud to announce the launch of Giraffe Financial - a business focused on helping organizations of all types take advantage of IRA incentives. Our theory of change is that while dealing with the IRS can be challenging, getting IRA tax credits doesn't have to be. Giraffe helps any organization deploying electric vehicles, charging infrastructure, renewable energy, or energy storage access IRA funding. We streamline the process of determining eligibility, ensuring compliance, and completing IRS paperwork. Please take a look at our press release (https://lnkd.in/eu-V59su), visit our website (https://giraffe.financial/) and email me directly with any questions or interest (jason@giraffe.financial). I'd also like to take this opportunity to thank the incredible ecosystem of partners and investors that made this all possible: Skyview Ventures, Momentum (BuildMomentum.io), Andy K., Shawn Garvey, Matt Hart, Wallace Kyle Jr., MBA, Homer Robinson, Oktay Kurbanov, Alexander Scammon, Steven Eisenberg, Lewis Wagner, Sean Carney, Michael Greten, Jonathan Burnston, Tyler Lancaster, Skip Dise, Titiaan Palazzi, Sarah Valdovinos, Jordan Ramer, Richard Matsui, Bill Van Amburg, Dedrick Roper #InflationReductionAct, #IRA, #TaxCredits, #RenewableEnergy, #EVs, #EVCharging, #emobility, #electric, #solar, #electricvehicles

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Fund manager GP stake investments are one of the most active strategies in private markets with limited partners across the globe committing to GP stakes funds, and fund managers selling stakes to such fund managers, with almost every manager of decent quality entertaining such discussions. As long-standing GP stake and seeding investors, we have experienced several pros and cons which we can discuss later, but this is great data shared by Ed Stubbings and created by leading private capital markets advisor Houlihan Lokey listing GP stakes deals over the past 1 year. More deals to come and I would look forward to catching up with Houlihan Lokey on the market. Thank you for the insights! #gpstakes #alternativeassets #fundmanagers #capitalmarkets #data #fundmanagers #privatemarkets #privateequity #limitedpartners

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Here’s the next post about Helmer’s 7 Powers.👇 Power #2 - Cornered Resource A company has a Cornered Resource when it has preferential access to a coveted resource that independently enhances value. To qualify as a Cornered Resource, the asset must pass several screening tests, including: ✅ finding out the real source of Power (e.g. discovery process of acquiring a coveted resource rather than the acquisition of the resource) ✅ non-arbitraged (the price paid does not exceed the additional profit) ✅ transferable (it could create the same returns at another company) ✅ ongoing (the resource creates benefits over a long period), and ✅ sufficient (the resource must be enough to create continued differential returns). The more obvious type of Cornered Resource is a patent. The pharmaceutical industry thrives on holding extremely valuable drug patents which they can exploit to the tune of billions over decades. Nvidia’s power growth is a great illustration of capturing value through Cornered Resources. One example is their acquisition of Mellanox, a supplier of networking technology, in 2019 for $7bn which allows Nvidia to optimise the performance of its network of chips in a way competitors can’t match. 🤔 What’s your Cornered Resource? 👀 Keep your eyes peeled for Power #3 in my next post on Helmer’s 7 powers. 📑 Read more on this below (linked in the comments). #privateequity #venturecapital #PE #VC #RaisingCapital

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Goldman Sachs recently published a report on falling Lithium Ion battery prices. They estimate the "EV market could achieve cost parity, without subsidies, with internal combustion engine (ICE) vehicles around the middle of this decade on a total-cost-of-ownership basis." Despite the buzz around emerging technologies like solid-state and sodium-ion batteries, lithium-ion continues to dominate the energy storage landscape. According to GS' research here's why: 1. Established Supply Chain: Lithium-ion benefits from a mature, efficient supply chain built over decades. 2. Market Concentration: Just five companies control nearly 80% of the market share, each with 20+ years of industry experience. 3. R&D Advantage: These leaders have intensified their R&D spending in recent years, widening the gap with newcomers. 4. Manufacturing Efficiency: New entrants struggle to achieve the yield and cost structure of established players. 5. Skilled Labor Shortage: The industry faces challenges in finding experienced workers, favoring established companies. 6. Economic Pressures: A cyclical downturn is making it difficult for new technologies to gain a foothold. 7. Rapidly Falling Prices: The cost of lithium-ion batteries continues to decrease, further solidifying their market position. This price reduction is expected to accelerate EV adoption in the coming years. While innovations like solid-state batteries show promise, they face an uphill battle against the lithium-ion juggernaut. The entrenched players' decades of experience, economies of scale, and continued innovation create a formidable barrier to entry. Looking ahead, GS expects a strong resurgence in EV demand around 2026 as battery prices continue to fall, potentially reaching total cost of ownership parity with ICE vehicles in markets like the US. This trend is likely to further cement lithium-ion's position in the market. You can read the whole article here: https://lnkd.in/gtQnHsr5 #Lithium #BatteryTech #EVs #EnergyStorage #MarketTrends

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My colleague, Raj Agrawal, is out with his latest #Infrastructure Market Review for KKR. “Digitalization, the energy transition, and the digital power problem are massive challenges that require scaled capital and deep sector expertise to solve, but also present a tremendous investment opportunity to those with the ability to solve them,” he writes. He dives into these investment themes, areas of opportunity and our risk-based approach to investing 👉 https://go.kkr.com/4hXFIn1

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Last week Peak Energy announced its $55M oversubscribed series A, which Xora Innovation led, joined by lead seed investor Eclipse (Greg Reichow, Ryan Gibson), as well as TDK Ventures (Anil Achyuta), TechEnergy Ventures (Alejandro Solé), Doral Energy-Tech Ventures (Roee Furman), Lachy Groom, and Tishman Speyer (David Aron). Special thanks to 🌱🤝🌍 Anil Achyuta for the original introduction.   Peak is commercializing a new standard in grid-scale energy storage systems based on sodium-ion batteries. Peak’s market is benefiting from the twin tailwinds of renewables and AI, and the company has just the right founding team to scale at "ludicrous speed".   Landon Mossburg, Co-Founder and CEO, is one of the most phenomenal team builders we have had the privilege of backing. He brings deep experience in building battery gigafactories from his prior role as Chief Automation Officer of Northvolt, where he didn’t shy away from sleeping on factory floors for months in Northern Europe.   We have a special place in our hearts for entrepreneurs who have the grit to spend 10 years+ building deep tech startups from the foundational stage to commercialization. Cameron Dales, Co-Founder, President and Chief Commercial Officer, has done it not only once, but twice, at Symyx Technologies and Enovix (current market cap $2.65B).   Liam O'Connor O’Connor, Co-Founder and COO, previously scaled major portions of Tesla’s and Apple’s supply chains, flying over 500,000 miles a year when required. Liam has a deep understanding of what it takes to build resilient supply chains in hypergrowth mode, having previously scaled from <$5B to $40B in spend over a matter of a few years.   The climate tech sector is in need of more entrepreneurs who truly understand what building on a massive industrial scale means. We couldn’t be more excited that Landon, Cam and Liam have decided to apply their talents to enabling grid-scale energy storage.

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As the IPO window remains shut and other paths to liquidity (buyout and M&A) remain compressed, the Cerebras Systems S-1 filing is a cautious welcome sign for the venture capital asset class. As the first "pure play" generative AI company to go public since ChatGPT's release, this marks what could the beginning of a new technology IPO wave. The company is making the bold attempt to take NVIDIA head on: ✅ Cerebras has developed a novel wafer-scale AI chip that is 57x larger than a GPU with 7,000x the on-chip memory  📈 Revenue grew a an incredible 1,122% YoY to $70M in latest quarter 💰 Blue-chip technology investors including Benchmark, Coatue, and Altimeter But the S-1 filing also reveals some notable challenges and risks: 🚩 83% of revenue came from a single customer in 2023 🗳️ Possible CFIUS scrutiny over their relationship with an Emirati company 🧑‍💼 CEO named in prior SEC enforcement action in early 2000s We will continue to keep an eye out for more details in the coming months around IPO pricing and the company’s regulatory squabbles, but in the meantime, please enjoy the full essay below.

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In 2022, the US chose to support the bond market instead of the energy market due to the breakdown of the system caused by Russia's invasion of Ukraine and sanctions. This led to energy importing creditors like Japan, China, Germany, and South Korea entering current account deficit positions. This led to trade deficits, causing currency collapse. To defend their currency, countries like Japan used Treasury bonds to buy Yen. However, this led to a perfect 0.95 correlation between the Yen dollar cross rate and the 10year treasury yield. This led to the system being brought to its knees, with oil prices increasing and treasuries running out. To get oil back down, either make peace with Russia and pull out of Ukraine, or run down the SPR.

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Fundraising is hard. For startups, it’s a challenge—but for GPs raising their first fund, it’s even harder. Many LPs are capital allocators operating multi-asset investment strategies. Today, GPs not only need to pitch their own fund and strategy, but also make the case for investing in the VC asset class itself. A GP who recently closed their first fund shared an interesting benchmark with me: emerging managers should aim to build 1,000+ LP connections when raising. This is why at Focal, we built Deploy - which we want to be the de-facto place for GPs to meet the right LPs. If you're a GP looking to raise, pre-register in the comments below!

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Does money behave like oil, water, or hydrogen? Given changes in tax and economic conditions, It will likely flow down the path of least resistance from the source of financial pressure. It can be used as a combustible, stable fuel for economic growth through investment, research, and hiring. Finally, in large enough quantities, it can create reactions that can theoretically power entire cities. Conversely, if enough of it is called back, loans default, and derivatives are triggered, leading to a rapid change in value. It can trigger the equivalent of a thermonuclear explosion or, at a large enough scale, a star collapsing in on itself (a wipeout of an entire financial system). What's interesting about money is it can be all these things, depending on when you decide to measure it and where you find it. Traditional economics treats money like a system of account, but I think it behaves more like a system driver, in a black box model. What do you think? #money #finance #economics

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Data from the International Energy Agency (IEA) illustrates the current "readiness" of #ClimateTechs + their potential impact on carbon reduction. As shown, many techs are at an early stage of being able to have a material impact. Concerningly, some tech funds recently returned capital back to investors recently + closed their funds - citing inability to fund capital intensive techs, found in areas like ClimateTech. This in part may be contributing to the $2 trillion shortfall in ClimateTech, that Deloitte estimates. What this may mean for the future? - The migration of LPs to global, super VC funds within ClimateTech, given the large capital pools needed to fund tech development - Greater specialization from smaller funds, energizing more niche elements of the ClimateTech market - but also altering their / LP's risk profile - A greater role to be played by debt financing in funding growth entities at an earlier stage - impacting cashflow dynamics Will be an interesting space to watch moving forward. We at The Proptech Connection are constantly working with all parts of the Proptech ecosystem. From the leading LPs, funds, techs and adopters in market, providing an independent view. Reach out to us today to find out how we can help. #InvestorTrends #Strategy #Global Ivo van Breukelen Stuart Daun Kiki C. Ethan Ward

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The private equity value creation strategy you put in place two years ago may need a new approach to cash management, cost takeout and talent as artificial intelligence and ESG drive disruption. Read insights on ways to approach these five value creation levers in our latest article:  #privateequity #PEstrategy https://lnkd.in/eSD_qF72

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How do you solve for the unknown in a transaction? Here is a very short summary on some of the ways we are using our Data Analytics to be more effective due diligence advisors.

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📈📈📈 In the midst of the last month's Fed rate cut (or cuts, if the Fed's own forecasts play out), central banks across Southeast Asia are already reducing rates or expected to. 🧐 What does this mean for the regional operating landscape, especially with the US$1tn China stimulus package coming into play? 📊 How should PE investors anticipate opportunities for entry and capital return with potentially cheaper and more accessible financing available? 👇 In my latest article I talk about the key themes I believe will play out in this lower-rate environment that GPs and LPs can look forward to Calvin Ng Shane Shi Christopher Chan Andrew Nai #privateequity #markets #southeastasia #investing

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