Look Out, Aerosmith...

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Happy Monday, folks.

Investors seem to think we spend quite a bit of time in we mums’ car.

Automotive tech was a big winner last month when it came to fundraising, bringing in $647.5 million. Much of this was the result of tax and funding provisions incentivizing support for the industry which kicked in as part of the Inflation Reduction Act and the Infrastructure Invest and Jobs Act.

For you gamers out there, you understand the importance of batteries. Those mitochondrion for electronics are important for Lightning McQueen, too, but these ain’t no Double A’s baby. EV batteries dominated this number, accounting for over 70% of the funding, worth $457.5 million.

Fifth Wall and Franklin Templeton must’ve been listening to Drizzy singing “Charged Up” while pressing send on Our Next Energy’s $300M Series B which accounted for nearly half of the total money.

You know what would be cooler than spending so much money on automobiles, tho? Investing $650M into green tech gondolas for urban areas to reduce the need for cars 😉 

There is a hole in the shape of a certain bank in the walls surrounding the startup kingdom. It seems that JPMorgan Chase might be looking to participate in the Hole in the Wall game show to fill this spot with its shiny new startup data platform.

The bank announced that it had purchased Alumni, a database for managing investor-portco relationships, for roughly the same valuation ($232 million) that the company had when JPM led its last raise in 2021. The platform has more than 18,000 active startups with combined valuations north of $3.6 trillion.

The dashboard makes life easy for the startup bros and sisters out there, providing comprehensive visualizations for things like where the company is banked (lol), cap table and valuation insights, and even breakdowns of the option pool. It’s like Excel, but for people that prefer to live their lives on the brink of bankruptcy.

This isn’t the first time that JPM has made pretty big investments under CEO Jamie Dimon (you can’t convince me that there wasn’t a popstar by the same name at some point…). As with many of those past expenditures, this one has also drawn some less than favorable reception from shareholders who have criticized the return this will bring them and Dimon’s decision to use Ticketmaster for his upcoming tour.

As for the bank that left the hole in the first place, it seems that we’re finally getting some ~closure~ after it was announced that First Citizens Bank is going Goodwill hunting (🤪) and purchasing $72 billion in assets for a bargain tagged $55.5B. The Oscars-level gift basket from the FDIC to sweeten the deal also includes a loan to help finance the purchase and a loss share agreement, reflecting that SVB was a sober 4 for potential buyers.

If you missed out on the first auction, don’t sweat. It’s gross, and there’s still another $90 billion under FDIC control in case you want to get a DAO together.

If your country hasn’t been dealing with a far-right political movement, you’re getting left behind.

In case you aren’t tuned into the Jerusalem Times, Israel PM Benjamin “Bibi” Netanyahu is a Dead Sea-sized Netan-yahoo. The country has been experiencing domestic turmoil over a series of political actions moving the nation even further to the right, the latest and most controversial of which was a decision to move the judiciary even further under executive rule. This makes the whole “only democracy in the Middle East” thing a bit harder to back up.

This decisions has even drawn criticism from his own Conservative supporters, including a key defense minister who was fired for speaking out. 800,000 people from across industries decided to strike, and even the nation’s schools shut down as profs and students took a break from having ChatGPT write their assignments to protest in the streets.

Why am I bringing this up? Well, like a Sweetgreen in downtown San Francisco, Israel is actually quite the tech hotspot. This status as a bustling startup ecosystem might be under threat as the disruptions to the economy from protests and growing international wariness of what is increasingly looking like an emerging autocracy might lead to a downgrade of the country’s credit rating, which would make it much harder for these companies to access credit.

The threat to the country’s legal system also makes outside investors far more hesitant to back a company when there’s no credible commitment to protection of property rights, and it might lead to much of the international capital supporting 90% of the country’s startups to go poof.

The turmoil has made Paris look tame and in doing so has actually proven effective with Bibi since announcing that the judicial reform will be delayed until he and his political opponents can reach some sort of consensus in session this summer.

My suggested solution? Just pop some corn and watch 22 Jump Street. It seems to work even in the most unlikely of situations.

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So much better than those guys over at startup striper...

Look out, Aerosmith. There’s a new Boston Metal group in town.

Steelmaking is one of the most pollutive industries in the world, accounting for 10% of global carbon emissions. It’s also not an easy one to get rid of considering all of the other industries which rely on the strong, cheap metal. S/o to the Commodore and ol’ Rockefeller for that one.

Addressing the carbon emissions of the top producers is essential if we are to tackle the climate crisis, and as such, there has been a wave of startups looking to apply their innovations in science as solutions to cleaning up this hundred billion dollar industry.

Boston Metal’s approach to the problem uses the company’s patented molten oxide electrolysis (MOE) process which removes the need for coal by instead using electricity to separate feedstock compounds like iron ore or aluminum ore into their individual elemental parts.

Won’t overwhelm you with the gritty details (mostly cause I haven’t taken science since like sophomore year of high school and don’t want to sound like an idiot), but it SEEMS to involve heating up a little of this and a little of that until boom, liquid steel which doesn’t even have to be reheated when it is ready to be used in the production process.

The technology can be used with all grades of iron ore, meaning it doesn’t even require the purest forms of the metal, and it doesn’t need tons of water or rare metals or hazardous chemicals to get the job done. End result? ❌ carbon

Though it might be attractive to industry outsiders because of its neutral environmental impact, the product is also affordable and scalable for producers, so it makes sense for the guys in top hats and long tailcoats, too.

While this green steel product is promising on its own, the company has also found alternative ways to monetize by applying the salve to the high value metal industry at its source. The mining industry is notorious for its environmental impact, primarily the waste it leaves behind.

Even more concerning is the high proportion of this disposal which actually still contains high-value metals in diluted quantities. Applying the company’s MOE tech allows these mining companies to reduce their carbon footprints and create an additional source of revenue by salvaging much of this wasted product.

Like me in high school, the company was a late bloomer, requiring a bit of time to get its footing after being founded in 2013. As of late, though, it has really begun to pick up some traction. It has been only over the last few years that big money has begun to flow into the space, something which is essential for such a capital- and research-intensive industry to grow.

In total, Boston Metal has brought in $209 million in outside investors’ money, the bulk of which came in a newsworthy $120M Series C announced earlier this year. Participating investors included the likes of ArcelorMittal, Microsoft Climate Innovation Fund (thx Bill!), and SiteGround.

Revenue has begun to scale in large part from launching the mining product. Recent estimates put last year’s number at $27.7 million. However, this doesn’t mean the company has been sitting idly by, and what it hasn’t brought in in cold hard cash, it has added to its trophy case in shiny, wooden plaques such as for being named the North American Company of the Year 2023 from the Global CleanTech 100 Awards.

Going forward, the goal is for the factories to be fully commercial by 2026, and as the Brazilian business begins to pick up, sales can be expected to soar.

Making this particularly likely is the importance of the market it is in, with the green steel industry worth $200M now and growing nearly 125% annually… That’s Ka-Chow fast.

Primary drivers of growth in the overall industry include:

• Rising energy costs and instability for steel producers made worse by the war in Ukraine

• Steelmakers (like ArcelorMittal) investing in the tech themselves

• Downstream companies looking to reduce their own carbon footprints by eliminating emissions along the supply chain

• Government pressure to speed up the green transition

With these catalysts (and massive funding) have come plenty of competitors, many of whom are attacking the problem in their own unique way.

Incumbent steelmakers are beginning to neutralize their own processes, particularly as governments like the UK are sending $2 billion “Plz” Venmos to manufacturers like British Steel and Tata Steel.

There are also other startups focused on alternative ways of reducing the footprint of the process like the larger H2 Green Steel in Sweden and smaller startups like Electra here in the US.

Finally, cover your ears Andrew Carnegie, but there are threats to steel as an industry altogether. One of the most promising is the rapidly growing 3D printing sector, one that many anticipate becoming the dominant form of construction in the coming decades.

Frankly, I don’t understand the science well enough to argue for the merits of MOE over those voodoo magics employed by these other companies. However, I can go off of the know-how of very smart people like Bill Gates and their belief in the tech, and I can take comfort in the proving ground that Brazil has come to be for its commercial efficacy.

I can also take solace in the team’s background and dedication to the research. Founded by MIT Profs Donald Sadoway and Antoine Allanore from research experience dating back to the late 1980s, Boston Metal’s keys have since been handed over, but the two founders still remain as advisors.

Taking over for Sadoway as CEO is Tadeu Carneiro who brings 40 years of executive experience in metal, in the process demonstrating his own mettle through scaling revenues, investments, and employee counts at multiple successful companies.

Serving as his Chief Scientist is Guillaume Lambotte, PhD, an expert in metallurgy and one of the company’s earliest employees. Lambotte has helped the team to scale its tech from standing out as the only non-volcano at the science fair to being a viable commercial product capable of reshaping the entire steel industry.

The rest of the team’s “About Us” page is littered with PhDs and well-known names in the space. The talent is there, and the clear belief of experts makes me think that it’s only a matter of time before current steel execs are sitting on their piles of cash, whining how they would have gotten away with it if it weren’t for those metal-ing kids.

TLDR: Boston Metal is applying more than 2 decades of MIT metallurgy research to cleaning up the highly pollutive steel industry. With recent traction aided by diversifying its product and raising significant money from leading investors like Bill Gates and incumbent producers, the talented team appears ready to take over a green steel industry doubling in size every year.

Cheers to another day,

Trey