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Tuesday, July 16, 2024

A Wave of Startups Is Tackling Cow Burps and Other Climate Issues

Cows burp hundreds of times every day. As a quirk of their digestive system, they release tons of methane into the atmosphere, making them among the major contributors to greenhouse gas emissions. For decades, environmentalists have called on consumers to eat less beef as a way of curbing the cattle industry’s impact on the planet. Alex Brown has a different idea: Make the cows burp less.

Brown, the cofounder and CEO of the startup Alga Biosciences, is developing a feed additive that alters cows’ digestion. His startup builds on earlier science, which found that feeding cattle a particular kind of algae—Asparagopsis taxiformis, to be specific—could reduce their methane burps by 80 percent or more. Asparagopsis taxiformis is costly to grow at scale, so Brown’s company is working on a way to chemically alter kelp to make a cheap equivalent. The company is also pitching itself as a cost-saving solution for farmers: Cows retain more nutrients when they eat the kelp, Brown says, so farmers can feed them about 20 percent less.

Brown is one of the 400 or so founders presenting ideas at Y Combinator (YC)’s demo days this week. The event, hosted twice a year by the startup accelerator, gives its founders the chance to sell their ideas to angel investors and venture capitalists. (This year’s demo days were held on Zoom, a format YC has kept since the pandemic.) Many of the founders this week came with big ideas about neo-banks and financial technology for emerging markets. But a record 31 of them are building products and services to save the planet. YC has funded 90 companies addressing climate change since 2010; more than a third of those are in its current class.

Some of those startups are ambitious moonshots, like a company building giant machines to suck carbon dioxide straight out of the air. Others are leveraging software to maximize the energy output of solar farms, or to help companies reduce their carbon footprint. “It wasn't clear to many founders three or four years ago that investors would fund these kinds of ideas,” says Gustaf Alströmer, the YC group partner who leads climate efforts. “Now we know for sure it is.” 

These companies are trying to break into a growing trend: Last year, US-based climate tech startups raised more than $40 billion in venture capital—a 100-fold increase from 2013.

The interest in climate tech has surged for a couple of reasons. Investors have started to see returns from earlier clean-tech successes—like electric vehicle maker Rivian—creating an appetite for more of them. The political will to decarbonize has also become stronger over the past few years. Leaders in the United States and Europe have called for drastic reductions in greenhouse gas emissions by 2030, creating a market opportunity for startups that want to build technology to make it possible.

Another big draw is the founders. For decades, clean tech has been led by people working in the sciences, who have brought academic research into the business world. But many of the climate tech founders in YC come from software companies like Amazon, Google, and Airbnb.

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“There’s a real belief that we can move at a pace that’s more similar to a software company,” says Brown, who worked at a data startup before starting Alga Biosciences. (His cofounders are both chemists.) Researchers have only just started studying the effect of algae in cattle feed, but Brown’s startup plans to move much faster by feeding its product to 15,000 cows commercially by this fall.

That pace might appeal to investors, but researchers caution that science moves slowly for a reason. Most cattle feed additives with algae haven’t yet “proven their claims to reduce emissions across the beef production life cycle and meanwhile may lead to incentivizing further beef production,” says Matthew Hayek, an assistant professor of environmental studies at NYU.

In an op-ed for WIRED, Hayek argued that such “technological quick fixes” let people off the hook for climate guilt. Even worse, technologists can overestimate their impact, detracting from more impactful solutions. At the same time, Hayek says he has no problem with Alga Biosciences. “I'm glad all these companies are seeking private investment and growth,” he says, rather than selling offsets in carbon markets.

Robert Stoner, the deputy director for science and technology at the MIT Energy Initiative, agreed that it’s too soon to see which of these latest climate tech ideas will make a real impact. “The answer in every case as to their viability will come down to the usual things,” he says, which includes determining demand and how dedicated the team is. “I’m not terribly optimistic about these specific ideas based on the limited information I see, but half the fun of early-stage startups is trying to make something of them, so I don’t want to say a single discouraging word to or about any of them.”

These startups must now convince the wider investment community that their ideas can be good business. In their demo day pitches, founders underscored the possibility that their startups could both reduce carbon emissions and make money doing it. But the mood in the room is very different from just a few years ago, when founders working on climate tech startups were often told that their ideas couldn’t make money, or would be better off as nonprofits. 

“The founders of today are in a very lucky position,” says Alain Rodriguez, cofounder of SINAI Technologies, which makes software for carbon management. SINAI went through Y Combinator in 2020, when there were only three climate tech companies in the batch, and far fewer investors looking to include climate in their portfolios. “People are no longer questioning if there’s a market.”

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