MaRS Discovery District
101 College Street, Suite 155
Toronto, ON, Canada, M5G 1L7
San Francisco, USA
PierX, Bryggegata 3, 0250 Oslo
We invest broadly in technology companies that have a positive impact on climate change and sustainability. We believe cleantech is no longer a narrow investment sector and is quickly becoming ubiquitous. Every business across every industry that hopes to thrive in the future must consider how it will achieve net zero emissions and full circularity in its business model.
ArcTern believes solar photovoltaics (PV) and offshore wind will dominate the renewable energy generation world in the coming decades. However, ArcTern also believes there will be interesting investment opportunities with respect to new baseload renewable energy technologies, particularly those of modular design (1-20 MW). We are interested in technologies that complement or feed into the existing solar PV and offshore wind value chains from component manufacturing to installation and service. Additionally, we are excited about emerging technologies that can provide baseload and/or energy on demand, such as low-temperature waste heat-to-electricity, small scale solar thermal technologies, and modular biofuel innovations.
Clean energy generation technology and sector examples include:
- solar PV and offshore wind technologies and services that support the current value chain (e.g. AI, and quantum for site selection and production optimization, service efficiency technologies);
- modular baseload renewable technologies (e.g. low-temperature waste heat-to-electricity, small scale solar thermal); and
- renewables and biofuels, including solar-to-fuels.
Energy Efficiency and Storage
Reduced and/or smarter energy use through efficiency technologies and solutions is clearly beneficial. However, ArcTern’s experience is that finding highly scalable investment opportunities in these areas is a challenge. We will continue to explore opportunities to apply emerging information technologies, such as AI, quantum, cheap sensors, and automation, to managing energy efficiently at scale. ArcTern believes that energy storage is the greatest challenge to continued renewable energy growth globally, and the greatest opportunity for growth and disruption. Low-cost energy storage is critical to matching intermittent electricity supply from renewables with demand curves and providing flexibility to ageing electrical grids. ArcTern believes energy storage solutions will vary depending on need (e.g. duration, in-front-of-the-meter vs. behind-the-meter, grid vs microgrid), and there will be a variety of solutions depending on the specific need.
Energy efficiency target technologies and sectors include:
- smart electrical grids;
- breakthrough energy efficiency technologies and materials;
- artificial intelligence/quantum for energy management; and
- smart home technologies.
Energy storage target technologies and sectors include:
- energy storage management solutions;
- microgrid technologies and services;
- lithium-ion improvements; and
- long-duration storage solutions.
A circular economy aims to minimize resource use and waste, both technical and biological, while working to cycle valuable resources in the economy as efficiently as possible in a “cradle to cradle” process. The traditional extractive economy—a “take, make, and dispose” approach—is both unsustainable and inefficient. ArcTern believes that there are many attractive investment opportunities resulting from the shift to the circular economy.
Circular economy sector examples include:
- full-life asset tracking;
- advanced recycling/upcycling;
- sharing economy (e.g. extended closet), or product-as-a-service (PaaS) models; and
- circular product designs (e.g. white goods that are easy to repair).
Advanced Manufacturing and Materials
Advanced manufacturing and materials that enable products to be produced with less energy and fewer resources are necessary for the shift to the low-carbon, circular economy. This includes everything in the value chain required for product manufacturing, from smart product design and manufacturing processes to logistics and value chain optimization. With today’s emerging technologies, from additive manufacturing to AI-enabled product design, it is clear most products will be manufactured very differently than they were in the past. ArcTern expects that this will create many attractive investment opportunities.
Advanced manufacturing and materials target technologies and sectors examples include:
- additive manufacturing and services;
- smart factories (sensors, predictive analytics, AI, quantum computing, robotics);
- modular construction technologies and manufacturing; and
- advanced materials and their discovery (AI and quantum for materials discovery, biomaterials).
The efficient movement of people and things is one of the fastest-changing sectors of the economy today, from autonomous vehicles to last-mile delivery services. The rapid and continued progress on battery energy density is enabling electrification of things previously thought impossible, like last-mile delivery robots, electric planes, extended range droids/drones, and mining and other heavy machinery. Navigational sensing technologies, combined with artificial intelligence, are enabling the autonomous movement of both people and things. ArcTern believes that the dramatic changes in this sector are creating many attractive technology and service investment opportunities.
Mobility technology and sector examples include:
- electrification and autonomy of everything that moves;
- electric charging infrastructure;
- new transport modes made possible by improved battery energy density (drones, pods, magnetic levitation, vertical takeoff and landing); and
- traffic and fleet management (smart city, networks, sensors).
Agriculture represents 10-12% of global GHG emissions (comparable to the entire transport sector), with about 70% of emissions in the subsector coming from agricultural soil practices and methane from livestock. ArcTern believes that there are significant opportunities to both create value and reduce GHG emissions across the agriculture value chain – from using sensors, robotics, and AI to make conventional farming more efficient, to reinventing the way that food is produced at scale (e.g. vertical farming), to completely replacing carbon-intensive food sources (e.g. plant based meat/dairy alternatives). We are interested in investment opportunities in this sector that reduce GHG emissions and toxins in our ecosystem.
Agricultural and food technology and sector examples include:
- precision farming (AI, machine vision, big data, sensors, robotics);
- plant-based food inputs and cellular meat; and
- new farming methods (vertical farming, urban farming, hydroponics and aeroponics).