PitchBook News - Fusion fantasy, solar substance

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The Weekend Pitch

December 18, 2022

Presented by Masterworks

(Joey Schaffer/PitchBook News)

Earlier this month, scientists shot a cluster of lasers at helium isotopes and—for the briefest of moments—got an inkling of what it would be like to control a star.

The experiment at the Lawrence Livermore National Laboratory in California marked the first time that a fusion reaction spun off more energy than was used to create it. It's an important milestone, but commercial fusion is likely still decades off, even if things go well.

The task at hand is upending the global energy system, so more moonshots are certainly merrier. But the climate is not waiting, and dozens of other clean energy technologies are ready for prime time. Moreover, politicians finally seem ready to spend money to accelerate their deployment.

Venture investors say the primary challenge for climate-tech startups is no longer tech breakthroughs. It's time to scale. But how do they do it? New business models, big-name partnerships and gigatons of software.

Welcome back to The Weekend Pitch. I'm James Thorne and you can reach me at james.thorne@pitchbook.com or on Twitter @jamescthorne.

Trivia

In 2021, 596 companies gained enough value to cross the $1 billion threshold and become unicorns. How many companies have become unicorns through the end of November this year?

A) 645
B) 254
C) 443
D) 308

Find your answer at the bottom of The Weekend Pitch!

All fuel, no flames

(fokke baarssen/Shutterstock)

VC investment in clean energy is pacing to match the $15 billion high point set in 2021, making it a rare bright spot for startups. Thanks to a double whammy of high energy prices and generous stimulus from the US government, the sector is set up for significant near-term growth.

The upshot: Fusion breakthroughs will need to come a whole lot faster if the technology wants to partake in this energy transition.

Our first-ever Clean Energy Report details the state of play.

Quote/Unquote

"I am as bearish on private equity as I've been in my career."

—Marcus Frampton, CIO of the Alaska Permanent Fund Corporation, discussing the fund's target PE allocation at a board of trustees meeting. Many institutional investors, including public pension plans, are wrestling with how to structure their allocations for next year.

VC impact funds make a splash

(Pasuwan/Shutterstock)

Some say venture capital is not the right strategy for impact investing. Don't these sprouting companies already have a difficult enough path ahead? That's wrong, others say. Why not start a business out with a strong foundation for sustainable activities or fund the products that make a better world?

While PE raised more capital overall for impact funds closed between 2007 and September 2022, VC surprised some by swooping in for a larger proportion of the number of impact funds raised. While PE accounted for 24.6%, VC's slice was 42.7%. Learn more in PitchBook lead analyst Hilary Wiek's latest deep dive on impact investing.

Infrastructure funds are ballooning in size

Data centers, wind turbines and telecom equipment aren't cheap to build, and the rising number and scale of new projects mean that vehicles designed to invest in these assets might need to grow too.

Funds focused on infrastructure are only getting bigger, and more mega-funds—over $5 billion—closed in 2022 than in recent years. Among them, four raised at least $14 billion apiece.

With lots of money comes ample opportunity to spend it. Check out PitchBook's latest Real Assets Report for insights into who raised the most capital and how infrastructure fits into a real assets private investing strategy.

Stay tuned

Keep an eye out for these insights and research reports coming out this week.

2023 US Private Equity Outlook

Analyst note: Analyzing the state of cross-border M&A

2023 European Private Capital Outlook

Q3 2022 Insurtech Update

2023 Emerging Technology Outlook

Analyst note: The postdigital era

Emerging space brief: Carbon offsets

Trivia

(Arina P Habich/Shutterstock)

Answer: D)

Billion-dollar company creation has declined sharply year-over-year, with only 308 private startups crossing the threshold this year through November.

This edition of The Weekend Pitch was written by James Thorne and Chris Noble. It was edited by Chris Noble and Sam Steele.

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PitchBook News - Fusion fantasy, solar substance

Trivia

All fuel, no flames

Quote/Unquote

VC impact funds make a splash

Infrastructure funds are ballooning in size

Stay tuned

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Trivia

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