Assessment of Venture Capital's Role in Climate Tech: A Case Study on End-of-Life Batteries

Abstract

Venture capital (VC) is a subset of private equity that invests in early-stage companies, traditionally targeting software companies due to their attributes of being capital-light, experiencing fast growth, and generating recurring revenues. Beginning in 2017, “Climate Tech”, a loose term for a wide array of tech-enabled solutions to climate change, became increasingly prevalent in VC and challenged the conventional focus of investing. As a continuation of a years-long internship with a climate tech VC firm, this study assesses the merits and drawbacks of applying the traditional VC model to climate tech and, in doing so, presents a subset of the work done during the internship on end-of-life batteries. The latter explores the market for end-of-life batteries, namely recycling and second-life applications, and the criteria needed to make an investment decision in the space.