Optimism Related to Cleantech for 2021

4 min readFeb 16, 2021

Insight from Kelsie Dawe, originally published on February 16th, 2021.

A culmination of factors is setting a precedent for massive growth within the clean energy industry in 2021. The Biden administration has made a clear and consolidated effort towards the achievement of economy-wide net-zero emissions by 2050. As a result, unprecedented investment into clean energy and innovation of this space will ideally lead to a long-anticipated profit for the industry as a whole.

The growth of this industry is not only probable but already identified within the 2021 market. Blink Charging (NAS: BLNK), a provider of electric vehicle (EV) charging services, rose 15.6% percent in January. Blink’s sudden rise can be partially accredited to Reddit users’ targeting of shorted stocks. To quickly summarize this complicated disruption, a large influx of “Robinhood Investors” began purchasing stocks, such as Gamestop, Blink, and AMC, of which several hedge funds had bet would fail or underperform. One may assume a company such as Blink would be a solid investment, however, for the past several years the venture’s financials have been less than ideal, begging the question — what is the appeal? Given, there is little tangible backing to this unexpected growth, a large factor points to the hype surrounding the EV industry, as well as clean energy as a whole. In a macro sense, this means there is a strong feeling of optimism for the industry shared among investors, allowing clean energy companies to find success even if they are not meeting their margins.

Addressing the scope of venture capital, many optimistic decisions were made, leading to an increase in deal volume. 2020 did not appear to limit industry scaling, however, expected limitations hit in Q3 producing low levels of deal volume and a stark reduction of invested capital that had not been recorded within that range (around 550 in deal volume and only $7.5M invested) since 2018. This is likely due to the impacts of the pandemic. Assuming the limitations from Q3 would transfer, as many of the same obstacles would still be in place, predictions for Q4 were anticipated to be even worse. In a surprising turn of events, Q4 wildly surpassed any and all expectations, with $12.3M invested and 582 recorded deals. Granted, this was achieved on the smallest investment round count out of the past three years and largely structured on growth equity and larger stage deals. Although this is a promising outlook for 2021, it also showcases the ability to adapt and reconstruct traditional practices in the VC world, providing more contributions to societal innovation.

Reviewing some of the verticals of interest only further enhances the promising outlook for clean technology in 2021. Some highlights to touch upon were the impressive growth within agriculture and food. A rise in production can be anticipated, as advanced technology further develops an understanding of large-scale agricultural operations in addition to the elimination of the industry’s negative impact on the environment. Europe, without a doubt, was home to the most significant uptick, with transportation and logistics largely responsible. A large obstacle for many cleantech startups in the past has been navigating the transition to go public. A shortcut uncovered in 2020 was through SPACs (special purpose acquisition companies), a very clear trend noted in 2020.

Regardless of the length of time, it has taken to reach this point, there is no doubt the obvious drive for expansion within the energy and power market. Alterations of value within the public market serve as proof for the transition to clean energy. For example, Tesla replacing Exxon Mobile or G.E. dropping from the Dow. The rally for net-zero, decarbonization, and new promises from notable big-tech companies parallel to the U.S. administrative goals, will ideally scale the space from zero-to-one. However, the true factor of growth is partially dependent upon the interest of the private equity and venture capital markets. This notion has been perfectly characterized by Blackrock’s CEO, Larry Fink, who stated in his annual letter to CEOs, “because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself. In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.”

Work Cited

Kelsie, Rine’s co-managing director, is a junior from Nashua, NH who is pursuing both a major in finance and a major in information systems & business analytics from UNH. She has aligned herself with various startups of different stages, ranging from pre-seed to unicorn status within the Greater Boston area. Kelsie has spent her summer working for Kikori, an edtech startup where she built out financial models, organized marketing efforts, and aided market research to enhance development. Kelsie joined the Fund to learn more about startup success from the viewpoint of both the entrepreneur and the investor.

Optimism Related to Cleantech for 2021

Written by Rines Angel Fund