In recent years, there has been a surge in the establishment of climate-related startups, yet for Philip Krim, the co-founder of Casper, this is insufficient.
Krim expressed to TechCrunch the necessity for a greater number of entrepreneurs initiating innovative ventures in this field. He emphasized the scarcity of individuals starting from scratch in the climate sector compared to other industries.
Having founded Casper in 2014, Krim is well-versed in entrepreneurship. Following the company’s public offering in 2020 and subsequent sale to private equity in 2021, he shifted his focus towards nurturing new ventures. Among these ventures is Haven, a company aiding individuals in the installation of home batteries. Krim explained that his fascination with the climate sector grew over time, leading him to develop a deep affinity for it.
During his journey, Krim crossed paths with Evan Caron, a former commodity trader, and later with Sharo Atmeh, a lawyer and portfolio manager. They swiftly discovered their shared desire to cultivate a dynamic, agile, and entrepreneurial culture akin to what is prevalent in other sectors of the tech industry.
While one common route would be to establish a venture capital fund, the trio realized they had numerous ideas but lacked the time to materialize them independently. Instead of opting for a VC fund, they have chosen to launch an incubator named Montauk Climate, as exclusively revealed by TechCrunch.
Although the incubator model isn’t novel, there are few dedicated solely to the climate sector. Some incubators admit founders and assist them in shaping companies from the earliest stages of development, while others, such as Atomic, Idealab, and Flagship Pioneering, adopt a startup studio approach by conceptualizing businesses themselves. Montauk Climate falls into the latter category.
“We conceive the businesses we want to establish,” Krim said “We’re not considering others’ ideas. We’re truly formulating the concept and then enlisting talent to lead the team.”
While many climate tech companies focus on hardware solutions for various issues, the Montauk team is adopting a distinct strategy. The new incubator aims to develop businesses that complement the hardware-centric efforts while leveraging their expertise in energy, software, and infrastructure.
Atmeh emphasized that fundamental scientific projects, such as wind, solar, hydrogen, and geothermal energy, have either made significant progress or have already been established. With these foundational elements in place, there’s an opportunity to develop the connecting components necessary to enhance connectivity between consumers, utilities, and renewable energy sources. This involves streamlining the fragmented system and operationalizing it effectively.
With an initial funding of $8.5 million, primarily led by a $7 million investment from Sheel Tyle, managing partner at Amplo, Montauk Climate will explore potential business ventures internally. Once they identify promising opportunities, they’ll assemble a team and allocate initial capital to the venture.
Krim explained that once they have a solid team and a thoroughly vetted business plan, they’ll seek funding from venture firms they have existing relationships with to support the spinout company. Montauk Climate intends to retain shares in these spinout companies and secure seats on their boards.
Caron mentioned that the team is concentrating on several sectors, including energy consumption in data centers, incentives for electrification, aggregation of weather data, and insurance. These endeavors are anticipated to revolve around software or platform solutions. Krim noted that the insurance concept is the most advanced, with an experienced CEO from the industry already onboard and a model focused on aiding business owners in mitigating risks associated with climate change.
“We anticipate launching a few incubated businesses in the second and third quarters of this year,” he stated. As the portfolio of incubated companies expands, Montauk Climate plans to establish its own venture fund to provide further support to these ventures.
If these new businesses can thrive, they’ll be operating in a potentially fertile environment. According to the International Monetary Fund, investments in low-carbon initiatives amounted to $900 billion in 2020, but they need to increase to $5 trillion by 2030. With such substantial sums at play, it appears to be a favorable market for founders.
