When Ashland’s Dominion Energy Innovation Center launched its first clean tech-focused accelerator last fall, one of the startups invited to participate was Longleaf Conservation Capital.
Founded by Richmond entrepreneur Aaron Bumgarner, the company is “a next-generation sustainable natural resources investor and manager.” Through land ownership, Longleaf can sell carbon credits to corporations interested in offsetting their greenhouse gas emissions.
“We are essentially bridging that gap to create the carbon credits, get them verified, certified on the land so we control it all, then sell them to corporations,” Bumgarner said.
Richmond companies like Longleaf are part of a clean tech industry that’s gathering momentum — Just look at the past year.
On a national scale, the Biden administration named climate change a chief priority. Statewide, Gov. Ralph Northam is advancing clean energy and sustainability initiatives.
And in Richmond, Babylon Micro-Farms, a startup that makes indoor hydroponic farming systems, recently made headlines by relocating from Charlottesville, joining established clean techs like Terravive and TemperPack and up-and-comers like Longleaf.
“This is a cool, fun field to be in right now,” said Adam Sledd, DEIC director. “And there’s a lot of room to run.”
Defining Clean Tech
The seven-member cohort that comprised DEIC’s first accelerator was a diverse group. In addition to Longleaf, the accelerator included Linebird, a Richmond startup developing drone payload technology to support power line maintenance.
Other cohort members included companies providing home energy management systems, redesigning solar cells and creating apps to connect users with brands that share their social and environmental stances.
“I think clean tech, or climate tech, at this point, means the holistic sort of set of innovations we need to have a stable climate, to slow down climate change and decarbonize our economy,” Sledd said.
A decade ago, renewable energy was the focus. That’s still a big piece, Sledd said, but so is reducing plastic waste, using sustainable materials and increasing clean transportation options, to name a few.
“It’s basically that the definition expanded as the science got better,” he said. “We know a lot more today than we did 10 years ago.”
Even the last two years have made a big difference, said Brian Powers, TemperPack co-founder and CEO.
TemperPack, which manufactures sustainable packaging for shipping perishable items like food and medical supplies, raised more than $80 million since its 2015 founding. With 300 employees, its clients include HelloFresh and UPS Healthcare.
“It’s finally reached a momentum threshold,” Powers said. “There’s just been so much more data coming out about climate change, and about how we have a small window to change course in how we consume energy, and the types of materials that we use.”
The Greening of Virginia
Last month, Terravive, a Richmond company that makes compostable, ocean-degradable products like take-out food containers, had reason to celebrate. Northam issued an executive order directing state agencies to phase out single-use plastics and polystyrene containers, the kind often used for takeout food. He also signed legislation banning polystyrene containers by 2025.
“By default, throughout Virginia, throughout Richmond, our type of products, Terravive’s sustainable products, they’re going to be very prevalent,” said Vice President and COO Joe Swider.
Virginia has taken several steps in recent years to make the Commonwealth a more welcoming place for clean energy and, by extension, clean tech. For example, the Virginia Clean Economy Act, passed last year, sets 2050 as the deadline for achieving a carbon-free grid. Virginia also joined the Regional Greenhouse Gas Initiative, becoming the first southern state to do so.
“The clean energy industry as a whole is booming in Virginia,” said Chelsea Harnish, executive director of the Virginia Energy Efficiency Council. And it’s getting noticed, she said, pointing to the most recent scorecard put out by the American Council for an Energy-Efficient Economy. In 2020, Virginia achieved its highest ranking ever, landing at No. 25.
“The fact that we are seeing a booming clean energy industry gives us the opportunity to pivot to technology and become a leader in innovating and developing new ideas and bringing them to market,” Harnish said.
It’s not just government driving clean tech’s momentum. Northern Virginia is an enormous market for data centers, attracting companies that have been vocal about sustainability. That’s good news for startups, Sledd said.
“If you build a market, the startups will come,” he said.
Julianna Keeling, Terravive founder and CEO, sees corporate support as “the catalyst” to accelerate startup growth, pointing to the support her company has received from Dominion Energy.
“The thing that’s really going to take a lot of green technologies to the next level is partnerships with corporations and strategic partnerships with larger organizations that can help scale the solution,” she said.
Green Dollars
By 2025, TemperPack wants to be the world’s largest sustainable packaging company. Four years ago, a $12 million investment from SJF Venture marked a turning point to helping the company reach that goal, Powers said.
More early stage funding can help the next clean tech startups take off, he said.
That’s where organizations like the Center for Innovative Technology are playing a role. CIT GAP Funds has made equity investments in 16 early-stage clean tech companies since 2007, investing $50,000 to $500,000 in each company over time, said Marco Rubin, Senior Investment Director.
Last month, CIT announced it was investing in Linebird. Founder and CEO Michael Beiro described Linebird as an infrastructure resilience company whose technology offers clean tech benefits. By replacing high-emission helicopters and bucket trucks with drones, Linebird can make it safer to conduct preventive maintenance, which could reduce blackouts and generator use.
“There’s a lot of knock-on, butterfly effects of our technology that I think could have a really positive impact for emissions and for the environment overall,” Beiro said.
Surveying the Virginia clean tech ecosystem, Rubin said he feels optimism he didn’t have 15 years ago.
“Right now, I’m super optimistic, because I feel like for the first time in a very long time there’s a tailwind of interest at the capital level, at the policy level, and I know the tech is there,” he said.
While Rubin believes Virginia’s clean tech industry is on the rise, he thinks there’s a way to increase excitement among both investors and entrepreneurs.
“We need a couple of big exits,” he said, meaning acquisitions or IPOs. “There’s nothing like success to inspire other entrepreneurs to take a risk.”
At least one Richmond clean tech startup has an IPO on the horizon. Bumgarner plans to take Longleaf public in Q3.
The Common Clean Tech Mission
While their approaches vary significantly, one thing Richmond’s clean tech startups have in common is a united commitment to sustainability.
“You realize that there are all these pieces to the puzzle,” Sledd said. “Every piece of our infrastructure has carbon associated with it, and we have to fix all of the pieces in order to get where we need to go.”
As for what the future holds, Sledd predicts the market will accelerate.
“In climate tech, we actually have a ticking clock here,” Sledd said. “Change has to happen. It has to happen as quickly as we can make it, and we’ve given ourselves a deadline. We have to overhaul literally everything we do.”
Sledd added, “It doesn’t get much more poignant than that.”