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 TechCrunch
Chris Sacca on climate investing
right now: The opportunity ‘almost feels unfair’
Today, for a
series of climate-related conversations organized by the global
venture firm
SOSV,
we interviewed famed investor Chris Sacca, whose investment firm
Lowercarbon Capital is managing $2 billion in capital across one
fund that’s focused on nuclear fusion, another fund focused expressly
on carbon removal, and the rest across a wide spectrum of bets.
In our chat, Sacca dismissed questions
around whether efforts like carbon capture can work at scale. (“The
naysayers kind of fuel me, actually.”) He also said — naturally — that
he has “no doubt we will have multiple companies worth trillions of
dollars that emerge from our portfolio.” It wound up being a fairly
wide-ranging conversation and you can watch it in its entirety at page
bottom. Meanwhile, below are excerpts from our chat, edited lightly
for length.
TC: The big news of the moment is
the Inflation Reduction Act. It allocates more than $300 billion to
energy and climate reform, $60 billion for boosting renewable energy
infrastructure, and manufacturing like wind turbines and solar panels.
At the same time, it fell short of what climate activists really
wanted to see. What do you make of it?
CS: Look, the president himself called it
a big fucking deal. And it is. It’s a huge step forward for our
industry, for our country, and the planet — no doubt about it. Bless
the activists. I love where their hearts are, but we have to be
pragmatic about this, and we don’t have time for purity tests. . . It
was better than we could have expected, frankly, and we’re glad
everyone got to the table and hammered on a solution.
Were you consulted by anyone in
Washington?
We weren’t. Actually, I have an allergy
to Washington. One of the reasons we started Lowercarbon was after
years of basically rebuilding the democratic tech stack, I got a
little burned out by a process that’s so many degrees removed from the
ultimate solution. So we built Lowercarbon to say, look, we can build
climate solutions now, where it’s up to us to deliver something that
consumers and businesses want to buy from us. If we have any
relationship with government, it’s government as a buyer. If free
money falls out of the sky, we’ll take it, but everything we’ve done
now makes sense because the unit economics are there to go ahead and
compete head to toe with products that are predicated on petroleum. It
was actually just a bonus that the IRA got passed, but we weren’t
counting on it.
Your timing is remarkable,
considering that even if we were to enter into recession at this
point, this money is now going to be flowing into the economy, making
climate investing relatively bulletproof.
[Climate investing] is recession proof,
even without the IRA. Everything we’re doing is providing a substitute
good. That’s what almost feels unfair. You spend years building
Twitter and you put it up in the app store and you hope somebody gives
a damn. It could be a really well-designed product, but maybe no one
cares, whereas everything we’re building right now, we actually know
the demand for it. And if we deliver a better, cheaper, faster,
cooler, easier-to-use, sexier product, then we’ll even grow the
market. So I actually think this is some of the easiest investing
we’ve done.
What’s happened in the war in Ukraine,
the shortages of energy facing Europe, overall climate disasters
around the planet, the commitments that companies have made to
decarbonize, and the reality that clean energy and clean products are
reaching price parity are just massive tailwinds that we’re trying to
keep up with, frankly.
You busted out of the gate last
year with an $800 million fund. Then this spring, you announced a $350
million fund that was focused exclusively on carbon removal. Why break
that out as a stand-alone effort?
So basically carbon pollution that we put
in the atmosphere, we’ve got to get back out . . . and that can happen
in a wide range of ways, from direct air capture — those big fans out
in the desert that are sucking air — to accelerating biological
processes [like] crushing up rock that carbon loves to attach to, or
growing algae or kelp. And so we have a fund dedicated exclusively to
that. It’s a burgeoning industry; we’ve partnered with companies like
Stripe and the Frontier Group that they brought together. And that was
a separate fund because . . . we saw the cost of building this stuff
come down so precipitously, and the revenue available and the spend
available go up so precipitously [that] it reminded us of the early
days of Y Combinator [when] the cost of building a company had come
down by orders of magnitude.
Money doesn’t always produce
results. It’s exciting that there’s so many options now and so much
money is flooding into carbon capture, but do you worry that industry
is going to say, “We’re putting money into this marketplace,” or
“We’re putting money into this technology, so we can continue on with
our bad behavior”?
I am not concerned because, frankly,
digging up and burning old dinosaur bones is expensive, so every time
we remove that from a process or a product, we make money. And carbon
has real value. When we capture carbon, there are uses for it. We
upcycle it into jet fuel. We’re now embedding it in stuff like
concrete, so there is value there. So companies can continue with what
you call bad behavior, but that’s just bad business. And so yes, I
mean, greenwashing and fake ESG funds and stuff like that are
bullshit. But the reality is anyone who continues down that path is
just gonna get left behind by the biggest economic transformation in
the history of the planet.
A lot of skeptics question
whether carbon capture will work at scale. I recently read that the
world’s largest carbon direct air capture facility that’s currently
under construction is expected to remove only .0001% of the carbon
dioxide emitted globally every year.
When I hear that, it sounds like the
person who thought there’d be no need for more than seven computers on
the planet. Betting against technology, chemistry and physics is a bad
bet every time, and if you want to line up against that bet, I’m here
for you on the other side of it.
The reality is we keep seeing step
functions and geometric progression and the advancement of these
technologies. So I love the naysayers and I’m kind of like, “Okay,
stand back and watch.” Like, I’m at this point where I kind of don’t
give a shit and I’m like, either you’re helping, or get the fuck out
of the way. Bless anybody who says that shit; they just haven’t been
in the lab. They haven’t seen what’s happening, and they’re literally
betting against what we’re seeing as a rate of change in technology
that is steeper than ever before. It’s compute power. I mean, the
amount of compute power that a team of three scientists now has
available to them would have cost a half a million dollars eight years
ago. So now, in a lot of our industries, experiments that used to take
a year or two years to design, execute and digest can be done hundreds
of times per week. It’s literally that steep a curve.
You did make your early fortune
by investing in Twitter. I have to ask: Elon Musk as owner. Thumbs up
or thumbs down?
With Twitter, we had the very best
intentions in the early days, and it used to be really healthy. Now I
feel like we invented cigarettes all over again. I think Twitter is
toxic. It’s addictive, and it preys upon our most primal
dopamine-driven instincts in the world. And I’m not convinced that
anybody who’s agitating for more freewheeling content and less
moderation there is going to improve the health of that environment at
all.
I’m saddened by what Twitter has become,
and I wish we had seen that. I think we were all naively excited about
the democratization, and giving everyone a voice and we were naive
about how it’d be weaponized, and so that’s that.
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
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