Cleantech Niches Primed to Win in Georgia
Georgia's resources provide durable competitive advantage to a broad range cleantech innovators, but there are a few niches where being in Georgia is particularly advantageous.
Hey there,
There is no formula for winning in cleantech, however, one cheat code is to pick a niche where your local innovation ecosystem is an unfair advantage for your company.
If you are an innovator looking for a concept, or you have a concept and are wondering if it will hunt, or perhaps your have an established business looking to pivot, this post is for you.
Today, we dive into several cleantech niches, where being located in Georgia is a distinct advantage for your business. We will:
Identify the niches
Explain Georgia’s advantage
Provide examples of companies already leveraging these advantages
Before we dive deep, here is some timely outside reading that impinges on our ecosystem.
Curated Links: Takes on the IIJA and IRA Pause
A lot has been written in recent days regarding the impact of the freeze of the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) on cleantech. Here are a few takes and practical advice for different sectors:
What a pause on IRA fund really means (10 minutes) — Not a particularly uplifting take by Latitude Media. Two things seem likely: legal disputes and increased risk for non obligated funds.
What Trump’s Infrastructure Announcements Mean for States (10 minutes) — A pivot from physical infrastructure to digital infrastructure and a back-track on Justice40 are underway.
Trump transition slowing, not stopping, US cleantech boom (7 minutes) — There is already evidence of some pull back in investment, especially foreign direct investment.
Practical Tips for Surviving the New Administration’s “Pause” on Federal Contracts and Grants (15 minutes) — “Keep calm and carry on” applied to modern cleantech.
And now, let’s return to what it takes to build competitive advantage that is durable in any political climate.
Deep Dive
Cleantech niches where Georgia innovators have a distinct advantage
Innovating in cleantech requires much more than a great technology, strong team and a favorable market dynamics. There are a considerable number of tangible and intangible factors that are adjacent to an enterprise that are needed to grow a business rapidly in cleantech. Companies are much more likely to find these factors when they are already present in their immediate innovation ecosystem.
Materials and Processes for Industrial Product Efficiency
This is where hard science and engineering meets design in the cleantech arena. Going back to the BASF commercials from the 90’s, these innovations don’t make a products you buy; they make them better. Examples include enabling new materials for separating metals, new composite materials for construction, new coatings for power modules. Transitioning these materials from basic R&D to commercial readiness is long and costly, and companies in this space benefit greatly from being in close proximity to customers that get involved in the development phase and the senior staff that have navigated scale up in both startup and corporate settings.
GAs Advantage: The advantage starts with strength in university R&D. Georgia Tech is ranked in the Top 10 nationally in Material Science and Engineering. Georgia Southern recently launched its Center for Advanced Material Science, and similarly, UGA recently expanded its New Materials Institute. Universities also have experienced entrepreneur-in-residence type roles that help shepherd these “hard” tech innovations through early commercialization prior to startup or licensing. The region’s manufacturing capability is a second distinct advantage. Not only are the state’s OEMs with local manufacturing ideal development partners and off-takes, so too are the Tier 1, 2 and 3 suppliers to these larger companies.
Example Companies: Two Georgia start-ups are currently taking advantage of Georgia relative strength in this niche, Carbice, whose carbon nanotubes are cooling the power modules required for wide-spread electrification and Weav3D, whose composite materials are enabling light-weighting in the automotive and construction industries.
AI for Building Diagnostics and Design
This is where CAD, drones, sensors, and big data meet recurring revenue models. This is a niche that best fits traditional VC models. Software investments in this space range from serving architects designing new buildings or retrofitting old ones to owners for building portfolios looking to reduce O&M costs. The built environment contributes to roughly 40% of global greenhouse gas emissions and nearly 75% of that is generated during the operation of the building. The business cases don’t have to rely on a climate-centric marketing message because these solutions create value through direct cost savings.
GA’s Advantage: Startups beget new startups, and already having a base of thriving start-ups in this niche is a significant advantage for innovators in and near this space. Moreover, the demand for this products and services are high in Georgia; while electricity rates are generally low, the energy intensity of maintaining climate-controlled buildings the south is high. It the probably not a surprise that Shadow Ventures, a ConstructionTech and PropTech VC firm that specializes in this niche, was founded here and still has a major presence in the state after recently expanding its footprint to the West Coast.
Example Companies: There are no hubs in the country with more activity in this niche than Georgia. Led by Cove (formerly Cove.Tool), whose software solutions help architect design more energy efficient buildings, the group (including Joulea, Lamarr.ai, Green Badger and Skema) forms an innovation cluster that is pulling the best talent in this space to the state.
Sustainable Aviation Fuel from novel crops and forestry residues
Aviation sits clearly with the cement, steel, glass, chemical, and heavy-duty transport sectors as the most challenging to decarbonize. Roughly responsible for 3% of global emissions, aviation has really only one clear lever for decarbonization, the reduction of emissions from aviation fuel primarily achieved through adoption of jet fuel derived from non fossil feedstocks, or sustainable aviation fuels (SAF). This is again a capital intensive niche, but one where the complexity of the supply chain and processing can lend itself to startups with enabling technologies.
GA’s Advantage: There are few places in the world have the proximity to demand, supply chain assets, diverse feedstock supply, and technology expertise that Georgia does, making it ideal for SAF innovation and integrated supply chain development. Almost every Georgia university has active research in an element of the SAF supply. Pipelines, forestry and agriculture logistics, Hartsfield-Jackson Airport, and Delta Airlines as potential development and off-take partners solidify the state’s position.
Example Companies: This is a notoriously difficult space for start-ups because the low-margin, high-capex, and long and unpredictable project timeframes make it untenable for typical technology startup funding models. That has not stopped Cultiv8 Hemp Solutions from leaning into this niche. Startups in this space will likely have be savvy at partnering and deeply integrating their technology with existing players.
Materials and Processes for Electrochemistry
Electrochemistry is having a moment. Not quite the type of moment that AI is, but innovation in electrochemistry and the technologies that enable it are becoming increasingly important in an effort to deeply electrify and extract as much energy from fuel and renewable sources as possible. At the interfaces a vast number of technical disciplines, innovations in such as graphite battery anodes from renewables feedstocks, solid-state battery chemistries and new electrolyte additives exemplify what is happening today to “eke out” the next efficiency gains in these technologies.
GA’s Advantage: As with the previous examples, it is a combination of world-class university research and proximity to customers and manufacturing that create the milieu for success. Georgia sits squarely in America’s “Battery Belt”, and is also home to the Western Hemisphere’s largest solar manufacturing plant. Hyundai also has large aspirations in growing a hydrogen fueling supply chain. Georgia Tech is actively looking to expand its advanced manufacturing R&D prowess into the battery components.
Example Companies: JTEC Energy and Johnson Energy Storage, both spinouts of Johnson R&D, are two startups thriving in this niche. Both a looking to use material science and system level design to develop novel electrochemical devices that solve the problems of energy density in storage and efficient heat-to-power conversion.
Stepping back, a few things become clear:
Multiple of Georgia’s strengths align to make these niches attractive,
It is less obvious what the cleantech strengths are a sector level in GA, however, logistics and the built-environment are leaders.
‘Hard’ tech or ‘Deep’ tech are opportunity areas
There a few niches that just missed the cut, Green Fintech, Industrial Circular Economy, Indoor Agriculture. Let us know what else we may have missed.
Upcoming Events and Opportunities
It is never to late to start engaging with the community; get these events on your calendar.
ATL Cleantech Connect — Feb 12 (moved from Jan 22) — A quarterly social to engage members of the Greater Atlanta cleantech community, focusing this month on the water-energy nexus at the Russell Innovation Center for Entrepreneurship
Cleantech Hustle Hour — Feb 19 — Start-up only monthly meetup to build camaraderie amongst those who know what the cleantech hustle is all about.
Southeast Energy Conference — Feb 28 - Mar 1 — Student-organized conference connecting corporates, students and community around energy issues
EPRI Electrification 2024 — Mar 12 -14 — An international conference & expo, featuring everything you expect out of a multi-day event with a deep focus on electrification.
UGA Electric Mobility Summit — Mar 13 — This 3rd annual meeting will focus on advancing the adoption of electric mobility in the state, the educational programs that we will need to support the growth, and the future of electric mobility in Georgia and beyond its borders.
Did we miss an event? Do you have an upcoming event that you want included? Please let us know!
Wrap up
That is it. We covered a lot of ground today from the impacts of policy to winning formulas for cleantech startups in Georgia.
Here's what you learned today:
Georgia is primed to succeed a several cleantech niches where research prowess, density of demand and manufacturing align.
Pulling back to a sector level logistics and the built environment are areas where Georgia can lead on a national-level with technology depth in hardware and software
Georgia has a number of start-ups that are already in the arena in these niches
If you are interested in discussing and debating the topics in this newsletter, please engage us in the comments, on social, or contact us directly. The conversation is what the ecosystem needs to progress.
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