Deep Impact With Deep Tech: The Technology Impact Fund Report 2021

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TECH NOLOGY I M PACT FUN D

IMPACT REPORT / JANUARY, 2021

deep impact deep tech with


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about capricorn Capricorn was founded to demonstrate the huge investment potential that resides in breakthrough commercial solutions to the world’s most pressing problems. One of the largest mission-aligned investment firms in the world, Capricorn has grown to manage more than $7.5 billion in multi-asset class portfolios for families, foundations and institutional investors. The firm has offices in New York City and Palo Alto and is a certified B Corp. Capricorn is committed to diversity and inclusion (D&I) at both the firm-level and portfolio-level to help inform our hiring and investment decisions.

the technology impact funD The Technology Impact Fund (TIF) was launched in 2017 to build on Capricorn’s legacy making early-stage investments in successful deep tech companies. TIF invests in companies addressing global trends in technology, energy, transportation, healthcare, agriculture, and aerospace. These sectors collectively represent the intersection of Capricorn’s technology expertise and the key sectors driving the transition to a more sustainable world.

acknowledgements This report would not have been possible without the contributions of the entire Capricorn network to the Technology Impact Fund (TIF), including our employees, our portfolio companies and our investors. We are also grateful to Tideline, an impact investing consultant, for their support in developing the report and impact management system, and to the production team: 17 Communications and designer Dustin O’Neal. d i s c l a i m e r The information provided herein (the “Information” or “Report”) is being provided

Nothing contained herein should be deemed as an indication of investment

(“Capricorn”) for informational purposes only and is not intended to provide,

or that any particular result will be achieved.

by Capricorn Investment Group, LLC on its behalf and that of its affiliates

and should not be relied upon for legal, tax, financial, accounting or investment

results or financial performance, that past performance indicates future results,

advice. The Information is not and should not be construed as investment

Impact measurement, such as that contained herein, is a developing discipline.

advisory or agency relationship between Capricorn, on the one hand, and you

projections, forecasts, interpretations and assessments, all of which are those

research or as an offer to sell any security or investment product. No fiduciary,

and your employees, officers, directors or affiliates on the other hand, has been created as a result of making this Information available to you. Capricorn, its

employees, partners and/or their respective family members may directly or indirectly hold positions in the securities referenced herein.

The Information provided herein includes statements of opinion, analysis, of Capricorn and are based on information Capricorn deems reliable as of the

date of this Report. No representation or warranty is made, nor is any assurance given that any such statements, opinions, projections, or forecasts are correct or will be achieved.


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FOREWORD INTRODUCTION TO TIF CAPRICORN’S HISTORY OF IMPACT IMPACT MANAGEMENT IN DEEP TECH Impact DNA Assessment Impact Roadmap

PORTFOLIO SNAPSHOT

The Electrified Future

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12 14

16

20

Foundational Infrastructure

THE TECHNOLOGY IMPACT

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19

IMPACT THEMES

Impact Intelligence

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26 32

39

GROWTH FUND FUTURE DIRECTIONS

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This report is printed on FSC-certified recycled paper, using non-toxic production methods.


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foreword At Capricorn we love thinking about innovative and

dividends with some of the early-stage companies in the

transformative solutions to big problems. We don’t look

TIF portfolio.

at how to make an existing technology just a little better; instead, we look at what new technologies are necessary to

We acknowledge that any technology comes with both

build and power a more sustainable future. This long-term

benefits and drawbacks, and that bringing these tech-

vision has guided our investment strategy since inception

nologies to scale requires understanding and managing

and has defined how we think about impact investing.

for both positive and negative impacts. There are real challenges in meeting this goal. For example, how would

Impact is more than just a north star for our investment

somebody measure the hope and optimism inspired by

decisions—it is core to how we see the world and what

SpaceX working in pursuit of making civilization multi-

it means for Capricorn to play a role in building back

planetary? How do we think about preventing sophisticated

better. The problems today present new and more urgent

satellite or computing technology from falling into the

challenges, but the solutions are also closer at hand. In the

wrong hands?

next few decades we will need to fundamentally transform our energy, transportation, buildings, food and water, and

We think about these questions constantly, approaching

computing systems on a monumental scale. The ‘deep

them as investors and as engineers. We believe the key to

tech’ companies driving these transformations form the

maximizing our positive impact is by embedding an impact

core of our portfolio.

mindset into the DNA of each portfolio company, ensuring that products and solutions are well-positioned for the

As engineers at heart, we approach problems from a

new social, environmental, and economic structures that

systems-level perspective rather than tinkering around the

will define the future. TIF’s contribution is to invest in these

edges, scrutinizing the intersection of where the skills of

future systems by seeding certain underlying impact ideas

the management team and development team collide. As

at an early stage and providing the financial resources

investors, our role is to activate that synergy, to amplify it,

and connectivity necessary to grow the concepts into

and to align patiently and deeply with a founder’s long-

successful and impactful businesses.

term vision. This collaborative approach has been central to the successful growth of portfolio companies like Tesla,

TIF is not the first VC fund by any stretch to talk about

QuantumScape, Saildrone, and others, and is paying

solving

big

problems

and

investing

in

disruptive


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technologies. What differentiates TIF is our focus on making iconic impact investments, by which we mean investments with the potential to bend history toward sustainability. In other words, as Tesla has played the catalytic role in the electric vehicle market, we want to invest in the “Tesla of batteries.” We want to find the “Tesla of smart grids” and the “Tesla of ocean observation.” This means we hone in on the impact of a technology as the most important driver of the potential for financial returns. There is zero compromise in this trade-off. We are committed to investing in businesses that aren’t just transformative for our investors, but for all of humankind. This is what we mean by ‘deep impact.’ By investing in ‘deep tech’ and encouraging companies to think about the bigger picture, we are directly driving the kind of global change necessary to meet the challenges of our time.

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This report will include: A brief history of Capricorn and TIF, including details on the impact of some of our legacy investments and funds A description of both TIF and the Technology Impact Growth Fund (TIGF), which provides follow-on funding as companies grow, including an overview of our impact themes and underlying sectors An overview of our customized impact assessment framework, which is aligned to industry standards like the Impact Management Project (IMP) and the Sustainable Development Goals (SDGs) A snapshot of the TIF/TIGF portfolio with every company mapped against the impact assessment framework An introduction to each impact theme along with case studies of specific TIF and TIGF portfolio companies (including Joby Aviation, Redwood Materials, Saildrone and QuantumScape) Closing thoughts about our future plans as impact investors

We plan to provide updates on our impact investment We produced this Impact Report both to articulate our

journey and to share lessons learned along the way. We

approach to impact investing and to document our impact

appreciate your continued support and look forward to

vision. In the remainder of the Report we will provide a

collaborating on delivering deep impact with deep tech in

deep dive on how we think about impact for our individual

the years to come.

portfolio companies as well as the Technology Impact Fund (TIF) as a whole. While many of these impacts may

Sincerely,

not be readily apparent for years, we want to show our

Dipender Saluja & Ion Yadigaroglu

intentionality towards achieving impact by sharing details on our approach to impact management and introducing a customized impact assessment framework.

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introduction to the technology impact fund The Technology Impact Fund was created to build on

TIF and TIGF have invested in technology companies

Capricorn’s legacy making early-stage investments in

across three impact themes:

successful deep tech companies. Historically, Capricorn only had a handful of LPs due to the concentrated nature of the firm. But as the full scope of the need and opportunity for innovative technological solutions to our shared sustainability challenges came into sharper focus, we made the decision to launch a specialized venture capital

The Electrified Future

New technologies moving the world toward safer, cheaper, more reliable, and cleaner energy and transportation solutions

Foundational Infrastructure

fund to continue our investment activities in a structure that

Scalable, breakthrough innovations enabling the next level of human connectivity, awareness and sustainability

could include more investors.

Impact Intelligence

As a standalone fund, TIF was launched in 2017 with capital commitments from over 45 LPs. As of December 2020, TIF has made investments across 12 portfolio companies. As a complementary investment vehicle, we also launched the Technology Impact Growth Fund (TIGF) to provide follow-on financing for select TIF and TIGF Legacy portfolio companies. As of December 2020, TIGF has made investments across 6 portfolio companies.

Data collection at scale making change visible, predictable and actionable

These themes collectively represent the intersection of Capricorn’s technology expertise and the key sectors driving the transition to a more sustainable world. On pages 19-37, we provide more detail on each of the themes along with case studies on how we contribute to the growth of our portfolio companies and our long-term vision for achieving deep impact with deep tech.


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foundational infrastructure Scalable, breakthrough innovations enabling the next level of human connectivity, awareness and sustainability

the electrified future

IT Hardware

New technologies moving the world toward safer, cheaper, more reliable, and cleaner energy and transportation solutions

impact INTELLIGENCE

Power

Data collection at scale making change visible, predictable and actionable Efficiency

Sensors

Storage Earth Observation

Health-Tech

Transportation

*TIGF companies **Joby is in both TIF and TIGF.

de e p valley labs Deep Valley Labs is a venture laboratory created to address a gap in the pipeline of venture capital funding by creating an environment where new startup ideas can be tried and tested prior to a Series A round. TIF invested in Deep Valley Labs in 2018 to help build this ecosystem and foster the next generation of deep tech companies.


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capricorn's history of impact Capricorn has a 16-year history of making impact

catalyze positive social and environmental outcomes

investments. As a diversified investment firm with a mission

through distinct “contribution pathways” (Activation,

“to pursue extraordinary investment results by leveraging

Alignment, and Amplification) that guide each of our

market forces to scale solutions to global problems,”

venture investments.

investment decisions are made through the lens of financial as well as social and environmental returns across a range of asset classes and strategies. As we put this mission into action through venture capital as an asset class, we developed a core expertise and a focus on specific sectors best defined as “deep tech”—or companies working on the next generation of technological innovations and breakthroughs. For example, this included companies reimagining satellite imaging (Planet) and revolutionizing energy storage (QuantumScape).

Contri bution pathways

Activation

Early-stage investments provide the essential resources for company formation.

Alignment

Hands-on, long-term partnership and oversight to help build sustainable businesses.

Amplification

Capricorn’s networks fast-track access to opportunities for growth.

Today, Capricorn is a mission-aligned investment firm operating at scale, with more than $7.5 billion in client

These pathways were developed to provide a simple and

assets under management as of December 2020, of which

compelling framework for bringing additional structure

approximately $4 billion is in venture capital investments.

and consistency to the way Capricorn’s distinctive role

In addition to managing multi-asset class portfolios for

in the growth of our portfolio companies is defined. The

families, foundations and institutional investors, Capricorn

‘Activation’ pathway describes how Capricorn provides

has created multiple investment partnerships that focus

essential financing to allow early-stage companies to get

on specific areas of impact or sustainability. TIF and TIGF

off the ground and also helps to bring together investor

are two of these partnerships. Another is the Sustainable

syndicates for early funding rounds, paving the way for

Investors Fund (SIF), which invests in new impact-oriented

future institutional investment. The ‘Alignment’ pathway

fund managers.

articulates how portfolio companies benefit from Capricorn’s deep technical expertise and commitment to being a

These sectors are where we focus Capricorn’s resources—

hands-on, long-term partner, often with representation

both financial capital and human capital—and where

on a company’s Board. And the ‘Amplification’ pathway

we bring specialized knowledge and the ability to

describes how Capricorn always looks for opportunities to


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to grow the business and maximize impacts by leveraging our extensive networks. The pathways resemble but also extend the elements that characterize the venture capital investment model. We view our role as more than just helping companies succeed

legacy i nvestm e nts

financially­—we also want to make sure they are operating as responsible stewards of people and the planet. That’s

2006

why we specifically focus on businesses for which

Tesla

financial and impact success are naturally aligned. Each conversation we have with a portfolio company is therefore another opportunity to embed an impact mindset into their long-term planning and strategic decision-making. This includes asking company management potentially difficult questions about the unintended impacts of their business, and connecting key executives to industry partners with specialized expertise in different aspects of sustainability. The mini case studies on the following pages describe Capricorn’s work with three legacy portfolio companies. Capricorn also brings a systemic perspective within our investment themes, and as a part of our experience with impact investing. Over the years we have participated actively with nonprofits, governments and corporate entities—including B Lab, Ceres, EDF, GCEEP, GIIN, PRI, WEF, Cyclotron Road, and Prime Coalition, among others—

Capricorn was an early investor in Tesla, making a Series C investment in 2006 at a time when few people had given much thought to the idea of electric vehicles (EVs). We saw the potential for Tesla to revolutionize both transportation and energy storage, and made an impact investment with the goal of moving our transportation systems towards an emissions-free model. Nearly 15 years later, that vision has been rewarded multiple times over with Tesla emerging as a dominant player in the market for electric vehicles, and providing a wake-up call to leaders across the automotive industry who now unanimously acknowledge that electrification is the future of the industry. A recent report from Bloomberg NEF reinforces this futuristic vision, with EVs expected to make up more than half of all global car sales by 2040.

providing ongoing opportunities for learning, sharing and collaboration. We build on this network through constant interactions and conversations with our friends and peers across the investment, technology and government realms. By focusing on the systems we know best within the deep tech sector, Capricorn has been able to better optimize for the impact of our investments, ensuring that portfolio companies are positioned for both long-term financial success and deep impact. We look forward to building on our legacy as an impact investor with both TIF and TIGF.

Tesla has sold almost a million vehicles to date, making it the world’s largest electric automaker.

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2010

2014

Appli e d Solar tech nologi es

ki n estral tech nologi es

Capricorn

Solar

Capricorn made a Series B

Technologies (AST) in 2010 during a

investment in Kinestral, which

Series B round. We were drawn to AST’s

makes electrochromic ‘smart glass’ windows to help

vision of providing off-grid and hybrid solar energy to

reduce

telecom towers in India, South Asia and Africa, helping

improving lighting and occupant wellbeing. According

these regions leapfrog to renewable energy. According

to the International Energy Agency, buildings and their

to a recent report published in the Journal of Cleaner

construction currently account for 36% of energy use

Production,

Communications

and nearly 40% of all CO2 emissions. Since 2014, we

Technology (ICT) sector was responsible for an estimated

have worked closely with the Kinestral management and

3-3.5% of global greenhouse gas emissions in 2020,

engineering teams to bring this breakthrough technology

of which communication networks like telecom towers

into the mainstream. As Kinestral has grown, we have

accounted for about 24%. Recognizing the challenges

continued to provide capital and guidance on how to

of bringing this impact vision to scale, we were able to

maximize the company’s net impact and deliver energy-

provide deep domain expertise and an established global

saving windows to buildings around the world.

invested

the

in

Applied

Information

and

energy

consumption

in

buildings

while

network, supporting AST’s vision to create a cleaner, more reliable industry.

AST has over 13,000 sites that the company is converting to solar and battery hybrid electricity.

Kinestral’s smart glass windows reduce a building’s energy consumption by 10-20%, across a range of climates.


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impact management in deep tech Capricorn has developed a customized framework to assess the impact of each portfolio company in the Technology Impact Fund. This framework represents the formalization of an approach we’ve been practicing over the years and was developed in partnership with Tideline, an impact investing consultant, drawing on leading industry standards such as the Impact Management Project (IMP), IRIS+ and the UN Sustainable Development Goals (SDGs). The framework also builds on Capricorn’s experience with the GIIRS rating system, which helped guide and inform our early impact investment activities and played an important role in our impact investing journey. The framework contains two key tools that, together with the theme-level impact theses featured later in this report, help us understand the impact characteristics of the TIF portfolio.

1

The Impact DNA assessment brings clarity, comparability, and balance to the analysis of each portfolio company by integrating with the IMP’s five dimensions of impact.

2 The Impact Roadmap comprises four consistent steps for articulating the growing maturity of an impactful business, helping to position each company at the right stage on the journey and to instill impact management discipline over time. On the following pages we introduce these frameworks in more detail and welcome other investors making impact investments at an early stage to adopt them as well.

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impact DNA Assessment The Impact DNA assessment offers a multifaceted

These assessments are qualitative and are not intended to

overview of each portfolio company’s core impact

delineate between a good or bad investment; instead, they

characteristics. Using the IMP framework as a guide, we

capture our early, concerted efforts to understand where

have defined six building blocks of Impact DNA against

each company is positioned to best achieve its intended

which each portfolio company can be assessed. These

impact outcomes. As well as bringing a distinct impact

building blocks are designed to generate a holistic picture of

lens, these building blocks also help us and our portfolio

that company’s role in creating impact, vis-à-vis the system

companies to make better business decisions. For example,

in which it operates (‘Impact Purpose’) and the key risks to

a company that is addressing an acute ‘Challenge’ instead

achieving the impact they aspire to (‘Impact Performance’).

of an emerging one may need to reach scale more quickly,

Impact Purpose Challenge IMP Alignment

Key Question

What What is the urgency of the social or environmental challenge being addressed?

What role do the company’s products/services play in creating impact? Direct

Emerging

Acute: The challenge is pressing today, with material negative effects experienced by a defined stakeholder group (or the planet) Emerging: The challenge is less urgent today, though could become critical in coming decades

Beneficiary Who

What

Acute

Legend

Proximity

How Much

Who are the primary stakeholders experiencing the outcome? People

Enabling

Direct: The company’s products/services directly create impact for beneficiaries Enabling: The company’s products/services provide a platform which enables others to deliver impact

Disruption

How does the company’s impact approach change the status quo? New

Planet

Upgrade

People: Humans are the primary beneficiaries of the impact generated by the company’s products/ services

New: The company creates impact in substantially new and previously unexplored forms

Planet: The planet (i.e. the natural environment / climate system) is the primary beneficiary of the impact generated by the company’s products/ services

Upgrade: The impact generated is similar in nature to that of other products/services in the market, but with substantial improvements in scale and/or depth


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while a company that ‘Benefits’ people more than the planet

involved in producing sensitive data face the constant

may need a direct-to-consumer strategy to maximize its

risk of that information falling into the wrong hands and

potential. These nuances are important to understand the

being used for malevolent purposes. Similarly, companies

full scope of potential opportunities and challenges across

involved in renewable energy and storage rely on certain

our portfolio.

natural resources like lithium and cobalt, which may not always be responsibly sourced. By proactively assessing

This Impact DNA tool is especially helpful in allowing us to

these risks early on, we are better positioned to mitigate

think about impact risks and the potential negative effects of

them through engagement with our portfolio companies on

some of our portfolio companies. For example, companies

particular issues.

Impact Performance

This tool will also form the basis for an ex-ante assessment

Delivery

process that enables analysis of impact performance over

Effects

Risk

Lower

One of the first things we learned through the exercise of

What is the likelihood that significant unintended negative impact is created?

Lower: Company is likely to deliver on its impact goals Higher: There is substantial uncertainty around the company’s ability to deliver on its impact goals

mapping the Impact DNA of companies was that there is variance throughout the TIF portfolio—both portfolio-wide and within specific impact themes. This illustrates the diversity in impact modalities and helps to solidify our

Lower Higher

We see the DNA framework as part of a continuous learning time and relative to expectations.

Risk

What is the likelihood that activities do not deliver the desired impact?

of expected impact, for use in the due diligence process.

understanding that there are many approaches companies Higher

Lower: Low likelihood that significant unintended negative impact is created Higher: High likelihood that significant unintended negative impact is created

can and should take to tackle complex problems and contribute to systems change. We know that future refinements of the framework and regular portfolio company monitoring and engagement will allow us to learn and iterate on this framework, ensuring its relevance for years to come.

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IMPACT Roadmap The Impact Roadmap is a natural complement to the DNA framework, providing actionable guidance for how each portfolio company can take the next step in its impact journey. The four ‘Impact Stages’ are: Impact Vision, Impact Goal-Setting, Impact Traction, and Impact Acceleration. Collectively, these four stages represent the typical evolution of a company from ideation all the way through to commercial scale and beyond. As a company

Scale

progresses along this roadmap, its impact thesis and

Impact Acceleration

4

Bringing more discipline to impact measurement and management practices as the enterprise scales

impact management processes necessarily also evolve.

Go-to-Market

3

Impact Traction Integrating early customer/beneficiary feedback and input to help ensure intended outputs are produced as expected

Concept Validation

2

Impact Goal-Setting Connecting a product/service to a specific, prospectively measurable impact outcome for a certain beneficiary (people or planet)

Concept Development

1

Impact Vision Considering the range of social or environmental benefits that could arise from the core product/service

Enterprise Stage

Impact Stage


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This Roadmap is important because it allows us to put

Ultimately, we are focused on picking the best entrepreneurs

impact measurement and management on the agenda for

and helping them succeed. To the extent that impact

portfolio companies throughout their growth journey. Of

considerations play into that success story, we are of

course, different impact stages demand different treatment.

course thoughtful in driving companies in that direction.

A company that is still pre-revenue faces different impact

However, we also know that it’s impossible to steer while

considerations than a company that has its products in

standing still, meaning it’s impossible to guide a company

millions of homes. By accounting for these differences in

towards one or more impacts if the business isn’t growing.

a thoughtful way, the Impact Roadmap provides a way to

To address this obstacle, we take a steering-while-moving

keep social and environmental impacts front and center

approach that allows us to take potential positive and

throughout a business’ lifecycle.

negative impacts into account as each company grows and scales. We believe this collaborative, growth-first approach

Another nuance with the Roadmap is that while companies

is what is needed to help our portfolio companies succeed

typically move through the stages sequentially over time,

in fulfilling their impact vision.

the framework is not strictly linear—some companies may cycle back to earlier stages as they learn, iterate,

Already, several companies have made significant progress

and recalibrate their impact narratives. Looping back to

in their growth journeys and informed how we think about

an earlier impact stage is a natural part of a company’s

impact management. We plan to continue to refine this

development. In fact, we believe this form of constant self-

impact management framework in the months and years

reflection and self-evaluation demonstrates adaptability,

ahead as our portfolio develops and as the impact investing

humility, and a commitment to continuous learning.

field evolves.

In developing the Roadmap, we wanted to acknowledge the inherent challenges of impact management in a venture capital context, since many VC-backed companies may not be able to provide historical impact data. However, we maintain that every business—no matter how young or small—has an impact, and it is our responsibility as an investor to embed an impact-conscious DNA into each portfolio company.

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Portfolio snapshot the electrified future

Overview Sector

Company

Description

Helion is developing the first commercial fusion power plant Power

Navitas is delivering the next generation of high-performance GaN-based power electronics Form is developing long-duration utility-scale energy storage systems to replace coal power plants around the world QuantumScape is creating high-performance, low cost, solid-state batteries

Storage

SPAN is reinventing the electrical panel to enable faster adoption of clean energy, including solar, storage, and electric vehicles Joby Aviation is building fully-electric VTOL aircraft for aerial transportation

foundational infrastructure

Transportation

Kinestral is developing smart glass products which enable dynamic control of heat and light transmission

Efficiency

Redwood is developing large scale battery recycling to reduce the footprint and cost of raw materials SummerBio is scaling high throughput robotics for low cost COVID and other disease diagnostics

Health-Tech

Innovium is building high performance, energy efficient, open source disaggregated networking products Nuvia is creating a high-performance and low-power next generation data center server chip

IT Hardware

Impact Intelligence

Raxium is developing highly efficient, monolithically integrated RGB micro-LED displays Planet is deploying satellite constellation and analytics to provide a searchable repository of data on the changing planet Saildrone is deploying a fleet of autonomous ocean surface vehicles, measuring oceanographic and atmospheric variables

Earth Observation

SpaceX is building a fully reliable and reusable space lift system and a global high-speed communication network InSyte is developing powerful gas spectrometry systems to enable incorporating the sense of “smell” in all electronic devices

Sensors *TIGF companies **Joby is in both TIF and TIGF.


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IMPACT DNA Impact Purpose Challenge

Acute

Emerging

Proximity

Direct

Enabling

Impact Performance

Beneficiary

People

Planet

Disruption

New

Upgrade

Delivery

Lower

Higher

Effects

Lower

Higher

Impact Stage

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 NOTE: TIF has also made an investment in a startup incubator called Deep Valley Labs, which is not classified as a portfolio company investment and has been excluded from the analysis within this report.


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IMPACT notes Company

Description

Helion’s plasma accelerator technology is three orders of magnitude smaller and can be commercialized an order of magnitude faster than any other fusion competitor. Navitas’ GaN-powered chip can provide up to 40% increase in energy efficiency and a 3X increase in power density, at a lower cost. Form’s batteries provide ultra-low cost energy storage capacity and can discharge at their rated full power for over 100 hours, allowing for cost-effective integration of 100% renewables into the grid. QuantumScape accelerates the transition to electric vehicles by creating a new class of solid state batteries that closes the gap between combustion engines and electric drive trains. SPAN’s smart panel will enable rapid adoption of renewable energy, aiming to deliver reductions of half a gigaton of CO2 per year in a decade. Joby Aviation aims to save a billion people an hour a day with best in class safety, energy efficiency and costs. Kinestral’s smart glass can reduce a building’s energy consumption by up to 10-20% across a range of climates and improve comfort inside. Redwood’s technique can recover up to 98% of the nickel, cobalt, copper, aluminium as well as the lithium and graphite in a lithium-ion battery. A single SummerBio robotic diagnostic system can perform tens of thousands of COVID tests per day at a fraction of the current price. Innovium’s Teralynx chips enable highest performance data center networks with over 2X performance per watt. Nuvia’s data center server chip could more than double the performance, or cut the energy consumption by half. Raxium’s monolithic MicroLED technology increases display pixel density by >300X and increases brightness by >1000X. Planet’s satellites image the earth’s surface every day. Saildrone is deploying 1000 saildrones for global coverage, enabling realtime quantification of the planet’s heat and carbon budgets. To date, SpaceX has launched 895 satellites as part of its Starlink constellation, and plans to add thousands more in the coming years with the aim of delivering universal internet access. InSyte’s gas spectrometry sensor is small and power-efficient enough to be integrated into smartphones, consumer home electronics and industrial applications. *TIGF companies **Joby is in both TIF and TIGF.


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IMPACT themes Each of our three impact themes is built around a central idea—how breakthrough technological innovation can help address social and/or environmental problems. Whether the goal is to make renewable energy more affordable and accessible or to make the built environment more efficient, functional and sustainable, technology plays a central role. On the following pages we provide some additional context about how we think about each of these themes, with specific case studies to help articulate what we look for in an impact investment and how we work with our portfolio companies to ensure that impact considerations remain front and center as a company matures.

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the electrified future

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T E C H N O L O G Y

NEW TECHNOLOGIES MOVING THE WORLD TOWARD SAFER, CHEAPER, MORE RELIABLE, AND CLEANER ENERGY AND TRANSPORTATION SOLUTIONS

I M P A C T

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Every study on the climate crisis makes one thing

On the following pages we will share additional information

clear—we need a transition from a fossil fuel-powered

about the ‘Electrified Future’ portion of the TIF and TIGF

economy to a renewable energy economy. But completing

portfolios, which includes companies with diverse Impact

this transition is a complicated endeavor that requires

DNA profiles operating in the Power, Storage, and

significant technological advances. To take the next step in

Transportation sectors.

the renewables revolution and bring these technologies to scale, we need to change how we acquire, distribute and

From Form Energy, which is developing long-duration

share energy. In short, we need to electrify our future.

utility-scale energy storage systems, to SPAN, which is commercializing a smart electrical panel for enabling

The significant progress made to date on renewables would

the scale-up of residential solar and battery adoption,

not have been possible without several technological

integration and installation, our portfolio companies, which

innovations that made renewable energy cheaper, safer,

our Impact DNA analysis shows are for the most part

more accessible and more reliable. From more efficient

directly benefiting both people and the planet, are bringing

photovoltaic cells to cheaper batteries, each innovation

the electrified future closer.

helped move the world away from a fossil fuel economy and towards a clean energy economy, creating millions of

We invested in these companies because they fill a critical

jobs and economic opportunities in the process.

market need and have the potential to create significant social and environmental impacts. We see this portion of our

Now we are focused on the next chapter in the renewables story. To meet the urgency of the climate crisis, we will need billions of solar panels, countless wind farms and hundreds of millions of electric vehicles. Bringing these products and solutions to scale will require a complex value chain of raw materials like lithium and cobalt, storage solutions like batteries, distribution solutions like smart grids, and consumer solutions like smart homes, appliances and transportation. We look for technology companies operating at the center of this value chain—the fuel powering the renewables revolution.

portfolio as directly aligned with two specific SDG targets: Target 7.2

Increase substantially the share of renewable energy in the global energy mix

Target 11.2

Provide access to safe, affordable, accessible and sustainable transport systems for all

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the electrified future

New technologies moving the world toward safer, cheaper, more reliable, and cleaner energy and transportation solutions.

Company Ac Power

Develop the first commercial fusion power plant

Deliver the next generation of highperformance GaN-based power electronics

P

High

Faster

Storage

Develop long-duration utility-scale energy storage systems

Create high-performance, low cost, solid-state batteries

Commercia

Enabling glo electricity sup

Increased energ longer range and

Improved battery s

Widespread adopti

Commercialize a smart electrical panel to enable faster adoption of clean energy

Adoption of solar, stora

Decrease fossil fuel depen home electrification

Transportation

Build fully-electric VTOL aircraft Busine ss A sU su

Ubiquitous, emission-free air transport

*TIGF companies **Joby Aviation is in both TIF and TIGF.

al Energy on demand—low percentage of renewables

Renewable energy generation stagnan and gas vehicles dominate the global m


Target 7.2

Increase substantially the share of renewable energy in the global energy mix

Target 11.2

Provide access to safe, affordable, accessible and sustainable transport systems for all

Activities

Outputs/Outcomes

Impacts

Low-cost, and zero-carbon electricity Safe and decentralized power generation

Power the shift to the “electrification of everything”

Higher power density and greater energy savings alongside an increased share of clean energy in the global energy mix

her power density and greater energy savings

r charging for mobile devices

alization of long-duration storage batteries

obal decarbonization of the pply

gy and power density, thus enabling d faster charge times

safety

Climate change mitigation through reduced reliance on combustion engines and an increase in the availability of renewable, carbon-free power sources

ion of EVs

age and EVs at scale

ndency through

t

nt at 18% market

Climate change mitigation through reduced congestion and transport-related carbon emissions leading to increased human productivity and well-being

Slow pace of transition away from fossil fuels continues to be a major contributor to climate change


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t a k i n g f l i g h t w i t h e l e c t r i c r i d e s h a r e

joby aviation Challenge

Proximity

Beneficiary

Disruption

Delivery

Effects

Impact Stage

1 2 3 4 Acute

Emerging

Direct

Enabling

People

Planet

New

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Joby Aviation is a California-based aerospace company developing all-electric aircraft, aerial ridesharing and logistics solutions. They intend for their vertical take-off and landing aircraft to operate as a fast, quiet and clean air taxi service as early as 2024. By moving trips from the ground to the sky, their vision to ‘save a billion people an hour a day’ will be realized through the zero operating emissions, four passenger, piloted aircraft they have been working to develop for the past decade. Joby is a vertically integrated company that not only designs and builds the majority of the components for the aircraft, but also intends to operate the aircraft themselves, with professionally-trained and licensed pilots. As well as ensuring that every part of the Joby product is centered around the customer experience, vertical integration has a second benefit – a more efficient, resilient and responsive supply chain that is well insulated against unexpected market disruptions like COVID-19.

Capricorn’s Contribution We were excited to head Joby’s Series A investment round and, in doing so, became the first institutional investor to put their confidence in this vision for the future. We were

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later able to help create a syndicate of investors, thereby helping to catalyze the growth of the company. It was clear from our first meeting that Capricorn and Joby shared a vision for the future of our planet, with a strong focus on delivering technology that would benefit both people and the environment. With the potential to positively affect the journeys of millions of travelers, we’ve been keen to support Joby in managing the various challenges that come with introducing pioneering technology.

"Th e support we have rece ive d from Capricorn has (lite rally) h e lpe d our vision take flight. As th e fi rst i nstitutional i nvestor to back us, th ey have playe d a leadi ng role i n bri ngi ng th is tech nology i nto th e spotlight an d h e lpi ng grow Joby i nto th e com pany it is today." JoeBen Bevirt Joby Founder & CEO


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Navigating regulatory uncertainty is one area where we’ve been able to particularly support the business, building on the relationships we have built at the local and federal level as well as the experiences we have gained supporting companies like Tesla and SpaceX. As Joby has assembled a team of world-class experts to keep ahead of the range of policy and regulatory issues around the globe, we’ve been able to help them anticipate future challenges and work alongside regulators. Another area where our vision has aligned with Joby’s is in the need to ensure their technology doesn’t exacerbate inequality by offering a product that is only available to a narrow, wealthy population. From the outset, Joby has been dedicated to democratizing this form of transport and we will be working closely with them to support growing access to the service through strategic partnerships, technological innovations and efficiencies of scale, helping ever more consumers to access their services on a regular basis.

Joby’s prototype 5-seater electric VTOL aircraft

Electric vehicles (EVs) are predicted to represent just 31% of all cars on the road in 2040, according to a report from Bloomberg NEF. This presents an opportunity for EVs and electric air taxis to work together to shift society’s current reliance away from fossil fuels. While electric air taxis will depend on much of the same new infrastructure as EVs —charging stations in particular—these vehicles have a key market advantage in that they can also piggyback on existing infrastructure like airports and helipads. This means there will be less upfront costs to get air taxis flying, allowing for faster market adoption. A secondary but still important benefit is the potential for increased human productivity and well-being. New modes of transportation have done as much as any technology to advance human civilization, making it easier for people to travel and congregate, whether for work or leisure. Cars, trains and airplanes all represented

The Joby team in front of an electric VTOL aircraft.

Vision for Deep Impact

significant leaps forward, driving economic development and increasing quality of life. Electric air taxis represent the next stepchange, allowing people to travel further and faster. That means more access to job opportunities and

Flying cars are a standard trope in sci-fi films, offering

essential services, more time with friends and family, and

a peek at a future when transportation is fast, simple

more ways to explore and experience local communities,

and efficient. Joby is bringing this future to reality. While

while maintaining the peace of mind that we’re protecting

widespread adoption of electric air taxis will take time, even

our planet.

a small shift towards electric air taxis could have significant positive impacts for the climate and for society.

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foundational infrastructure SCALABLE, BREAKTHROUGH INNOVATIONS ENABLING THE NEXT LEVEL OF HUMAN CONNECTIVITY, AWARENESS AND SUSTAINABILITY

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TIF’s second impact theme is focused on the technology

in the IT Hardware, Efficiency, and Health-tech sectors.

infrastructure necessary to build and maintain a more

There are many similarities in impact characteristics within

sustainable world.

sectors—for example, our Impact DNA analysis shows that companies in the IT Hardware sector are more likely to

Everyone recognizes the importance of basic infrastructure

enable impact, rather than creating it directly.

like roads, bridges and railroads to maintain a vibrant and well-functioning society. But just as important as

From Nuvia, creators of high-performance data center

physical infrastructure made of steel and cement is

server chips that will make data centers more powerful and

technological infrastructure made of semiconductors,

energy efficient, to Raxium, which is developing monolithic

batteries, displays, and sensors. For example, the rapid

micro-LED displays to make next-generation displays

shift from landlines to wireless phones to smartphones

more powerful and energy efficient, companies in this

would not have been possible without advancements

theme all contribute to building a better connected and

in telecommunications technology (e.g.,GPS satellites,

more sustainable future. We see this portion of our portfolio

fiber-optic cables, WiFi) that made connecting to each

as directly aligned with two specific SDG targets:

other easier and more efficient. As we now shift to a more digital world, we need more

Target 9.5

scale of technological innovations. We need to build

Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries

on the progress made to date by investing in the next

Target 12.2

digital infrastructure that can support the growth and

generation of computing, communications, and data center infrastructure, the core components of which must be fast, safe, reliable and energy-efficient. In other words, they need to be built for the future. On the following pages we will share additional information about the ‘Foundational Infrastructure’ portion of the TIF and TIGF portfolios, which includes companies operating

Achieve the sustainable management and efficient use of natural resources

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foundational infrastructure Scalable, breakthrough innovations enabling the next level of human connectivity, awareness and sustainability.

Company Act IT Hardware

Build high performance, energy efficient, open source disaggregated networking products

Create a high-performance and lowpower next generation server chip

Develop monolithically integrated RGB micro-LED displays

Impro compu

Improvem reduction in

Enable mass ad

Enable 5X reduc

Enable high-reso

Efficiency

Develop smart glass products which enable dynamic control of heat and light transmission

Large scale battery recycling to reduce the footprint and cost of raw materials Health-Tech

Develop high throughput robotic systems to scale COVID and other diagnostic testing Busine ss A sU su

Improved energy effi Increased exposure occupant wellbeing

Reduced cost of materials

Massive reduction in logistic mental impact of battery produ

Low cost, high volume, fast turnarou

Ubiquitous and affordable availability of d tests around the world

*TIGF companies

al Cost of accessing mobile-cellular networks and mobile-broadband Internet remains too high for many

Rate of natural resource extraction projected to grow to 190 billion me by 2060


Target 9.5

Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries

Target 12.2 Achieve the sustainable management and efficient use of natural resources

tivities

Outputs/Outcomes

Impacts

Breakthrough network scalability Performance and insights to fuel modern data centers Price and energy performance

oved performance and energy efficiency for uting and data centers

ment in virtual human interaction leading to n dependence on global travel

Reduction in the energy consumption of computing, addressing concerns about data center power consumption and energy efficiency

Improvement in virtual human interaction to near in-person quality, leading to dramatic reduction in the carbon footprint of global travel

doption of AR and VR

ction in display power consumption

olution 3D displays without eyewear

fficiency of the built environment to natural light promotes

s

Shift in energy and material usage in the built environment leads to more sustainable cities, healthier people, and climate change mitigation

cs, cycle time and environuction

und COVID-19 test

diagnostic

n is etric tons

Mitigation of health, social, and economic consequences of the COVID-19 pandemic

Current material needs lead to over-extraction of resources while disadvantaged and at-risk groups remain less likely to have access to technology


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A t t h e C e n t e r o f B a t t e r y R e c y c l i n g

redwood materials Challenge

Proximity

Beneficiary

Disruption

Delivery

Effects

Impact Stage

1 2 3 4 Acute

Emerging

Direct

Enabling

People

Planet

New

Redwood Materials is a breakthrough technology company that has developed a process for the recycling, remanufacturing and reusing of lithium ion batteries, particularly the those used in electric vehicles and consumer electronics. By improving battery recycling processes for the sustainable and efficient reuse of materials, Redwood is helping make electric vehicles, smart grids and consumer electronics

more

sustainable

and

affordable.

This

technological development not only enables the transition to renewable energy, it also creates circular supply chains that reduce waste and cut down the cost as well as the social and environmental impact of making new batteries. In short, Redwood is getting ahead of the potential battery waste problem before there even is a problem.

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recycling the millions of batteries that will be needed to power everything from electric vehicles to smart homes to basic appliances. We were particularly drawn to the quality of the leadership team, which included JB Straubel, the Co-Founder and CTO of Tesla and Kevin Kassekert, Tesla’s VP of People and Places who led the Gigafactory project. We know from experience that when entrepreneurs try to operate at such a level of skill, scale and speed, being supported by knowledgeable co-conspirators is critical to maintain momentum. We brought this collaborative mindset to Redwood, working with the executive team to provide a valuable third-party opinion, reduce myopia, and augment skills and capabilities wherever needed.

In the first year of operations, Redwood received about 2GWh worth of batteries from partners like Panasonic, representing the equivalent of about 30,000 cars or 60 tons of batteries. The company has plans to scale rapidly over the next few years.

Capricorn’s Contribution Capricorn co-led the first funding round into Redwood with Breakthrough Energy Ventures (BEV) in early 2020, drawn by the company’s mission to “invent sustainable materials to build the world.” Like Redwood’s founders, we recognized the inherent challenges of producing and Redwood co-founder and CEO JB Straubel


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Given our familiarity with Tesla and battery technology, we made ideal partners for the Redwood team and continue to be engaged at the board level. This includes support negotiating partnerships with other technology companies. For example, Redwood has an agreement with electronics giant Panasonic to recycle discarded consumer electronics into raw materials like cobalt, nickel and lithium, which can then be used to make new products. Redwood also received an investment as part of Amazon’s $2 billion Climate Pledge Fund and will be able to offer Amazon sustainable ways to recycle EV batteries and e-waste from Amazon’s various operations.

"Capricorn has a track record of partn e ri ng to bui ld a sustai nable future an d we're th ri lle d to have th e m i nvolve d at Re dwood as we work to create ci rcular supply chai ns, turn waste i nto profit an d solve th e e nvi ron m e ntal i m pacts of n ew products be fore th ey happe n." JB Straubel Redwood Materials Founder & CEO

Used batteries and accumulators

that power these vehicles. As more EV batteries reach the end of their lives, there needs to be a process for recycling those batteries into new batteries. This closed loop system promises to drastically reduce the cost of the next generation of batteries, in addition to solving social and environmental problems, thereby making EVs accessible to more people. The technology developed by Redwood shows that it is possible and cost-efficient to recycle almost all of the materials in expired batteries, taking something old and used and turning it into something new and useful. Redwood’s technique can already recover up to 98 percent of the nickel, cobalt, copper, aluminium as well as the lithium and graphite in a lithium-ion battery. Right now, the biggest customers for this technology are companies that both produce and demand millions of affordable batteries,

Vision for Deep Impact

like manufacturers of electric vehicles, stationary storage

The team behind Redwood shares an optimistic vision for

costs and increase sales for those companies.

a future dominated by renewable energy and sustainable cities, with a battery recycling plant placed right next to every battery manufacturing plant, and improved living conditions for much of the population. But for this vision to come to fruition, there is a need to transition from disposable to reusable materials. The challenge is matching the increased scale of manufacturing of EVs with the unmanufacturing of the batteries

and consumer electronics, which can help drive down

Eventually, it may be possible to eliminate new resource extraction for most materials, fulfilling the dream of a closed loop system. Recycled batteries represent one of the most important parts of a sustainable and circular economy. With Redwood sitting at the center of this circle, society will have the roots it needs to grow.

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IMPACT intelligence DATA COLLECTION AT SCALE MAKING CHANGE VISIBLE, PREDICTABLE AND ACTIONABLE

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The rise of deep tech as its own sector is thanks in large

On the following pages we will share additional information

part to continuous upgrades in computing power, making

about the ‘Impact Intelligence’ portion of the TIF and TIGF

it possible to collect, analyze and disseminate more data

portfolios, which includes companies operating in the

than ever.

Sensors and Earth Observation sectors.

We generate approximately 2.5 quintillion bytes of data per

For example, Planet is imaging the entire Earth every day

day, and 90% of all data has been produced in just the

to provide real-time information to scientists, governments,

last two years. But to improve decision-making, we need

commercial enterprises, farmers, humanitarian organiza-

to evolve from big data to smart data. This means using

tions, and companies about the changing planet. Mean-

advancements in technology to both identify new datasets

while, SpaceX is building a fully reliable and reusable space

and refine existing datasets with an eye to sustainability

lift system, substantially reducing the cost of launching sat-

and unprecedented levels of precision and detail.

ellites and making it possible for Starlink, a satellite constellation designed to provide universal internet access, to

Discovering new ways to make data more accurate, timely,

get off the ground. Despite their diversity in activities, the

reliable, actionable and accessible can have massive

companies in this theme have similar impact characteris-

ramifications for every part of our daily lives. Navigation

tics according to the Impact DNA assessment—their prod-

apps have transformed the daily commute, cross-country

ucts and services enable others to deliver positive impacts

road-trip, and even hiking trails by making it easier to

for both people and the planet. The more we understand

get from point A to point B. Satellite images can pick up

the world around us, the better chance we have of main-

changes in weather patterns, providing communities

taining a habitable planet and a sustainable society.

with enough advance notice to take precautions against potentially dangerous conditions. What will be possible

We see this portion of our portfolio as directly aligned with

with even better data?

one specific SDG target:

We are just scratching the surface of what insights can be gleaned from all the information created by our actions (and inactions). With the help of AI, machine learning and billions of sensors, we are able to analyze ever-greater amounts of data in a record amount of time. This data can be used to power technological advancements that few would have thought possible even a decade ago.

Target 13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

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impact intelligence

Data collection at scale making change visible, predictable and actionable.

Company Acti

Sensors

Develop a small, powerful gas spectrometry system Earth Observation

Deploy satellite constellation and analytics to provide a searchable repository of data on the changing planet

Deploy a fleet of autonomous surface vehicles, measuring oceanographic and atmospheric variables, to help quantify planetary health Build a fully reliable and reusable space lift system and a global highspeed communication network

Compreh satellite im

Searchable

Improving ocean enabling longer r

Quantifying fish s

Improved predictio ocean acidification

Operational satellite syst

Substantially reduced cost o Improved safety of space travel

Busine ss A sU su

al Prohibitively expensive and inefficient data collection

Proprietary information used b and governments to address lo


Target 13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

ivities

Outputs/Outcomes Ubiquitous air quality, chemical detection, and safety measurement

Low-cost chip as an “electronic nose”

Impacts Wide variety of potential benefits across human health, food safety, environmental management in residential and industrial settings

hensive, scientifically accurate, real-time magery

e maps and data sets

n and atmospheric numerical models, range, more accurate forecasts

stocks for sustainable fisheries

ons of atmospheric warming and

More informed, deliberate, and meaningful stewardship of the planet as the foundation for visible, accessible, and actionable global change

tem

of space access

by corporations ocalized issues

Fundamental impediments to data access and platform innovation threaten progress in addressing climate change


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saildrone Challenge

Proximity

Beneficiary

Disruption

Delivery

Effects

Impact Stage

1 2 3 4 Acute

Emerging

Direct

Enabling

People

Planet

New

Saildrone is an oceanographic data platform powered by a fleet of unmanned ocean-going vehicles called saildrones. At a time when much of the world’s oceans remain unmapped and unpatrolled, Saildrone presents a costeffective solution for ocean data collection at scale. For comparison, a typical oceanic research ship costs hundreds of millions of dollars to buy, plus $25,000 to $50,000 per day to operate. In contrast, Saildrone’s vehicles cost $2,500 per day to operate with zero upfront cost, with the added advantage of operating entirely on renewable energy. To date, Saildrone has launched approximately 100 vehicles,

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"We wouldn't be wh e re we are today i f it wasn't for Capricorn's large n etwork of com pan i es, non profits an d i n dustry expe rts. Than ks to th e i r re lationsh i ps, we we re able to con n ect with an e nte rprise partn e r that fun de d our fi rst major m ission i n th e M e dite rran ean." Richard Jenkins Saildrone Founder & CEO

each with a range of more than 16,000 nautical miles and

A big part of our role is providing access to the Capricorn

speeds of 2-8 knots. The company’s mission is to make the

network, particularly the various NGOs and government

ocean fully transparent, providing governments, research

agencies that represent future and current Saildrone clients

institutions and private companies with the insights needed

and partners. These connections provided Saildrone with

for more informed, deliberate and meaningful stewardship

the added credibility and experience necessary to take on

of the planet.

larger-scale assignments, including private sector projects.

Capricorn’s Contribution

We also focus on identifying the right applications for

Capricorn first invested in Saildrone in 2016 as part of

Saildrone recently worked with the National Oceanic and

a Series A round, and is now an active member of the

Atmospheric Administration (NOAA) to survey the nation’s

Saildrone board. We continue to work with the Saildrone

largest fishery in the Bering Sea and to monitor changing

team to proactively identify opportunities and address

weather and ocean conditions in the Arctic. Earlier in the

challenges, both from the business side and the impact side.

year, Saildrone signed a contract with the U.S. Coast

the data so that the technology can scale. For example,


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help scientists develop better climate models and help meteorologists predict weather patterns. This has a direct impact on people, since anticipating weather events like hurricanes or typhoons can help save millions of lives. Saildrone’s technology can also improve people’s lives by monitoring the oceans for overfishing, thereby protecting the livelihoods of fishermen and the millions who rely on seafood for sustenance. As another example, the autonomous drones can also monitor Two Saildrones operating on a recent US Coast Guard exercise to identify illegal fishing

Guard to support “critical Coast Guard missions to secure and safeguard the maritime domain” in remote regions of the Pacific Ocean. These examples offer a preview of the full potential of Saildrone’s technology, which could be used to help address everything from illegal fishing in international waters to destructive deep-sea mining. However, it’s also important to be proactive in thinking about potential unintended uses for the data, particularly if those uses are for nefarious purposes. We worked closely with Saildrone to put the necessary data protection systems in place, allowing the company to better focus on generating positive social and environmental impacts.

Vision for Deep Impact

the oceans for pollution like the dumping of chemicals or the spillage of plastic waste, giving scientists and environmental activists an extra leg up when it comes to defining the problem and coming up with a solution. Saildrone is at the center of significant scientific progress. The company has already completed two major missions: (1) surveying 3,200 nautical miles from the Atlantic to the Mediterranean to quantify ocean eddies and CO2 emission, and (2) sailing 8,000 nautical miles to complete the first autonomous circumnavigation of Antarctica. Future missions with a range of governments and research institutions are in the works. Saildrone’s long-term vision is to scale the technology to enable global, real-time coverage of the oceans, removing the guesswork and improving the accuracy of essential environmental data for the benefit of all humanity.

Saildrone embodies the many far-reaching possibilities of deep tech. Instead of creating a technology that solves one specific problem, Saildrone is helping to simultaneously solve multiple interconnected problems. One of these problems is climate change. While about 70% of the planet is covered by water, much of the ocean and seabed remain unmapped and undiscovered. This data gap is concerning given that 30% of carbon emissions get absorbed by the ocean, but nobody knows exactly where. By providing data and insights on changing temperatures and other climate variables in our oceans, Saildrone can

A Saildrone leaving San Franciso Bay en route to a mission in the Pacific

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the technology impact growth fund THE TECHNOLOGY IMPACT GROWTH FUND (TIGF) COMPLEMENTS OUR WORK ON TIF We launched the Technology Impact Growth Fund to provide follow-on financing for companies ready to scale with growth capital. In our existing portfolio of early-stage deep tech companies, we realized there would be attractive opportunities to make additional investments into these companies as they grow. TIGF provides a continuation vehicle for those investments, allowing us to support impactful companies as they mature and achieve scale. To date, we have invested in 6 portfolio companies through TIGF. Some of our TIF investors are also investors in TIGF. See our QuantumScape case study on the next page for a closer look at how TIGF works in practice.

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A b e t t e r b a t t e r y f o r a b e t t e r f u t u r e

quantumscape Challenge

Proximity

Beneficiary

Disruption

Delivery

Impact Stage

Effects

1 2 3 4 Acute

Emerging

Direct

Enabling

People

Planet

New

QuantumScape is a developer of solid-state lithium-metal batteries, which represent the next frontier of battery technology and energy storage. These batteries have the potential to offer higher energy density, improved power, a longer lifetime, better safety and lower costs than current lithium-ion technology. While battery technology has made substantial progress in recent years, many of the batteries used today are lithiumion batteries, which are heavy and need to be recharged frequently, thus degrading the battery and reducing its shelf life. In contrast, solid-state batteries have the potential to significantly improve on these shortcomings by offering a higher-performing battery at a lower cost. With a current focus primarily on transportation, QuantumScape is bringing us closer to a future where EVs are fully mainstreamed. With over 200 patents and applications to date, QuantumScape has developed its first prototypes that demonstrate key performance characteristics for the automotive application. QuantumScape’s long-term goal is to make a more efficient and affordable battery so that EVs can one day completely replace internal combustion vehicles on our roads.

Upgrade

Lower

Higher

Lower

Higher

Capricorn’s Contribution Capricorn first invested in QuantumScape in 2012 as part of a Series B round. Recognizing that QuantumScape’s technology would require a lengthy development period, our role as an investor was to be a guiding force in helping make the business commercially viable. As the technology scaled so did our investment, resulting in a follow-in investment through TIGF in 2018. In December 2020, QuantumScape started trading on the NYSE under the ticker symbol QS.

"Capricorn's unwave ri ng support has give n us th e con fi de nce to be able to move forward an d really focus on our m ission. Th ey truly are an exte nsion of our team, an d we're especially grate ful for Capricorn's gui dance an d support i n arrangi ng m e eti ngs with i nvestors an d i n dustry executives." Jagdeep Singh QuantumScape Founder & CEO


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Cell Mass-specific Energy (Wh/kg)

500 450 400

QuantumScape Energy Density

350 ies istr em Ch d e z iali erc mm Co

300 250

NCA3

NCA or Ni-rich NMC + Silicon / Carbon Anode

Energy-optimized Cell Designs

NMC

2

Source: Argonne National Laboratory; Management estimates

200 150 100

Lithium, iron, and phosphate Nickel, manganese, and cobalt Nickel, cobalt and aluminum

1

2

LFP1

300

3

400

500

600

700

800

900

1,000

1,100

Cell Volumetric Energy Density (Wh/L)

We have experience working with many companies whose

factories. Compared to the best batteries available today,

technology was not yet proven when we first invested,

QuantumScape’s solid-state batteries have the potential

from SpaceX’s reusable rockets to Joby’s electric VTOL

to be substantially cheaper, faster, longer-lasting and more

aircraft. But we believe in the vision of the management

efficient. This is especially important given that conventional

team and in the skill of the engineering team to bring the

lithium-ion batteries are reaching their physical limits,

technology to scale.

which means we need a step-shift in battery technology rather than an incremental shift to power the next stage of

We hope and expect this same story to repeat itself with

the sustainability revolution.

QuantumScape. We continue to work closely with the founders to plan for the long road by proactively anticipating

The potential of this step-shift is transformational. By

potential technological, financial or regulatory barriers. We

making electric vehicles cheaper, more efficient and more

are also helping introduce the QuantumScape team to the

accessible, QuantumScape’s battery technology has the

larger Capricorn network, which includes many executives

potential to significantly reduce global CO2 emissions

and entrepreneurs working on improving EVs, batteries

while simultaneously reducing the need for expensive and

and the supply chain between the two.

harmful resource extraction.

Vision for Deep Impact

QuantumScape has already received investments from

Solid-state lithium-metal batteries have been a glimmering symbol of hope for many technologists and engineers over the years. It would be hard to overstate the kind of deep impact this technology could have if successful. Imagine a not-too-distant future where just about everything is powered by batteries, from cars and trains to offices and

major auto companies like Volkswagen, many of whom are actively seeking a better alternative to existing lithium ion technology. The long-term vision for deep impact is to put a solid-state battery in every electric vehicle in the world. This vision, once fulfilled, will make the technological and cost impediments to broad EV adoption a distant memory.


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As we wrap up TIF’s first impact report, we would like

helping to position each company at the appropriate

to share a few closing thoughts about what we have

stage and to set expectations regarding the robustness of

learned and how we plan to make use of those lessons

their impact practices. Together, the Impact DNA and the

going forward.

Roadmap offer a disciplined way to manage for impact in a thoughtful and productive way.

First, we think it’s important to acknowledge the inherent challenges of managing for impact in a VC context. Most of

With that said, we know there is always more to do on both

the companies we work with are early-stage, pre-revenue

the impact and investment side of the equation. We plan

or have yet to prove their technological thesis. It is not

to continue to refine TIF’s impact assessment framework

always appropriate to be asking these companies to track

through regular conversations and engagements with

and report on impact metrics like carbon emissions saved

both our portfolio companies and other stakeholders

or jobs created when everyone’s focus is on getting the

like our LPs. No impact investing journey can ever be

business off the ground.

considered complete, and as we take this next step we hope our partners, investors, friends and colleagues will

However, despite these challenges, we have always been

also take a step with us. Among the next frontiers will be

consciously seeking to find ways to embed an impact

a collaborative effort to integrate and aggregate impact

DNA and mindset into our portfolio companies, without

performance data, aligning with current industry standards,

detracting from the primary goal of building the business.

and learning from and contributing to thought leadership in

We believe that the impact assessment framework

the impact investing field.

introduced in this report helps address this challenge by creating an initial concept for thinking and talking about

Ultimately, we hope this report can offer valuable lessons

impact across a variety of sectors, investment stages

for other VC and early-stage investors who care about

and companies.

impact and sustainability but are unsure of how to articulate their impact vision or formalize their impact approach. We

The Impact DNA framework helps bring clarity, comp-

are here to say that it is not only possible, but strongly

arability and balance to the analysis of each portfolio

advisable. By truly understanding and managing the

company through the lens of the IMP’s dimensions of

impact of our investments, we are better able to make a

impact. And the Impact Roadmap is a natural complement

deep impact on the world.

to the DNA framework because it succinctly describes a company’s journey as an impact-oriented business,

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