An investment collaborative created to mobilize capital for ready-to-scale climate tech startups has made a $22 million investment in Terra CO2, a green cement startup building its first commercial-scale production plant.
It’s the second investment by the All Aboard Coalition, which was launched last year by investor and former TED curator Chris Anderson and more than two dozen top climate tech investment firms to fill a funding gap for promising startups ready to scale. The coalition has raised $100 million towards a $300 million goal to coinvest alongside its investment firm members, which include Ara Partners, Clean Energy Ventures, Khosla Ventures and S2G Investments, among others.
The investment in Terra comes after coalition members Breakthrough Energy, Just Climate and GenZero in July backed the Golden, Colo.-based company’s $124.5 million Series B round. All Aboard coinvests when three or more of its members back a company. The additional funding brings Terra’s B round to $147 million, and will help it construct a low-carbon cement plant in Cleburne, Texas.
Cement contributes some 8% of global greenhouse gas emissions, but low-carbon solutions have proven difficult to scale. Terra produces a low-cost, low-carbon alternative to Portland Cement, as well as traditional replacements such as fly ash, a coal byproduct. The product, derived from abundant silicate from rocks, can replace up to 50% of Portland cement in standard concrete mixes, lowering carbon emissions by up to 70% and nitrogen oxide emissions by as much as 90% per ton of cement replaced. It is compatible with current production processes, so easy to plug in.
The Cleburne project, which broke ground in December, is expected to be the first plant of its kind operating at commercial scale in the US when completed.
“Terra is one of the only companies that has moved beyond the lab and built a commercially serious solution at a moment when the industry urgently needs one,” says All Aboard’s Jay Dessy. “Cleburne is the proof point this market has been waiting for.”
He added that All Aboard’s model “is designed exactly for this moment: where the technology is ready, the market need is acute, and what’s required is coordinated capital at commercial scale.”
Virtuous cycle
The All Aboard Coalition is looking at a broad swath of technologies that still carry a risk premium, from geothermal and nuclear energy to long-duration energy storage, carbon capture and marine decarbonization.
The co-investment approach is intended to meet a longtime challenge for climate tech companies: building their first or second commercial plant for what is often a brand new technology. Such first-of-kind deployments — or FOAKs, in industry parlance — typically require more capital than VC investors generally provide, and are considered too risky for banks and other commercial or growth investors. Financing a new plant also entails a more complex capital stack that may include debt and project finance.
An investment by All Aboard is intended to send a signal to other investors that the company is poised for breakthrough success.
In January, the coalition invested in Salt Lake City-based Zanskar, which uses AI to supercharge geothermal exploration and development. The investment was part of Zanskar’s $115 million Series C round to support the development of a multi-gigawatt pipeline of geothermal power plants in the western US.
In a sign that the All Aboard model is working as intended, Zanskar last month went on to secure up to $100 million in early project finance in a deal led by Just Climate and Spring Lane Capital.
The deal “creates a path for not only Zanksar but other geothermal developers and operators to scale this crucial source of clean, firm power at a time of rising energy demand and volatile supply and prices,” said Jason Scott of Spring Lane, an All Aboard Coalition member.
