When a plant, paper mill, or other industrial facility needs to separate different chemicals, it typically uses a lot of heat—processes that pump gigatons of carbon dioxide into the atmosphere. Shreya Dave, 32, and Brent Keller, 30, were graduate students at the Massachusetts Institute of Technology when they had an idea for a membrane that could do the job without all that energy use.
David Snydacker, 33, with a fresh Ph.D. from Northwestern University, came up with a cheaper and cleaner way to extract lithium, an element in great demand thanks to a boom in electric vehicles and other technologies that rely on lithium batteries.
These might be billion-dollar business ideas that could help arrest global warming. They also might never work. Figuring that out could take a decade or more, a time frame and risk level that turns off the deepest-pocketed capitalists. The result is that potential businesses with unproven, capital-intensive technologies can face a brick wall. Venture capital firms fund apps and software, not the new industrial innovations that will be needed to de-carbonize the world.
A small, six-year-old nonprofit thinks it has an answer. Some of the richest people and most influential philanthropists in the U.S. seem to agree. So far, Prime Coalition – whose seven full-time employees worked, until the pandemic hit, out of a WeWork in Cambridge, Massachusetts – has raised $76 million and counting for early-stage climate startups.
The source of this capital is unique: charitable vehicles like foundations and donor-advised funds, along with wealthy people who don’t mind risking some money to fight climate change. Prime’s backers include legendary investor and environmentalist Jeremy Grantham, Hollywood actors Will Smith and Jada Pinkett Smith, billionaire Orion Hindawi, the Packard Foundation, the Hewlett Foundation, and the Sierra Club Foundation. Nicole Systrom, wife of Instagram co-founder Kevin Systrom, is a board member.
Climate activism and dire warnings from scientists have convinced many investors that there might be money to be made on climate change. So far, however, the vast majority of dollars has flowed to proven technologies like solar, wind, and electric vehicles. A lack of government action of climate change is a “big problem” for startups with innovative technologies, said Bruce Usher, a professor and co-director of the Tamer Center for Social Enterprise at Columbia University. “It’s hard to invest in early-stage companies if you don’t know where the government stands on your industry in the future.”
To be eligible for Prime funding, startups must have the potential to mitigate a half gigaton—or 500 million tons—of CO₂ or the equivalent emissions by 2050. To make that easier to calculate, Prime helped develop software —called CRANE and unveiled this year— that anyone can use to estimate the long-term climate effects of technology innovations.
The idea for Prime came from its 35-year-old founder and executive director, Sarah Kearney. In grad school at MIT, she learned about a little-used part of the U.S. tax code that allowed foundations to use some of their endowments as “program-related investments.”
“I was very surprised that it was a tool that was relevant for foundation grantmakers and that I had never heard of it,” she said. While sometimes used to fund affordable housing, PRIs were almost unheard of in the world of scientific research.
With initial funding from four wealthy families, including the Smiths, she launched Prime in 2014 with the goal of leveraging the money sitting in U.S. foundations and other charitable vehicles -- more than $1 trillion at the beginning of 2020.