Richmond, California–based Moxion Power laid off 101 workers in June and shuttered its doors, following a wave of hype for its 75-kilowatt portable lithium-ion batteries that it hoped would replace diesel generators. The company attracted more than $110 million in funding from investors including Tamarack Global, Amazon, Microsoft, and Energy Impact Partners.
Lesson: Lithium-ion batteries continue to plunge down the cost curve, but they’re still not cheap enough to compete against generators powered by fossil fuel. Check your local movie set, construction site, or food truck’s current source of power for evidence.
In August, Swell Energy, a startup that aimed to aggregate networks of residential solar energy and battery installations into software-controlled “virtual power plants,” said it was shutting down its operations. The firm raised more than $150 million from investors including SoftBank, Greenbacker, and Ares Management. Swell’s collapse impacted a 1,200-person virtual power plant project on Oahu, Maui, and the island of Hawaii.
Lesson: Operational missteps aside, Swell faced a number of hard-to-overcome challenges — like being too early for an undeveloped and unloved virtual power plant market.
Two other notable failures in the storage sector:
Ionic Materials, a 40-person MIT spin-out developing battery materials, shut down in June, as reported in The Information. The company had raised more than $65 million from battery aspirants Renault, Nissan, and Mitsubishi. Australian flow battery firm Redflow ceased operations in August with its administrators unable to find a buyer for the startup, which was previously listed on Australia’s ASX exchange.
Removing carbon one VC dollar at a time
Running Tide was the largest marine carbon-removal startup and the first to sell ocean carbon credits. Its initial plan of removing carbon dioxide from the atmosphere and sequestering it in the ocean by growing and sinking kelp morphed into sinking wood chips coated with lime-kiln dust. Despite the change in that concept of a plan, the company attracted carbon purchases from Stripe, the Chan Zuckerberg Initiative, and Microsoft.
Running Tide announced that it was folding in June after raising more than $54 million from Chris Sacca’s Lowercarbon Capital, Foobar, GreenPoint Partners, Grantham, Foundry Group, and Venrock.
Lesson: Res ipsa loquitur.
Unsustainable aviation
Chasing a clean fuels breakthrough, Fulcrum BioEnergy promised to transform municipal waste into sustainable aviation fuel through a low-emissions gasification process. Instead, the company incinerated hundreds of millions in funding from BP, United Airlines, Cathay Pacific, and Japan Airlines — and hundreds of millions more in municipal bonds. The firm ceased operations in May.
Universal Hydrogen hoped to develop hydrogen-powered flight but went bust in June, after burning through $100 million from a consortium of overoptimistic venture investors and corporates.
Lesson: Clean flight will always be one of the more challenging climatetech sectors.
Charger bankruptcy
Tritium, a major provider of high-speed EV chargers, went bust in April but found a buyer for its insolvent business in India-based Exicom, which claims it will keep Tritium’s U.S. factory in business. Tritium has sold roughly 13,000 chargers in 47 countries and claimed a 30 percent U.S. market share for direct-current fast chargers in 2023.
Lesson: Canary Media’s Jeff St. John tells the horror story of what happened when customers were abandoned by a different EV charging equipment maker, Enel X Way, showing the chaos that can ensue when a hardware firm struggles.
Food fights
Cultivated meat startup SCiFi Foods announced its closure in June, citing regulatory and technical headwinds.
Smallhold, an organic-mushroom grower with a vertical farming approach, filed for bankruptcy in February. Founded in 2017, the Brooklyn-based company operated indoor mushroom farms in New York City, Los Angeles, and Austin. Private equity firm Monomyth Group became the majority owner in February and restructured the company, closing the farms and transforming Smallhold into a mushroom distributor.
Bowery, the New York City–based, celebrity-funded vertical farming startup is closing shop. Once valued at $2.3 billion, the firm had raised more than $700 million in venture capital.
Smallhold and Bowery join a number of recent indoor farming startup failures including robotics firm Iron Ox, vertical farmer AeroFarms, and greenhouse grower AppHarvest.
Lesson: Agriculture is hard, and tech-based agriculture is even harder. Despite the failures, food-tech startups such as the highly valued vertical farming outfits Plenty and Oishii continue to be funded and formed.
Zero to 60 and back to zero with EVs
Luxury EV maker Fisker went bankrupt again; Electric-van maker Arrival went bankrupt and sold its assets to another struggling EV maker, Canoo, which is currently furloughing employees; Cake, a Swedish e-motorcycle startup, sold 6,000 bikes but filed for bankruptcy in February after raising more than $75 million.
Arcimoto, Faraday Future, Mullen Automotive, and Workhorse Group are publicly traded EV companies but are facing delisting warnings, paltry revenue, and valuations that are rapidly approaching zero. Nikola stock is down by 90 percent year to date.
Lesson: Scores of automotive companies were created and perished in the previous century’s transition to horseless carriages. The current creative destruction of EV companies is to be expected in a massive societal shift to electrified transport.
