Hundreds of climate-related startups have emerged in recent years. However, for Casper co-founder Philip Krim, this is just the beginning.
“We need a lot more zero-to-one founders in this ecosystem,” he told TechCrunch.
Krim, who successfully launched Casper in 2014, is no stranger to entrepreneurship. After taking the mattress company public in 2020 and then selling it to private equity in 2021, he turned his attention to incubating new businesses, including Haven, which helps people install home batteries.
“I ultimately got bit by the climate bug and fell in love with the space,” Krim shared.
Through his journey, Krim crossed paths with Evan Caron, a former commodity trader, and Sharo Atmeh, a lawyer and portfolio manager. They quickly realized their shared desire to foster the fast-moving, asset-light, entrepreneurial ethos that has taken over other parts of the tech world.
One common route for achieving this is by starting a venture fund. However, the trio had no shortage of ideas but not enough time to bring them to life. Instead of launching a VC fund, they have opted to start an incubator called Montauk Climate. TechCrunch has exclusively learned about their new venture.
The incubator model may not be new, but there are few dedicated to climate. Some incubators accept founders and help shape their companies in the early stages of development. Others, like Atomic, Idealab, and Flagship Pioneering, take a startup studio approach and conceive the businesses themselves. Montauk Climate falls into the latter category.
“We author the businesses that we want to create,” Krim explained. “We’re not looking at other people’s ideas. We’re really putting together the idea, and then we bring in talent to help run that team.”
Many climate tech companies focus on problems that require hardware to solve. However, the Montauk team is taking a different approach. They want to create businesses that complement these hardware-heavy efforts while also leveraging their strengths in energy, software, and infrastructure.
“The core science projects are either on their way or have been invented,” Atmeh noted, citing wind, solar, hydrogen, and geothermal technologies. “Those kinds of ‘bricks’ are now in place, and there’s a lot of room to generate the ‘mortar’ that needs to fit between those ‘bricks’ to create connectivity between consumers, between utilities and renewables, and to help operationalize what is now a fragmented system.”
Montauk Climate has launched with $8.5 million, led by a $7 million investment from Sheel Tyle, managing partner at Amplo. The firm will explore business opportunities in-house and, once they feel an opportunity is ripe, they’ll hire a team and commit some initial capital to the company.
“Once we have a team, once we have a business plan that we feel is really vetted and then fully underwritten, we’ll then go out to venture firms that we have relationships with to fund that business and spin it out,” Krim explained. Montauk Climate will retain ownership in their spinout companies and have seats on their boards.
The team is focused on several sectors, Caron shared, including energy use in data centers, electrification incentives, weather data aggregation, and insurance. Expect these to be primarily software or platform plays. The insurance idea is the furthest along, according to Krim, with a seasoned industry CEO already in place and a model that focuses on helping business owners manage risks from climate change.
“We should have a handful of incubated businesses launched in Q2, Q3 of this year,” he revealed. As the number of incubated companies grows, Montauk Climate expects to raise their own venture fund to support them.
If these new businesses can take root, they’ll be growing in a potentially fertile landscape. According to the International Monetary Fund, low-carbon investments amounted to $900 billion in 2020, but they’ll need to reach $5 trillion by 2030. With such significant opportunities, it’s shaping up to be a founders’ market.
