SSTI Digest

New York City and the state of Illinois have both made moves recently to shift more of their economies to clean energy. Mayor Bill de Blasio and the New York City Economic Development Corporation (NYCEDC) announced a 15-year, $191 million Offshore Wind Vision (OSW) plan to make New York City a leading destination for the offshore wind industry.  Last month, Illinois Gov. J.B. Pritzker signed sweeping legislation offering new incentives for the adoption of clean energy and aim to move it to 100 percent clean energy by 2050. And Massachusetts Gov. Charlie Baker is looking to use American Rescue Plan Act (ARPA) money to establish a clean energy investment fund.

Technologies that are developed from the Department of Energy’s R&D are now required to be substantially manufactured in America. The requirement was developed in response to President Joe Biden’s executive order that all agencies review their policies related to supply chain vulnerabilities. The rule change takes the domestic manufacturing preference that is in place currently only for exclusive licenses for products sold/used in the U.S. and applies it by default to all Energy licenses from Oct. 1 on. The agency has a waiver process in place for technologies that cannot be produced domestically. DOE has published a detailed explanation of the rule, including a frequently asked questions guide and references to authorizing authorities. The American Institute of Physics has published an article citing concerns from several technology transfer associations that believe the rule change will make licensing the agency’s intellectual property more difficult.

ESS Inc., a company that closed a deal to go public earlier this month, was able to leverage public capital at its early stages to accelerate its success as a startup. Founded in 2011, the Wilsonville, Oregon, based company manufactures batteries for long-duration energy storage applications. In 2012, ESS Inc. received a Phase I Small Business Innovation Research (SBIR) award from ARPA-E, and additional grant support from the Oregon Nanoscience and Microtechnologies Institute (ONAMI), an SSTI member. ONAMI is an Oregon-based non-profit that provides grants, equity funding and business development guidance to startups engaged in research-based scientific innovation. It receives funding from Business Oregon, also an SSTI member.

The White House is seeking public input to help remove barriers to equity in the science and technology ecosystem. The White House Office of Science and Technology Policy (OSTP) launched the Time is Now: Advancing Equity in Science and Technology Ideation Challenge that asks for ideas from the public in answering a central question: “How can we guarantee all Americans can fully participate in, and contribute to, science and technology?” OSTP is asking for ideas and examples of successful programs to help advance equitable science and technology and to contribute to America’s global competitiveness in the 21st century.

France announced a $35 billion five-year plan to develop innovative technology and industrial activity to help boost its economic growth. An AP news story said the plan includes $9.2 billion to develop energy technology to help reduce greenhouse gas emissions and additional funding to finance small nuclear reactors. Called France 2030, the plan contains 10 objectives including making France a green hydrogen leader with at least two gigafactories of electrolysers that will produce hydrogen; decarbonize industry by reduce greenhouse gas emissions by 35 percent compared to 2015; produce nearly 2 million electric and hybrid vehicles; and, build low-carbon aircraft.

Across the United States, universities’ endowments have seen a large return in their portfolios in the past year, according to a recent PitchBook report. This trend was most notable in well-known universities with large endowments. The University of North Carolina reported a 42.3 percent return, Duke University reported a 56 percent return, and Washington University in St. Louis reported a 65 percent return. These gains are largely attributed to their investments in alternative assets like venture capital and private equity. Lesser-known universities with smaller endowments, however, have not seen substantial investments into alternative assets at the same level. Unlike universities with large endowments, these smaller institutions have a limited network of alumni employed at top funds, and will likely have to settle for low performing and unproven fund managers, according to the report’s author. This may be the case because smaller endowment institutions tend to lack access to high performing managers that invest through bigger funds. They may not have the resources to efficiently manage a portfolio of investments in venture capital. PitchBook cites data showing that…

Semiconductor leaders and stakeholders have joined together to launch a year-long, industry-led effort to boost U.S. semiconductor competitiveness. The National Semiconductor Economic Roadmap (NSER) will focus on the workforce, supply chain and infrastructure to support industry R&D, design, manufacturing and end applications. Arizona Commerce Authority is facilitating the effort; the group’s founding industry partners have operations in more than a dozen states and territories. The NSER partners will convene over the coming months to identify precompetitive technical challenges and opportunities, infrastructure and supply chain issues, workforce skill requirements and more. Participating entities will include private sector companies, higher education institutions, industry associations and states. Arizona has received two multi-billion dollar semiconductor investments since May 2020 that combined are expected to create about 5,000 jobs in the state. Entities interested in joining NSER can find more information at www.azcommerce.com/NSER.

The PitchBook-NVCA Venture Monitor Q3 2021 reports eye-popping investment activity through the first three quarters of the year. So far this year, the total venture capital market has invested more than $238 billion across an estimated 12,000+ deals, more than 1,300 exits have yielded more than $580 billion in value for investors, and 526 funds have raised more than $96 billion. Most of these metrics have already broken all previous annual records. As has been the case since 2018, the market continues to be very top heavy: 57 percent of VC investment this year has gone to rounds of at least $100 million, and a comparable level of commitments to new funds occurred for funds with at least $500 million. These trends continue to underscore the separation between the current reality of VC market and VC’s traditional image: the investment activity driving the topline numbers is less about making small and risky bets into new startups and more about taking large positions on relatively established companies. This separation raises questions about the value of VC activity (and particularly dollars invested) as a proxy measure of a region’s startup activity. The…

Innovations are often born from small businesses, operating with few employees, if any at all, to bring new technologies and processes to market. However, new small businesses frequently fail and are not the only source of innovation. Understanding the regional dynamics of business creation can help leaders better support their regional innovation economies, and this edition of Useful Stats builds on our previous analyses of net establishment creation and net job creation by state and by industry to explore establishment creation by state and by establishment size (as measured by the number of employees) for 2019.

The emerging innovation-intensive sector of urban farming is seeing heightened interest by venture capitalists, investments are growing faster than the crops: $2.4 billion so far this year at last count by PitchBook. That reflects a year over year (YoY) investment growth rate of 214 percent.  The number of individual deals also is rising 14 percent YoY. The sector is expected by many market analysts to capture an increasing share of the nation’s food supply for a number of reasons. Most notably, the historic drought in the western half of the U.S. is likely to have significant impact on the region’s agricultural industry, which currently accounts for up to 70 percent of the region’s water use.  Additionally, consumption of fresh vegetables tracks closely to income inequality and access to full service grocery stores and farmers’ markets, resulting in “food deserts” for many lower income neighborhoods. Thirdly, an ever increasing share of the world’s population is living in urban areas. A fourth reason for the rapid growth in urban farming innovation is purely economic. There is a lot of cost and waste in the growing, harvesting, handling, transportation and…

The Federal Communications Commission announced its second round of funding for new broadband investments through the Rural Digital Opportunity Fund (RDOF). It also revealed that it is “continuing its work to refocus the program to ensure that funding goes to unserved areas that need broadband,” and as a result dozens of winning bidders from the previous round have “chosen not to pursue buildout … .” This second round of funding authorizes more than $163 million to 42 providers in 21 states that will bring broadband service to approximately 65,000 locations over the next 10 years. In July, the FCC sent letters to 197 winning bidders offering providers “an opportunity to withdraw their funding requests from places where there was evidence of service or where questions of waste have been raised.” As a result of that process, 85 bidders chose not pursue buildout in areas that had evidence of existing service or questions of potential waste.

Benson Hill, a unicorn (a startup valued over $1 billion) that closed its deal to become a public company last week, was able to leverage several sources of public capital to accelerate its early success. The St. Louis-based agricultural technology company uses machine learning and genome editing to facilitate the production of sustainable and healthy crops. Founded in 2012, Benson Hill has utilized state-sponsored venture capital and federal grants to reach its funding goals. In 2013, Benson Hill received a $225,000 Phase I Small Business Technology Transfer (STTR) from the National Science Foundation (NSF). The company received another $270,000 in STTR Phase I and Ib funding from NSF in 2014, along with a $100,000 Small Business Innovation Research (SBIR) grant from the U.S. Department of Agriculture. Benson Hill also completed multiple rounds of equity investment that included funding from venture development organizations. These include a $1 million seed round in 2013 and a series A round in 2015. BioGenerator and Missouri Technology Corporation (MTC) were active in both of these rounds. BioGenerator, the venture development arm of BioSTL, was one of…