What Lies Ahead in Energy, Industrials, Materials, Food Tech, and more

By Maria Buitron, Investor at Piva Capital

2020 was an unexpected year, but it has been a catalyst for innovation and change across several sectors. At Piva Capital, we believe that the digital revolution that has taken the world by storm is now just beginning to reach many of the industries that will transform our lives. As 2021 approaches and technology continues to digitize and decarbonize our industries, here are our thoughts on what we think will happen next.

Maria Buitron, Investor:

A Greater Push to Decarbonize Everything

To date, there have been decades of effort put into building more renewable generation capacity and decarbonizing some initial sectors, such as buildings or transportation. However, addressing the decarbonization of industrial sectors, like cement and concrete, steel, aluminium, and chemicals will increase in importance in 2021. We'll see new companies rise to the surface offering new ways to lower the carbon footprint in these complex areas, and a surge in customers demanding cleaner materials for their products and their supply chain. While most think hydrogen is the holy grail to decarbonizing, electricity will rise as a closer contender for creating metals and alloys in a more sustainable way.

The Talent Migration: From Big Tech to Climate Change

As the impacts of climate change continue to increase and become more visible to the mainstream, more technology professionals will jump ship from their roles in Silicon Valley to work on tackling this growing challenge. Soon, new startups will be formed from big tech's most talented professionals aiming to tackle pressing climate issues. These experts will use their expertise and knowledge in cutting edge tech to create new climate solutions never seen before. From developing new hardware, to leveraging computer vision, AI and machine learning, there will be a wave of innovation and new businesses that aim to make our industries cleaner, better and more efficient.

A Rise in Electric Vehicles Creates a New Emphasis on Sustainable Battery Supply Chains

A greater push for a green energy economy driven by the new administration and a growing consciousness amongst consumers will lead to an increase in sales of electric vehicles across the US and the world. While these cars are a climate-friendly alternative to gas vehicles, the batteries that power them are expensive and are hard to source, reuse and recycle. In 2021, there will be more work done across every part of the supply chain to improve on the batteries we now use: how to make them cheaper, recharge faster and last longer, while building a more sustainable supply chain around them.

Bennett Cohen, Partner:

The Fight Against Climate Change Will Accelerate

In 2020 we've seen some of the biggest companies (Amazon, Microsoft, Shell, BP), and the biggest economies (China, Japan, South Korea) announce net zero climate targets. The EU committed to move faster than any other region, and the US elected Joe Biden, who didn't shy away from highlighting a shift away from fossil fuels as a pillar of his platform. The world's largest asset managers (e.g., Blackrock, Carlyle, Bain Capital, etc.) committed to shift large amounts of capital toward climate solutions. In 2021, we will witness action on climate change at a pace never seen before due to rising action across many levels of the global economy. With a crystal-clear market signal, climate-conscious venture capital investment will rise toward all-time peaks.

Alternative Seafood Swims to the Food-Tech Surface

Due to continued traction in plant-based meat alternatives for pork, chicken and beef, it will become increasingly hard for start-ups to differentiate from an already packed shelf and stand out of a crowded market. However, there is still white space for new food tech entrants in the seafood sector, where startups have more opportunities to own a product category, such as shrimp, salmon, or crab. Alternative seafood will be the next wave in the clean meat movement, which will attract increasing investment in 2021 and years to come.

Electric Vehicles Will Go Mainstream

Despite the success of Tesla, electric vehicles have not gained huge momentum in the mainstream US auto market. This is because Americans overwhelmingly prefer SUVs and trucks, which account for 60% of the US auto market, and there have been very few electric options in these categories.  This will drastically change in 2021, and public perception will begin to shift rapidly. Consumers will no longer view electric vehicles as a compromise because a new slate of high-torque, high-power electric trucks and SUVs will be released from automakers including GM and Ford that align with the desires of US consumers.

Adzmel Adznan, Partner & Operating Manager:

The Rise of Industrial Robots

The public health crisis of COVID-19 has created a dire urgency for worker safety in the industrial and manufacturing sectors and on many operations across the assembly line. In order to reduce human exposure, ensure factory workers remain healthy and COVID-free across the globe, and continue to increase productivity, the appetite to find viable AI and robotics solutions will soar to new heights. In 2021, more companies will be open to adopting these types of technologies to optimize their assembly lines, protect their employees, and operate in a leaner, cleaner and greener manner. 

Industry 4.0 and COVID-19 Leads to More GloCalization

With COVID-19 shutting down international borders and business travel, expect to see a continued rise in "glocalization" as more countries understand the implications of the Fourth Industrial Revolution and take proactive steps in ensuring they keep an advantage over their neighbors. Due to this, there will be a renewed focus on discovering the technology solutions that can improve the resiliency and efficiency of critical supply chains in localized regions. Optimizing and strengthening these supply chains will present viable opportunities for emerging countries to advance their economies and obtain a competitive edge. 

Remote Investing in 2021: A Newfound Emphasis on Personalization and Creativity

In order to capture the attention of VC investors in 2021 as they continue to work remotely, founders and entrepreneurs will start getting more creative with their presentations and product demonstrations. High-growth companies seeking funding will look to leverage technologies like virtual reality and augmented solutions to provide an immersive experience for investors when showcasing their products. Early-stage companies will get creative on how they present their team culture and business ethos to investors and come up with unique videos and personalized creative content that emulate who they are as a company and how they can respond to adversity. Additionally, a remote work era and a new comfort level with this new landscape will accelerate more cross-border investments as VCs search outside their regions for new opportunities in 2021.

Julia Reichelstein, Investor:

Farmers Will Turn to Robotics to Fill Labor Gaps

As more U.S. farmers continue to battle devastating labor shortages, a problem exacerbated by COVID-19, expect to see a rise of autonomous robots in agriculture augmenting human effectiveness and driving efficiency in farming. While the technology is nascent, advanced computer vision and new prototypes will soon drive robots through farming fields amidst tough weather, treacherous mud and even pesky bugs. With these advancements, robots will be able to perform a number of once-manual tasks, from weeding to harvesting, especially taking a first hold in high-value speciality crops. Driven by AI technology gains and customer urgency, we'll start to see a rise in VC funding in this area.

An Acceleration of Food Traceability Solutions

With climate change increasingly top priority, consumers will demand more sustainable products - especially from our food and agriculture industries. More insight and traceability will be called for on everything from how food gets produced, to how it was picked & transported. Because of this demand, new technology companies with advanced smart tracking and data analytics capabilities will bubble to the surface, working with farmers and providing direct food intelligence to consumers, restaurants, and grocery stores. While consumers may not have a high willingness to pay for traceability alone, there will be more traction with corporates and large-scale buyers, especially those with Net-Zero emissions targets. Although it may not be viable to place a biometric sticker on every single fruit or vegetable, new innovative solutions such as edible bio-tracing could bring breakthroughs, driving cost down and usage up. Expect to see an increase in funding to those start-ups that can solve this challenge of food traceability on a larger scale in 2021.

Agtech Key to Unlocking Net Zero Goals

Companies, governments, and even individuals will continue to make bold Net-Zero emissions goals in 2021. Achieving them will require a carbon sequestration strategy - not just cutting down emissions, but actively contributing to negative emissions as well. One of the most efficient ways to sequester carbon today includes tree-planting and regenerative agriculture, where more carbon is sequestered in the soil. Carbon (sequestration) credits will continue to be a hot button issue if they are actually helping to lower overall emissions or just trading it around, but demand for these credits will continue to rise as more companies incorporate them into their Net-Zero strategies. Given this, large corporates will join forces with voluntary carbon market platforms, and agtech startups will work directly with farmers to measure and sell carbon offsets. Measurement technologies will be increasingly relevant as a new Biden administration potentially pushes regulation on heightened carbon disclosures. Investments here will provide farmers with incentives to implement sustainable practices as they get paid for their part in capturing carbon.

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About the Author

Maria Buitron is currently an investor at Piva Capital. Before joining Piva, Maria was a consultant at Schlumberger Business Consulting, later acquired by Accenture Strategy Energy. Maria helped clients address complex problems in the Oil and Gas industry while working on projects in the Upstream, Midstream, and Downstream sectors. Maria was also part of energy storage provider Stem Inc’s Business Development team where she focused on expanding into international markets and new product offerings. Maria is passionate about technology and diversity in the energy space. She firmly believes in the value of investing as a driver to help address some of the world’s most pressing challenges. She received her Bachelor of Science in Chemical Engineering with top honors from Tecnologico de Monterrey and holds a Master of Business Administration (MBA) from UC Berkeley Haas School of Business and was recognized as Forbes 30 Under 30 in the energy category.