Australia's green hydrogen goldmine
Small Steps Vol. 33: Investing in Australia’s hydrogen opportunity💡startups demand climate action🌲 and a legendary stock-picker's next big tip 📈
“Be you. Make sure you're saying something when you're saying something. It's important to sound like you, to feel like you, to be like you. Be you.”
Erykah Badu, Singer-Songwriter
Kick start
🏆 Hydrogen, the universe’s simplest element, is called by some the “holy grail” of decarbonising our economy.
💚 Green hydrogen, produced by passing electricity from renewables through an electrolyser in water, can replace intensive fossil fuel use in the heavy transport, fertiliser, and steel industries. It can also be a long-term energy store to back up a grid network made up of 100% renewable generators (solar and wind) if shorter-term storage solutions (like big batteries) run out.
📈 To boot, advocates including Beyond Zero Emissions and Alan Finkel, Australia’s former Chief Scientist, say that Australia is well-suited to become a green hydrogen exporter because of our natural advantage in producing cheap renewable energy (due to abundant local resources and space for solar and wind power). This is a game-changing opportunity: ARENA estimates green hydrogen exports could be worth $10b to the economy by 2040.
🏭 But the most benefit to the planet comes when hydrogen is “green” (generated from renewables), less so “blue” (generated from fossil fuels with carbon capture), and especially not “gray” (like blue but no carbon capture). The problem is that, currently, green hydrogen costs above $5/kg, when the market needs it to be less than $2/kg to be competitive. Environmentalists worry that if we don’t bridge the gap, a shift to hydrogen will just be another win for the fossil fuel industry touting “blue” hydrogen.
♻️ To get to a green hydrogen future, we need more founders and investors building solutions across the green hydrogen supply chain, from solving for scalable production through to compression, transport, and storage. We're impressed by the thinking behind Enapter, which has attracted venture capital with modular electrolysers that can be mass-produced and quickly scaled. Meanwhile, AP Ventures has made a business of investing in the hydrogen supply chain, focussing on technologies with multiple applications that can be integrated into existing supply chains to address market risk.
What stopped us in our tracks
🙌 The past week saw dozens of companies across Australia including Canva, Envato and CultureAmp sign an open letter calling for action on climate change and participating in the Not Business as Usual climate strike last Friday afternoon, led by Future Super. We said it last week; sitting on the fence is no longer an option for values-driven employees, and Aussie tech is acting accordingly.
👀 Cathy Wood, the chief investment officer of Ark Investments -- a fund that invested early both in Tesla and Coinbase -- believes deflation caused by innovation in DNA sequencing (which reduces healthcare costs), battery packs (reducing electricity costs), and AI (reducing labour costs faster than increases in productivity) is the next trend to watch out for.
Career pathways
💥Enablement tech accelerator Remarkable is looking for a Head of Accelerator
😎 Victoria’s Alice Anderson fund is seeking an Investment Associate
🐛 Goterra is hiring for a graduate mechanical engineer. (Goterra’s Olympia Yarger was featured on the A Positive Climate podcast. Check it out here.)
🧠 Mindset is hiring roles in data science and growth.
👔 Sendle is hiring a Data Analyst, Partnerships
🚧 Full Cycle is searching for a R&D Engineer
🔥 As always, there’s 50+ more jobs on the Giant Leap Fund jobs board and more jobs at ethical companies on the global B-Work job board.
For the road
👉 Giant Leap Fund wouldn’t exist if it wasn’t for the vision of Berry Liberman and the family office she founded with her husband Danny Almagor called Small Giants. Listen to their family story on the Business of Family Podcast, from the humble beginnings of the Liberman textile business through to founding Small Giants.
😱 Impact trends continue to secure massive funding rounds. In another leap forward for the circular economy, US-based 2nd hand clothes marketplace Vinted has raised an eye-watering $US303 million. Separately, Melbourne’s plant-based meat alternative business Deliciou recently secured a round that values them at $65 million.
💪 Dan Ariely, who invests with a thesis that companies with positive culture outperforms, shared insights from his research on the best human capital practices.
😔 Sad to see Hey Tiger, a chocolate startup raising awareness on the ethics of sourcing cocoa, shutter shop. We commend Cyan Ta'eed and the team it's setting an example for other businesses in Australia with their honesty and transparency.
💰 Artesian has mapped Australia’s VC ecosystem. There were only 15 firms in 2011. Now, there’s over 109. That’s quite a growth trajectory.
🏫 No matter which way you slice it, studying is hard. Which is why we were fascinated by an Australian program to send students aspirational, reflective messages during their studies to help boost their mood and mental health. That said, we could all use a positive nudge every now and then.