On the first night of SF Climate Week, Valo Ventures gathered a room full of founders, investors, and ecosystem leaders at Salesforce Tower to get specific about what it takes to build climate tech startups that last.
Co-hosted with At One Ventures, Clean Energy Ventures, Shell Ventures, RMI’s Third Derivative, and CBRE, the event, titled The Economics of Climate Tech, focused on fundamentals: not what could work in climate tech, but what does work.
In her opening remarks, Valo Partner Mona ElNaggar offered a reflection: “Adversity,” she said, “is not necessarily a bad thing when it comes to company building.” Many of the most enduring companies—Amazon, Apple, Microsoft—were founded during economic downturns. “Companies that survive and thrive in such periods share a common thread of resilience. They have strong unit economics, deliver a return on investment to their customers, whom they delight — such that they can grow regardless of the economic backdrop and who is in the Oval Office.”
Here are four signals from the evening, each a blueprint for how today’s climate startups can scale with resilience, rigor, and speed.
1. Don’t Think of Climate Tech as a Vertical—It’s the Foundation of a Transforming Economy
Jane Woodward, founder and Managing Partner of Woven Earth Ventures, challenged the audience to rethink climate tech, not as a standalone sector, but as the underlying infrastructure of a changing global economy.
“Many people still think of climate tech as the specialty aisle of the grocery store. What they don’t realize is that the entire store is changing.”
She outlined four disruptive forces reshaping this new economic foundation:
- Transparency: Seeing what was once invisible (from methane leaks to water quality), thanks to better data collection and fidelity
- Intelligence: AI-enabled design, forecasting, and optimization
- Alchemy: Breakthroughs in materials that radically transform cost structures
- Systems: Integrated, full-stack thinking across technologies, policies, and stakeholders
Zooming in from systems to startups, her message was clear: great technology isn’t enough. Early-stage climate companies succeed or fail based on the strength of their foundations. From investor alignment to team resilience, the structural decisions made early—who’s on the cap table, how the company adapts to setbacks—determine long-term viability.
“The sum of your cap table should be greater than its parts,” she said. “Your first investor sets the tone.”
2. Climate Tech Must Win on Price, Not Compete on Principle
At One Ventures partner Tom Chi provided a clear-eyed assessment: if we want to reshape the systems that created the climate crisis, we have to work with the logic those systems actually run on, which is cost.
He recalled his experience auditing global supply chains, where in one case a factory turned to child labor to shave $0.002 off each seam. That negligible margin was enough to override human rights.
“If capitalism is strong enough to justify child labor for two-tenths of a cent, imagine what it could do when the best product is also the cheapest and cleanest.”
Chi calls this approach “composting capitalism”—not rejecting markets, but redirecting and reusing their momentum. His fund aims to invest only in companies where the most sustainable solution is also the most cost-effective, and refuses to back business models reliant on green premiums or subsidies.
“We didn’t touch green premiums. We don’t even rely on cost parity. We invest in companies where the better environmental outcome is radically cheaper than the status quo.”
In a global system that prioritizes savings above all else, climate impact must compete on margins. Founders can’t rely on values to win customers; they have to design products so compellingly cost-effective that there’s no economic reason to say no.
His framework reframes the challenge: climate tech shouldn’t compete on principle—it should win on price. Outcompeting incumbents on cost isn’t a compromise of the mission—it’s how the mission scales.
3. Build for Abundance: Leverage Winning Materials in a Decoupling World
Antonio Baclig, founder and CEO of Inlyte Energy, underscored the fundamental mismatch between today’s battery infrastructure and the pressing needs of the grid. While lithium-ion batteries have enabled massive gains in mobility and electronics, they come with real constraints for grid-scale deployment: thermal safety issues, complex manufacturing processes, and a global supply chain in which 70–90% of every step flows through China. That dependence on China is increasingly viewed not just as a sourcing challenge but as a strategic liability.
Inlyte’s alternative is a sodium-iron battery, designed specifically for long-duration grid storage. It uses food-grade salt and iron powder, which are abundant, non-toxic, and entirely domestically sourced. The chemistry is non-flammable and does not require active cooling, enabling simpler, lower-cost manufacturing.
“We’re targeting sub-$25/kWh storage using materials that avoid tariffs, reduce geopolitical exposure, and can be sourced right here,” Baclig said. The company is producing cells and modules at pilot scale and preparing for U.S.-based manufacturing.
Inlyte’s approach reflects a deeper shift: as geopolitics and electrification collide, resilience must be embedded at the materials level. In a world increasingly shaped by constraint, abundance is a design choice that delivers a competitive edge.
From system architecture to elemental chemistry, the most promising climate companies are those removing fragility at every layer.
4. Outrun the Gridlock: Use Simplicity as an Infrastructure Advantage
Haroon Inam, CEO of DG Matrix, pointed to the growing pressure on power systems from EV fleets, AI data centers, and distributed energy assets, highlighting that the problem isn’t generation—it’s delivery. And the traditional solution of having a sprawling stack of inverters, converters, controllers, and switchgear adds time, cost, and permitting friction at every step.
DG Matrix’s innovation is a modular “power router” that simplifies the entire stack into a single intelligent system. It unifies storage, generation, and distribution in one platform, slashing the engineering and installation burden while unlocking flexibility at the edge of the grid.
“Why make billion-dollar bets that take 10 years to pay off, when you can make million-dollar bets that pay off in months?” Inam asks.
That logic extends to the company’s go-to-market strategy. By deploying behind the meter, DG Matrix avoids long utility permitting cycles, enabling 2–4 week installation timelines. Its manufacturing model is lean by design: a 5,000-square-foot facility can generate $200–400 million in annual product output at lower capex and with faster time to scale.
What DG Matrix is really solving is infrastructure drag. And Inam is clear that simplicity isn’t just elegant; it also delivers value to customers.
“The green in clean tech,” he asserted, “is profitability to the end customer!”
As the climate transition pushes into more complex territory, the companies that win will be the ones that remove friction, cut delays, and deliver value.
Inam’s point was clear: the faster you can deploy, the faster you can generate value. In climate tech, simplicity translates into speed to power.
In Summary: The Economics of Climate Tech = The Economics of Resilience.
Across the evening’s conversations, a clear pattern emerged: the strongest companies aren’t just solving hard problems. They’re built for the market as it is, not as we wish it to be. They are designed to withstand supply chain and market volatility. They scale without subsidy. They lead with economics, not idealism. They deliver indisputable value to customers.
Whether it’s sodium-iron batteries that bypass fragile supply chains, modular hardware that installs in weeks, or capital strategies that avoid brittle syndicates, the companies that succeed will do so because they’re structured to survive and thrive in adversity.
