Scaling climate hardtech isn’t just about technical problem solving. It means building the business engine behind the invention, and putting together projects that can turn risky, first-of-a-kind (FOAK) projects into financeable, repeatable commercial assets.
At Converge, hosted by NorthX, founders, investors and industry partners explored how we build climate hardtech and shared hard-won lessons from building FOAK projects.
Why it matters: Building the FOAK project is a key step to commercialization. David Yeh of Precursor, a specialist FOAK developer, says the goal for founders is to show how the first project is a precursor to your molecule or electron being the next big thing - creating trillion dollar companies and decarbonizing entire sectors.
Founders often think that the technical risks in a FOAK project are the hardest. But as multiple founders shared on stage, risks around bankability, project development, and business model design are just as critical. A great technology won’t scale unless the first project is structured so that a banker can look at it and say: “uh huh, got it.”
However, these first projects often struggle, looking more like tech R&D experiments instead of financeable projects. The result: stalled projects, lost momentum, and investors questioning whether the market is ready.
Crossing the FOAK chasm: Teams that successfully cross the FOAK chasm bake have a few things in common:
Baking in commercialization from day one by adding team members with business skills and getting early customer input
Thoughtfully structuring projects for bankability at every step, with clear offtake agreements, joint-venture structures, and repeatable economic models
Adding people who have built real projects before, and have seen all the weird ways they can go wrong
State of play: Canadian founders are putting the pieces together across the country.
CO280 is setting up joint-ventures with pulp and paper companies and securing offtake agreements with corporate buyers like JPMorgan Chase.
Mangrove Lithium is building its first full-scale lithium production plant in BC (with offtakes in place), and is already making plans for a larger, second plant in Ontario.
NorthX announced a $1.5M follow-on investment in Mangrove Lithium at Converge, and $500K in seed investments for five new ventures coming out of BC universities.
The bottom line: Scaling up is a daunting challenge and requires thoughtful team and project design in addition to building a capital stack around project. Done well, first-of-a-kind projects have the potential to unlock industry-transforming climate solutions. As Yeh said, Canada has a great home court - now we have to own it.
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