Houston agriculture robotics co. raises $21.5M series A to grow climatetech solution

freshly funded

The series A funding will support the deployment of its biochar machines across Texas, Oklahoma, Arkansas, and Louisiana. Photo courtesy of Applied Carbon

A Houston energy tech startup has raised a $21.5 million series a round of funding to support the advancement of its automated technology that converts field wastes into stable carbon.

Applied Carbon, previously known as Climate Robotics, announced that its fresh round of funding was led by TO VC, with participation from Congruent Ventures, Grantham Foundation, Microsoft Climate Innovation Fund, S2G Ventures, Overture.vc, Wireframe Ventures, Autodesk Foundation, Anglo American, Susquehanna Foundation, US Endowment for Forestry and Communities, TELUS Pollinator Fund for Good, and Elemental Excelerator.

The series A funding will support the deployment of its biochar machines across Texas, Oklahoma, Arkansas, and Louisiana.

"Multiple independent studies indicate that converting crop waste into biochar has the potential to remove gigatons of CO2 from the atmosphere each year, while creating trillions of dollars in value for the world's farmers," Jason Aramburu, co-founder and CEO of Applied Carbon, says in a news release. "However, there is no commercially available technology to convert these wastes at low cost.

"Applied Carbon's patented in-field biochar production system is the first solution that can convert crop waste into biochar at a scale and a cost that makes sense for broad acre farming," he continues.

Applied Carbon rebranded in June shortly after being named a top 20 finalist in XPRIZE's four-year, $100 million global Carbon Removal Competition. The company also was named a semi-finalist and awarded $50,000 from the Department of Energy's Carbon Dioxide Removal Purchase Pilot Prize program in May.

"Up to one-third of excess CO2 that has accumulated in the atmosphere since the start of human civilization has come from humans disturbing soil through agriculture," Joshua Phitoussi, co-founder and managing partner at TO VC, adds. "To reach our net-zero objectives, we need to put that carbon back where it belongs.

"Biochar is unique in its potential to do so at a permanence and price point that are conducive to mass-scale adoption of carbon dioxide removal solutions, while also leaving farmers and consumers better off thanks to better soil health and nutrition," he continues. "Thanks to its technology and business model, Applied Carbon is the only company that turns that potential into reality."

The company's robotic technology works in field, picking up agricultural crop residue following harvesting and converts it into biochar in a single pass. The benefits included increasing soil health, improving agronomic productivity, and reducing lime and fertilizer requirements, while also providing a carbon removal and storage solution.

"We've been looking at the biochar sector for over a decade and Applied Carbon's in-field proposition is incredibly compelling," adds Joshua Posamentier, co-founder and managing partner of Congruent Ventures. "The two most exciting things about this approach are that it profitably swings the agricultural sector from carbon positive to carbon negative and that it can get to world-scale impact, on a meaningful timeline, while saving farmers money."

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What is it going to take to make Houston a leader in the energy transition? Access to capital, according to a panel from Venture Houston. Photo by Natalie Harms/EnergyCapital

Experts: Houston needs to unlock early-stage capital to lead the energy transition

show me the money

Last week, Tim Latimer sat on a panel that consisted mostly of his company's investors and discussed what he felt the missing piece still was for Houston's energy transition and innovation community.

“There’s no better place in the world than Houston to build and scale a climate tech startup," he says on a Venture Houston panel titled Seeding Sustainability: Unlocking the Power of Early Stage Investments.

“But I don’t know if I’m ready to make the claim that we’re the best place to start a business,” he adds.

Latimer, who co-founded Fervo Energy in the Bay Area in 2017 before relocating the company to Houston, explains that his company raised capital on the West Coast ahead of moving to Texas to grow and scale. This allowed the company, which recently announced the success of a major pilot, to tap into early stage funding and then make the most of every dollar raised by moving to a region where the money would last longer — and where there's talent, customers, and more.

“The dream for us to have a truly unlocked ecosystem is that the whole pattern can happen here in Houston, and the gap I see is that capital formation side,” he says.

Latimer was joined on the panel by some of Fervo's investors: Mark Cupta, managing partner of Prelude Ventures; Andrea Course, venture principal of Shell Ventures; and Joshua Posamentier, co-founder and managing partner of Congruent Ventures.

Each of the panelists weighed in on what it would take for Houston to emerge as a leader within the global energy transition. Cupta says that it's going to take the city time to build out activity, successful outcomes, talent, money, and more.

“The venture capital community is an ecosystem, and that ecosystem consists of multiple stakeholders that all have to work in concert with each other," he says. "It has to be a flywheel that spins up over time.”

Course, the only Houston-based investor on the panel, says that Houston has potential because it's got talent, industry, and money, or TIM, as she describes.

“I think Houston is actually the perfect place for becoming the energy transition capital. If you ask me, I think we already are.” Course explains. “It really just takes people doing what we’re doing now to make it even greater."

Posamentier, who previously shared his outlook on Houston in a Q&A with EnergyCapital, explains that access to funding isn't the only issue. “There’s a lot more money than there are investable opportunities at the moment,” he says.

The panel also weighed in on the difference between venture capital and funding coming out of corporations.

“VCs and CVCs have different timelines,” Course explains, saying VC firms have 5- to 7-year life cycles. After that, they need to see an exit to be able to provide that return. “With a CVC, we don’t really have that. Of course we want to show financial returns, but we are long-duration capital.

CVC is patient capital with value-add investors, but Course admits there's a longer due diligence because she wants to find a strategic stakeholder before an investment is made.

“The worst thing that could happen is that Shell gives you money, but they don’t give you business. We don’t want that,” she says.

Waiting for that right investor can be extremely important to company success, Latimer says from the founder perspective.

“It’s hard to put a hard dollar value on help, but our ability to have advisers and introductions from different types of investors … makes all the difference in the world,” he says on the panel. “A lot of startup founders think about their org design very critically and who they want to bring onto the team, and you should be deliberate on your cap table.”

Josh Posamentier, co-founder and managing partner at Congruent Ventures, will join Venture Houston as a speaker this year. Photo via congruentvc.com

Sustainability investor addresses startup challenges, Houston's capital shortages, and more

Q&A

It's been a challenging year for venture capital, but how are climatetech startups doing specifically? One Bay Area investor shares his point of view on this this topic ahead of Venture Houston next week.

Joshua Posamentier, co-founder and managing partner of Congruent Ventures, a San Francisco-based firm that invests in early-stage sustainable companies, is taking the stage at Venture Houston on September 7. Among others, Posamentier will be in conversation with the founder of one of his firm's portfolio companies, Fervo Energy, discussing seed and early-stage funding for sustainability-focused startups.

Venture Houston is presented by HX Venture Fund, a fund of funds that deploys capital into non-Houston firms to encourage investment in local startups. This year's theme is "Spotlighting the path for decarbonization in a digital world."

Posamentier, who has worked over a decade in this space, shares some of his thoughts on Houston as an energy transition leader, the challenges climate-tech startups face, and more in an interview with EnergyCapital.

EnergyCapital: How do you see Houston and its role in this energy transition, its challenges, its opportunities, etc.?

Josh Posamentier: I actually tend to disagree with the people that say Houston is too far down the oil and gas path. I mean, it's it's capitalism at the end of the day. There's money to be made in in climate mitigation technologies. People are going to go chase it, and I think Houston, of all places, is a pretty capitalistic city. And people are definitely not shy about chasing the next big opportunity. I mean, it was oil and natural gas before, and now it's now it's alternative energy. And so I think from that perspective, it's fine. There's a lot of money.

I think the biggest challenge is honestly, especially on a perception basis, a lot of the policy and social stuff that's endemic to Texas, which is a bummer. I mean, especially for younger talent. Austin had a shine, but I think that's largely gone and Houston never had it. So, I think it's something that needs to be overcome and needs to be thought about at a state level basis, especially if you're going to want to attract young entrepreneurial talent.

EC: What are some of the challenges energy transition startups are facing these days? How is your fund kind of supporting your portfolio companies through these challenges?

JP: There's some normalization that's had to happen over the last 9 to 12 months. As you know, corrections have come down the pipe in the venture ecosystem. By all accounts, it has been really frothy for the last few years, especially so in parts of climate. Some of that's due to the the proliferation of investment from non climate-specific firms. And it's, in many ways, decoupled from the ups and downs of different parts of the venture ecosystem, but it also has different timelines. I think not everyone always appreciates what that means and what that implies for for startups. So there's a lot of frustration and a lot of missed expectations in the early stage part of the ecosystem that are slowly getting fixed. I think getting expectations more in line with reality is going to help immensely.

The other thing is just figuring out how to talk more in a language that venture investors understand. I think that's a little bit of a challenge. There's there's actually a pretty big gap between if you're an oil and gas developer and thinking about how you fund that kind of a business versus how you fund a technology-enabling business. Fervo Energy is an interesting example. It's a tech company, but now it's really a tech enabled developer because they have no choice but to do that full stack. They went to school out here. They understand the ecosystem. They've really taken the effort to really understand all the capital players. And so we're waiting to see how that ultimately plays out.

But there's just different capital. I think it is a little challenging. And this is a good thing. There does need to be a way, I think, to just get people more exposure to to the market there — in the Houston market specifically. If you're spinning at Stanford, there are hundreds of VCs within walking distance. In Houston, the ones I know I can count on one hand.

EC: Has that pace of commercialization changed over the years or have founders found ways to survive that valley of death?

JP: I don't think anything's really changed fundamentally. I think people have gotten a little more clever about understanding how the adoption occurs, and figuring out how to phase into those processes that that comes with experience. But there's only so much acceleration you can do when you're dealing with critical infrastructure. You know, people are not going to want to just jump right in, rip out, and replace things that keep the lights on. And so you just have to figure out how to how to capitalize a business in such a way that you can you can live with those kinds of timelines. Venture capital is a fantastic tool, and it is far from the right tool for every problem. And so there are plenty of opportunities to deploy other tools that are more appropriate to different kinds of different kinds of challenges.

EC: What attracted you to investing in Fervo Energy?

JP: So, it's how we think about portfolio construction. Fervo has an amazing team, which we will bend a lot of rules for, and we saw this opportunity as something they could build a ton of value by validating the tech, establishing a huge land position, and then raising different kinds of capital for the out years and for the project development. A bunch of our companies took venture capital to develop a technology, and then they know that venture is not the right class of capital to then scale that throughout the world and whatever. So they would basically raise other forms of capital in the out years to deploy the technologies.

EC: And one of those options is government funding. How do your portfolio companies utilize that?

JP: A big chunk of our portfolio has some government money, even if it's very early stage research grants or something like that. I see government money being the most effective in a couple of ways. One way obviously is to get the core research out of it versus just spin it into something more commercial that we can all then look at.

The other place that is really exciting is in is getting technologies to scale where they're then cost effective without further subsidies. When we underwrite companies, we are very explicitly underwriting them in the absence of subsidies at scale. The assumption is those are just there to basically bridge the gap between "this is totally uneconomic because it's a tiny, tiny little factory or something" versus "it would be plenty economic if it were a big factory." So, if they can just bridge that gap with a little bit of government money.

We've been through this this cycle a couple of times, and we can't in good faith underwrite anything assuming that government subsidies are going to continue. We very much believe it's a bridge — it's got to be a bridge to something. It can't be a bridge to nowhere. And I think there are a lot of companies out there today that are almost designed to just pump the government incentives, and that's not a recipe for a business that can grow on its own over time.

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This conversation has been edited for brevity and clarity.

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Geothermal exec on Houston expansion, commercialization and more

Q&A

Challenges in the energy transition often center around two questions: Where will organizations find the resources? And how will projects be financed?

XGS Energy's next-gen closed-loop geothermal well architecture addresses both issues head-on. The California-based company saw massive growth in the Houston market last year and recently completed a 100-meter field demonstration in central Texas, marking a major milestone for its technology's commercialization and potential for scale.

In an interview with EnergyCapital, Axel-Pierre Bois, XGS's Chief Technology Officer, shares what drew him to the geothermal space, why XGS is expanding in Houston and what the company's plans are for the year ahead.

How does XGS Energy's technology address the biggest challenges in geothermal energy?

XGS Energy is developing a geothermal system that decouples geothermal energy from its traditional dependence on water and geology to deliver affordable, clean energy anywhere there is hot rock.

Historically, geothermal resources have been hard to locate, as conventional systems require the overlap of hot rock, porous and permeable geology, and abundant water to produce energy, limiting their potential to a few select hot spots worldwide. Instead of relying on an underground fracture network that drives the geology and water requirements, the base component of XGS’s system is a single well, in which fluid is pumped to a hot rock resource and then returned to the surface through a tube-in-shell design, creating a sealed, closed loop. This allows XGS to produce geothermal energy anywhere where there is hot rock, unlocking terawatt-scale potential in the U.S. alone.

Geothermal systems have also struggled to secure project financing, as many systems have historically faced high levels of unplanned cost risk due to factors including water loss and production uncertainty. XGS’s sealed, closed-loop system ensures that it can provide reliable, predictable electricity throughout its lifespan. XGS also boosts the cost-competitiveness of its system through our major innovation, a proprietary thermally conductive materials system that is installed downhole around each well, increasing the heat transferred to the closed-loop system by 30-50%.

What has drawn you to a career in the geothermal energy space?

I have been in the subsurface industry for over 30 years, developing technical solutions for companies in the fields of geosciences, underground storage, upstream oil and gas, and geothermal heat harvesting to help improve their overall economic, ethical and environmental footprints. In 2009, I founded Curistec, a technology company providing research, engineering and technical services for geomechanics, wellbore integrity, well abandonment, cement design and cement and rock testing. A few years back, Curistec assisted with the Iceland Deep Drilling Project, helping to develop cement formulations for superhot geothermal well applications to enable drilling in high-temperature environments. As I looked toward the future, it became clear that next-generation geothermal technologies would transform the geothermal energy industry and open new markets worldwide. Curistec had been working closely with the XGS Energy team as technology partners for several years, so joining the team directly to help shape the technology development was an exciting opportunity to help develop and deploy a new system to unlock the full terawatt-scale potential of geothermal energy.

Tell us about the 100-meter field demonstration in central Texas completed in 2024 — what all did you and your team learn from the test?

Our 100-meter field demonstration in central Texas marked a significant step in our progress toward deploying geothermal energy in a commercial setting. With this field operation, we successfully demonstrated our ability to mix, pump and place our thermally conductive materials system at a commercial scale, using off-shelf tools and technologies. This was a significant milestone, taking us from theoretical models and laboratory tests to field-scale operations, proving that our novel geothermal system is operationally viable in real-world well conditions.

The completion of the Texas field demonstration advanced XGS into the new wave of geothermal innovators that are putting real steel in the ground. In 2024, we kicked off construction at our commercial-scale demonstration in California and are excited to share updates in the year ahead.

Last year, XGS Energy leased over 10,000 square feet of office space in Memorial City. How has Houston's business community and opportunities benefitted the company?

Houston, the epicenter of the oil and gas industry, has become a hub of energy innovation, offering attractive incentives for growing companies like XGS. The region’s workforce, which is home to some of the best subsurface engineers and operational talent in the energy sector, was a key factor for XGS when we were planning our operational roadmap. This expertise, paired with proximity to our partners in the field services industries, like cementing and drilling, is both apracticaland tactical advantage for XGS.

We’ve built a strong technical and operational team here at XGS, with experience from the oil and gas industry, utilities and power project developers. XGS is planning for continued growth in the Houston area, leveraging the region’s leading engineering and operational workforce and its intensifying interest in supporting the energy transition.

What are XGS Energy's goals for 2025?

In 2024, the XGS Energy team made significant progress toward our goal of providing clean, round-the-clock energy with our solid-state geothermal system. In 2025, XGS Energy will be focused on deploying its geothermal system at a commercial scale, starting with the completion of our full-scale prototype in California. XGS will also continue accelerating our commercial traction, expanding our already robust and highly differentiated geothermal resource evaluation toolkit, advancing our global project pipeline, and growing our team to strengthen our operational capability and capacity.

Environmentalists say Trump's energy order would subvert Endangered Species Act

In The News

Environmental groups concerned about loss of protections for vanishing animals see one of President Donald Trump’s early executive orders as a method of subverting the Endangered Species Act in the name of fossil fuel extraction and corporate interests.

Trump declared an energy emergency via executive order earlier this week amid a promise to “drill, baby, drill.” One section of the order states that the long-standing Endangered Species Act can’t be allowed to serve as an obstacle to energy development.

That language is a pathway to rolling back protections for everything from tiny birds like the golden-cheeked warbler to enormous marine mammals like the North Atlantic right whale, conservation groups said Wednesday. Some vowed to fight the order in court.

The Endangered Species Act has been a hurdle for the development of fossil fuels in the U.S. for decades, and weakening the act would accelerate the decline and potential extinction of numerous endangered species, including whales and sea turtles, said Gib Brogan, a campaign director with conservation group Oceana.

“This executive order, in a lot of ways, is a gift to the oil and gas industry and is being sold as a way to respond to the emergency declaration by President Trump,” Brogan said. “There is no emergency. The species continue to suffer. And this executive order will only accelerate the decline of endangered species in the United States.”

The Endangered Species Act has existed for more than 50 years and is widely credited by scientists and environmentalists with helping save iconic American species such as the bald eagle from extinction. A key section of the act directs federal agencies to work to conserve endangered and threatened species and use their authorities to protect them.

Trump's order declaring a national energy emergency took direct aim at the authority provided by the Endangered Species Act. It orders federal departments to treat energy production as an emergency, which could help expedite approval of energy projects that might otherwise be held up.

The order also convenes a committee to “identify obstacles to domestic energy infrastructure specifically deriving from implementation of the ESA or the Marine Mammal Protection Act,” another landmark conservation law. It states the committee could consider regulatory reforms, including “species listings,” as part of its work.

The Trump administration did not respond to a request for comment on the executive order. The order defines energy mostly as fossil fuels such as crude oil and and coal and does not include renewable energies such as wind power. It also states that energy production is an emergency because “an affordable and reliable domestic supply of energy is a fundamental requirement for the national and economic security of any nation.”

While environmentalists herald the Endangered Species Act as a landmark law, pro-development and free market interests have long criticized it for holding up the building of energy, infrastructure, housing and other projects. Some, including the influential Heartland Institute, applauded Trump's declaration of an energy emergency this week.

Conservatives have also decried the Endangered Species Act as inefficient. It took the U.S. Fish and Wildlife Service years to follow the process of potentially delisting the golden-cheeked warbler, a small songbird that breeds only in the forests of central Texas, said Connor Mighell, an attorney with Texas Public Policy Foundation, a free market research institute.

Trump's executive order could help stop the Endangered Species Act from resulting in drawn-out permitting processes and lengthy litigation, said Brent Bennett, energy policy director for Texas Public Policy Foundation.

“We're hoping that can improve some of the permitting processes and remove some of these barriers,” Bennett said.

But the act is critical to maintaining species threatened with extinction, environmentalists said. They cite whales such as the North Atlantic right whale, which numbers less than 400 and is vulnerable to collisions with ships and entanglement in fishing gear, as an example of an animal that must be protected under the act. The Rice's whale, which numbers even fewer and is vulnerable to disruption from oil drilling in the Gulf of Mexico, is another prime example, environmentalists said.

The nation's symbol, the bald eagle, is a perfect example of the importance and effectiveness of the Endangered Species Act, said Andrew Bowman, president of the conservation group Defenders of Wildlife.

“President Trump’s election to office did not come with a mandate to deny Americans a clean and healthy environment or destroy decades of conservation successes that have ensured the survival and recovery of some of America’s most iconic species, including the bald eagle, which was newly named our country’s national bird and is only with us today thanks to the Endangered Species Act," Bowman said.

Texas ranks as No. 2 manufacturing hub in U.S., behind only California

by the numbers

Texas ranks among the country’s biggest hubs for manufacturing, according to a new study.

The study, conducted by Chinese manufacturing components supplier YIJIN Hardware, puts Texas at No. 2 among the states when it comes to manufacturing-hub status. California holds the top spot.

YIJIN crunched data from the U.S. Census Bureau, International Trade Administration, and National Association of Manufacturers to analyze manufacturing activity in each state. The study weighed factors such as number of manufacturing establishments, number of manufacturing employees, total value of manufacturing output, total manufacturing exports and manufacturing’s share of a state’s gross domestic product.

Here are Texas’ figures for those categories:

19,526 manufacturing establishments
847,470 manufacturing employees
Total manufacturing output of $292.6 billion
Total manufacturing exports of $291.9 billion
11.3 percent share of state GDP

According to Texas Economic Development & Tourism, the state’s largest manufacturing sectors include automotive, tech, petroleum, chemicals, and food and beverage.

“The Lone Star State is truly a manufacturing powerhouse,” the state agency says.

In an October speech, Texas Gov. Greg Abbott praised the state’s robust manufacturing industry.

“We are proud that Texas is home to a booming manufacturing sector,” he said. “Thanks to our strong manufacturing sector, ‘Made in Texas’ has never been a bigger brand.”

Houston is a cornerstone of Texas’ manufacturing industry. The region produces more than $75 billion worth of goods each year, according to the Greater Houston Partnership. That makes Houston the second-ranked U.S. metro area for manufacturing GDP. The more than 7,000 manufacturing establishments in the area employ over 223,000 people.

“As one of the most important industrial bases in the world, Houston has access to many global markets thanks to its central location within the U.S. and the Americas,” the partnership says.

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