MARKET REFRAMING

PRESENTED BY GOODCOMPANY VENTURES

"If I'd asked them what they wanted, they would have said faster horses." — Henry Ford

Fundamental to our work of engaging entrepreneurial innovation in response to unmet social needs is translating these needs - hunger, disease, public safety - in terms that mobilize entrepreneurs. This reframing of global threats or public policy problems into actionable opportunities is core to our work. We joined the White House's Climate Data Initiative to apply this work to climate threats to food and water systems. In collaboration with the Rockefeller 100 Resilient Cities network, Risky Business and the Wharton Social Impact Initiative, we interviewed representatives from cities facing flood and drought, researched the economic impact of these threats on various industries, and developed initial findings on the size and nature of demand for innovation in this space with actionable points of entry. We have also leveraged our network of private investors to understand how early and late stage venture capital firms are placing their investments and how we anticipate this evolving over time: all critical considerations for entrepreneurs. We will continue rolling out research over the coming months. This first framework breaks down and segments climate threats to agriculture and water systems, and identifies what innovation looks like in each. The resulting opportunity roadmap offers a framework within which we can identify demand-driven market opportunities for entrepreneurs.

AGRICULTURE

PRODUCTION DISTRIBUTION CONSUMPTION PRECISION AG

Drones, robotics Farm management Drone data analysis Sensors to SMS

SOIL & CROP TECH

Biopesticides, biofertilizers Improved efficiency of resource use Reduced ecological impact Increased yield Drought resistance

MONITORING

Drones for plant health monitoring

URBAN AG Aquaculture Hydroponics Aquaponics Indoor, vertical farming Modular farming Aquapods Aeroponic farms

MARKET ACCESS

E-commerce platforms Broadband networks Logistics Certification Programs

TRANSPORTATION Pickup, delivery Refrigeration Infrastructure

CROP TECH Water: light cooking Energy: light cooking Sous-vid cooking

FOOD ENGINEERING

Nutrition drinks BioTechnologies: plant based food 3D food printing

LABELS

Water, energy, pesticide reporting Standardization Toxins in packaging Smart labels

WASTE PICKUP, RECYCLING Manure storage, processing Resource recovery Incentive programs

CIRCULAR ECONOMY Regeneration Sharing Loop Virtualize Optimize Exchange

ZERO WASTE AG: closed loop systems

AG INVESTMENT OVERVIEW ________________________________________________________________

4 6B

$ .

ANNUAL AGTECH FINANCING FINANCING IN BILLIONS

$4.6

2015 AGTECH INVESTMENT 526 deals

SEEDS: genetics, traits

$2.4

673 unique investors Doubled in previous year alone Increasing geographic diversity

$0.5

$0.9

2012

2013

SUPPLY CONSTRAINTS

PESTS: weeds, insects, disease

2014

2015

DEMAND DRIVERS

LOGISTICS

LAND: soil quality WATER: declining quality, quantity NUTRIENTS: organic, NPK

Population Growth

HIGH TEMPS: crop, animal response

Demand for Biofuel

Rising Life Expectancy

Demand for Meat

Demand for high quality calories Demand

for Biosubstitutes

AG INVESTMENT : BREAKDOWN ________________________________________________________________ PRECISION AG

28B

$ .

SOIL & CROP TECH

661 M

$

24.1B

$

168M

$

2015 INVESTMENTS

2015 MARKET SIZE

2015 INVESTMENTS

2015 MARKET SIZE

Expected CAGR of 11.7%

96 deals 167 unique investors 140% increase from 2014

Projected to grow at a

35 deals

CAGR of 8.5% through

44 unique investors

through 2020: $4.5B Optimistic estimates predict the market to reach $16.3B

2020 to reach $36.3B Soil protection market is

Drones & Robotics: $389M 2015 Investments

estimated to lead the soil treatment market

Biological Inputs: $120M 2015 Investments

WATER OVERVIEW ________________________________________________________________ TOTAL WATER MARKET (CAPEX / OPEX)

GLOBAL WATER SUPPLY Billion Cubic Meters

DEMAND _________________________

589 B

SUPPLY __________________________

6,906

$

GLOBAL WATER MARKET 2014

-2,765

4,222 _______________________

4,208

...resulting in a projected 40% deficient gap in 2030

Municipal water: $293 B Municipal wastewater: $240 B Industrial water: $33 B Industrial wastewater: $22 B

2005

2030 (projected)

Existing reliable supply in 2030

WATER SCARCITY NEW SOURCES DESALINATION

Shock Electro Dialysis

FOG, ATMOSPHERE CLOUD SEEDING WATER H20 EXTRACTION WATER CLEANING SHARING ONLINE H20 EXCHANGE

FILTERING

PURIFICATION TECH Solar powered Energy use reduction Biofiltration Faster speeds

DISTRIBUTION MODELS FOR PURIFICATION TECH Microfranchise One-for-one

MONITORING Sensors Probes Smart Ag

CONSUMPTION CONSUMER

At-home monitoring Water recycling Efficient showers Social media shaming

CIRCULAR ECONOMY CO2 cleaning Feed for livestock

AGRICULTURE

Sensors Probes Modeling Micro-dip Crop technology

WATER SCARCITY INVESTMENT OVERVIEW ________________________________________________________________

$

50 - 60B

ANNUALLY SPENT ON WATER TO MEET FOOD DEMANDS IN NEXT TWO DECADES

1/3 of the world's population lives in a water stressed areas Agriculture uses 70% of the world's water supply PURIFICATION

11 B

$

ESTIMATED 2020 INDUSTRIAL WATER MARKET SIZE

14.7 B

$

ESTIMATED 2019 WATER TREATMENT DEMAND

WASTEWATER USE

SAN DIEGO STUDY

$11.8M in San Diego IPR study Produced 1M gallons of purified water each day

ORANGE COUNTY FACILITY

Industrial water treatment

Demand for water treatment

technology market to

equipment is expected to

for $480M in 2008

expand by over 50% over

rise 5.2% annually over the

$29M per year, produces 85M gallons per day for over

the next 5 years

next 3 years

70% of residents

The OC opened the US's largest water reclamation facility

WATER FLOOD

MANAGEMENT MONITORING CONSUMPTION DRAINAGE

Porous pavement

BLUE INFRA BARRIERS

Polyethylene based, anchored walls Self-closing flood barrier Sliding floor barrier Watertight doors, hatches

STORAGE Cisterns

PIPE MONITORING LEAK DETECTION SENSORS ONLINE ONLINE H20 EXCHANGE FILTERING PREDICTIVE TECH

BIOFILTRATION

Biostrips, biobags, bioscrubbers Constructed wetlands Slow sand filters Natural polymer biofilter Green belts Green walls

ENERGY USE CAPTURE Solar usage Microbial Electrolytic Carbon Capture (MECC)

DISTRIBUTION MODELS

WATER FLOOD INVESTMENT OVERVIEW ________________________________________________________________ ROI on INNOVATION: $1 spent on mitigation CONSUMPTION

600 B

$

PROJECTED 2016 MARKET SIZE FOR FLOOD-RELATED EQUIPMENT & OPERATIONS California spent $395M on flood management, $900M on groundwater sustainability US storm water treatment is valued at $36B per year

$4 in lower damages

POROUS PAVEMENT

800 M

$

2015 INVESTMENTS

Interest in tech that allow more localized resource enhancement strategies In the next 20 years, storm water tech and infrastructure will surpass $105B

INNOVATION SWEET SPOT Porous pavement allows the movement of storm water through the surface Costs 20% more but lifespan is 200% of original lifespan Natural flood management, adaptable to climate change

Blue Infra: Using efficient devices that leave a small footprint, can be implemented with existing collection systems

Green Infra: Using green technology and ecological treatment systems such as ponds, wetlands, rain gardens

ROCKEFELLER 100 RESILIENT CITIES

GoodCompany Ventures partnered with 100 Resilient Cities and the University of Pennsylvania to identify demand-driven opportunities for innovations that enhance the resilience of food & water systems. These cities have signaled an interest in and demand for our graduates.

LOS ANGELES _________________ Most water-efficient big city in U.S., with highest recycling rate Sustainable City pLAn: By 2017, attract $100M green investment through LA Clean Tech Incubator; incubator companies have already raised $50M over 3 years

BERKELEY ________________ Climate Action Plan: reduce community's greenhouse gas emissions by 80% by 2050, zero waste to landfills, locally-produced food; implementation includes finding innovative initiatives

BOULDER _________________ Environmental Sustainability Plan: invest in local food, ag infrastructure, invest in water efficiency and protection orgs ClimateSmart Loan Program: funds renewable energy, efficiency projects, allocated over $10M since 2012

NORFOLK _________________ PlaNorfolk 2030: address environmental sustainability of city, improve beach erosion, moisture protection, street flooding by 2030

PITTSBURGH _________________ Pittsburgh Climate Action Plan: seeking to reduce greenhouse gases by 20% below 2003 levels by 2023 PA Sustainable Energy Fund: promote development of sustainable energy programs and technologies

NEW ORLEANS _________________ Resilient New Orleans: adapt to changing natural environment, invest equity, create flexible and reliable systems; funding derived from gov. budgets, grants, philanthropy and private partnerships

BANGKOK ________________ A severe flood with costs at $45 billion of which only $10 billion were insured sparked the development of a manual for flood management. Bangkok seeks technical expertise and financial resources for creating and executing resilience strategies

100 CITIES GLOBALLY Including the following: __________________

CAPE TOWN, KIGALI, LONDON, ROME, MEXICO CITY, MONTREAL, PANAMA CITY, QUITO, SALVADOR, SEOUL, SINGAPORE, YIWU, BUENOS AIRES, TORONTO, PANAMA CITY

MELBOURNE __________________ Sustainability Melbourne Fund: facilitate and invest in initiatives that create environmental and economic value, currently valued at over $6.4M; Long-term community goal: an eco-city with programs and actions under waste and water management

INSIGHTS OF CHIEF RESILIENCE OFFICERS Being prepared to have access to resources becomes more of a transportation challenge than land use challenge because most food is grown and stored outside Los Angeles. We always welcome pilots here.

________________

LOS ANGELES 100RC CHIEF RESILIENCE OFFICER We are in the 4th year of one of the most severe droughts. Water supply for urban and agricultural use is shrinking at dire levels. In 2012 we received a $30M bond high profile community investment in stormwater management, with a focus on green infrastructure, flood mitigation, pollutant reduction, and permeable pavements. We tested several new techs but need sustained financing solutions ... We need to elevate this conversation.

________________

BERKELEY 100RC CHIEF RESILIENCE OFFICER

We are looking at major structural opportunities, marsh restoration, tree planting, and monitoring for water quality and quantity. We need ways of quantifying benefits of features and new innovations need to be able to demonstrate cost savings, over 50-100yr life cycles.

________________

NEW ORLEANS 100RC CHIEF RESILIENCE OFFICER We are always looking for ways to get start ups in supply chain. We have an annual operating budget of $500mm year. In order to access this, climate adaptation innovations need to find a way to integrate into day to day work so they are part of the normal course of business.

________________

PITTSBURGH 100RC CHIEF RESILIENCE OFFICER

Research for Climate Ventures 2.0 Phase 1 Market Reframing was supported by the Rockefeller 100 Resilient Cities network, the Wharton Social Impact Initiative, and the University of Pennsylvania Social Entrepreneurship Movement (PennSEM) club. Data was gathered from the following sources: Accenture Digital Agriculture: Improving Profitability, AgFunder 2015 AgTech Investing Report, American Progress, ARCC, Columbia University Earth Institute, Environmental Leader, Global Water Intelligence, The Water Council, and World Water: Stormwater.