24hrs Inside a Silicon Valley Cloud Seeding Startup

0:00 80% of the world is rain-fed. That's about 2 trillion in crop value we can target that is actually under producing because of changing rain patterns. >> While most of Silicon Valley continues to pour capital into AI, there are small groups of founders building at the fringe of what's actually possible. In industries where the science takes years and the capital runs out long before the breakthrough arrives. >> Imagine if cloud seeding was so simple that you could just order rain delivery to your crop, to your water basin.

0:33 >> Today, I'm going behind the scenes with Supercool Earth, a climate biotech startup in Silicon Valley manufacturing a natural protein that makes water freeze at warmer temperatures. That one molecule sits behind two completely separate businesses, both chasing venture scale outcomes. >> At those temperatures, ice and liquid water can coexist. >> Photoperception can squash all kinds of things or delay all kinds of things. >> People have been trying to control where rain falls for decades with mixed results at best. So, the real question I want to understand is whether one protein can change that and whether a startup this young can fund the science long enough to find out.

1:17 Okay, today is a pretty special one. I am going to catch up with some founders of a startup that is unlike anything I've ever seen before. I am going behind the scenes with Supercool Earth. They are a cloud seeding company. I've seen a lot of conspiracy videos about this, but it's actually really important to the agriculture industry in the US and a bunch of other countries that allow cloud seeding to happen. Usually with crazy deep tech biotech startups like this, they take a significant amount of capital to actually spin up and operate.

1:49 R&D is expensive, shipping this stuff is expensive, producing it at scale is really expensive. From a VC perspective, biotech startups are really risky because a lot of them die. What I found really cool is that they've developed a bridge product, something that they can actually start making money off now. I'm really fascinated as a non-biologist to kind of go in as an outsider and find out what the hell is going on within a startup like this. So, yeah, it should be a bit of fun.

2:19 >> >> I really appreciate everything. Thank you. >> Can I follow you? >> Yeah, man. Of course. Hi. How are you? >> Hi. >> Lovely to meet you. >> Lovely to meet you, too. Great first person to meet. I didn't realize you were going to be here. >> What is this building just so I can understand? Like, this is this crazy warehouse. >> So, most of this is food, like food manufacturing, food production. And at the very end, we have IndieBio, which is our first check-in, our investors, and then a lab space there as well. So, the investors work there, and then also there's about like 10 or so companies in that space that they are also first check-in. And then we all work in the lab space that I'll show you.

3:04 >> Hi. >> I'm Wolfgang. >> Nice to meet you. >> Steph. >> Nice to meet you, Steph. >> Michelle. >> Michelle, nice to meet you. >> What's up? >> This is the best place. Yeah. Coffee shop. >> Let's do it. >> Okay. >> Australians are super snobby with coffee. We're like, we're going to go to a coffee house. What's kind of going on for you today? What are we walking into? >> So, we're scaling up our production of our biological, and we have a meeting today with our partner to do that, to align on that process. How do we mass produce a biological chiefly to be able to use it commercially? So, we have a meeting for that today. Then we've got our weekly huddle meeting. Wolfgang is an atmospheric scientist, and the rest of us are biologists. So, when we say we're transforming some cells, he's like, "What the does that mean?" Or when he talks about the four mechanisms of freezing, we're like, "You got to say it again, man."

3:48 So, it's it's cool to have like these different experts all try to find this common language. >> Trevor checked out the process and he's does have a few questions, so we'll pass it over to him. >> And these one I just would like to touch base on when can we start to working on this project, what is going to be the work plan in general, how do we get the strain here in Canada? >> I can answer some of that. So, with Green Shoots, we still have to register our company in Nova Scotia, which I will do. And then the second piece of Green Shoots is the work plan, which is what we need to talk about today and just align on that work plan so I can send it over to Grant.

4:24 >> Based on the restrictions for the microorganisms in Canada, you don't need to make any paperwork for the strain to get it here. The only thing that I would like to recommend is to keep the name of the blade or tube that you're going to send as basic as possible. >> What a super technical and heavy meeting to step into first thing in the morning. Lucky I had coffee. Jesus. So, biotech is a super unique category in the venture capital startup world. A lot of VCs do not want to deploy capital into biotech startups. And there are a lot of reasons why they're super high risk. So, I want to see how a company like Super Cool Earth gets from its current stage to a venture scale outcome. So, we're going to mount a camera, we're going to get the pen and paper out, we're going to map this out.

5:08 So, unlike other breakdowns I've done, Super Cool have not disclosed what they've raised. But, we do know who's backing them. Superorganism Future Communities Capital, they even went through a startup accelerator called IndieBio, which is one of the best-known biotech startup accelerators. And IndieBio publishes their terms. $250,000 for 8% of the company. Run that backwards and it values the startup at around $3 million at entry. From there, a company this stage usually raises a few million more. I'm going to estimate about $3 million raised at maybe a 10 to $15 million valuation. Now, that is my complete educated guess and it's not what they've said. So, what does Super Cool actually do? They make a protein that exists naturally in nature and it makes water freeze at warmer temperatures than it naturally would.

5:48 They put this gene into a fungus and ferment it kind of like you ferment beer. And that fungus produces the protein. That is the whole company, but the day-to-day is a lot more complex than my explanation. But here's actually why that simplicity matters, because it comes down to two very distinct paths. The normal path looks like this. You raise money and you burn it for years with nothing to sell. You're betting the whole company on hitting a milestone that unlocks the next round. Most of them die in that gap. And that is why investors are so cautious here. But Supercool's path looks different. They found something they can sell now that pays for the thing that they actually want to build.

6:20 And the reason they could do that is because that molecule has two completely different businesses attached to it. The first one surprisingly wasn't obvious to me, but it's the thing they can sell today to ski resorts. The snow guns at ski resorts need cold to make snow. And this protein allows them to make snow at warmer temperatures, which means longer ski seasons and more revenue for ski resorts around the world. The second one is the moonshot, cloud seeding. The same protein molecule flown into the clouds to build snow pack to make it eventually rain. Now, the arbitrage here is that the chemical the industry has used for decades needs properly cold clouds. But Supercool's protein works several degrees warmer. And warmer means more clouds you can actually seed. The snow to ski resorts approach is genuinely rare.

7:02 Plenty of startups are bolting on side businesses to keep themselves afloat, but it creates a massive distraction and can sometimes delay the inevitable. But Supercool's cash product is also its moonshot. So, the snow business isn't necessarily a distraction from the core mission. It will actually fund it and build the manufacturing that they need anyway. Now, onto the landscape. There is already a very well-funded player here, a startup called Rainmaker, founded in 2023, and they have already raised $30 million. It sends drones up into the sky to do cloud seeding. But from a distance, it looks like they're at different layers. Rainmaker flies the drones, Supercool makes the protein molecule that goes in them. So, they're either going to become competitors or customers. So, what would have to be true in order for this to be venture scale? Well, we've actually got a comparison. A company called The Climate Corporation built weather technology for farmers, and Monsanto bought them in 2013 for around $930 million about 7 years after starting. That is the shape of the prize here. Weather technology sold into agriculture bought by a giant.

8:02 All right, so I got a crazy one for you. I was on a call this morning at 4:00 a.m. I was super tired, still trying to wake up, and I've got to give a shoutout to our episode partner, Granola here. It's an AI meeting notepad. I had it recording the whole meeting in the background, and after I discovered this feature where you can connect it to Gmail, and you can draft emails out of Granola not even having to open Gmail app. So, it will read all the notes and the next actions from the meeting and draft the email in your language. It even put embedded links for examples I was going to send them with stuff. It was insane and a huge time saver when I've got a bunch of other stuff to do. Shoutout to the Granola team. I've got a link in the description below for your first month's free. Thank you so much to the legends at Granola for making this video possible. So, what are we doing right now? We're doing a lab, is that right?

8:47 >> Let's do the lab, yeah. >> Okay. This is the spot where the magic actually happens. Not magic, science. >> It probably looks like magic though. >> Okay. Okay. >> We need to take our protein like the gene the DNA sequence and put it into our fungus so that the fungus can make the protein. We sort of verify that it's correct and then we grow it up. And I can actually show you what the strains look like when you grow them up.

9:15 >> Yeah. >> So, it grows as this sort of white milky >> Looks like yeast in water. >> It does look a little bit like yeast, but you see like little pellets that it has sort of formed like indicates that it is fungi. And so, when you literally spin down all the cells and get rid of them, you're left with the liquid supernatant and the protein is in there. >> So, from like testing in this facility to mass production at scale >> a lot bigger than 50 mil flasks. We're going all the way up to 1,000 L.

9:48 >> Do you pre-sell to the ski resorts in this in this instance and then that actually helps capital fund the production or you just using capital from investment? >> We're using capital from investment to scale up and we actually have some non-diluted funding to help us scale up as well, which has been really great. So, we're we're using a combination of that and then we would have that product, which would be a powder, and then that gets sold to ski resorts.

10:15 >> Cool. >> Yeah. Our focus right now is in snowpack augmentation. We can get to a billion-dollar company by focusing simply on snowpack. As we were talking earlier, it has all these downstream effects with the lake and and whatnot that we were chatting about earlier. And then our expansion is going into ag. So, with ag, obviously like the idea is there, right? We can deliver rain, growers need rain, and the exercise really is to figure out connect those dots. How do we deliver rain? Who do we deliver to? What makes a lot of sense? And so, we're working through that strategy right now, but we think initially what we want to do is target rain-fed areas. So, 80% of the world is rain-fed. And what's great is that the proteins are found in nature. So, what we're doing is essentially tweaking the concentrations, the amounts of those proteins in clouds to make it rain and snow on demand. So, we're not adding chemicals. The proteins get degraded in the environment very quickly and this is what I love is that it's a simple biological solution with an outsized impact in delivering rain.

11:13 >> So, this is our thermal camera and this is, for example, one of our plates that we do our freezing assay in. So, all the samples are in here and then we put it on this block and it gets really cold and it gets down to -20. And so, these little probes tell us the the in the wells and then our thermal camera looks directly at the plate and when the heat when the temperature rises, it means freezing has happened. All these little dots are the wells.

11:41 >> Yeah. >> And when you raise the temperature, these wells go lighter in color. >> Wait, can I put my finger in that? >> Yeah, put your hand. >> Okay. All right, this is my finger. >> There you go. >> Whoa. >> >> I just have two videos. I wanted to show the concentrated versus the supernatant. And this is the other video. You see the positive control freezing.

12:11 And then you start to see our samples freeze. But so yeah, you see these freeze almost at the same time. And this time you do see the most concentrated freeze first because we probably got rid of the media components. And so you see that this two integration strain does pretty well and then you see this one at the bottom does pretty well and that's just the one integration. Some of the wells freeze for the other islets, but they're mostly the higher concentrations and the lower ones do not freeze. So, there's something going on there, probably some loop out happening, maybe deleting portions of the genome. Not sure, maybe that's why we're seeing less freezing.

12:48 But yeah, I just what I thought was the most interesting thing is in the two integration strain we do see like several wells freeze at the same time. >> Yeah. >> Which is cool. >> That probably means it's concentration dependent and there's a lot more protein being made in there >> Yeah. >> than the other strains. >> It's it's a cumulative number. So, you guys you start at a really low temperature where nothing freezes and then you incrementally add fractions of protein that got activated to your total number >> I see.

13:17 >> of activated protein and if you go if you go further further further cooler cooler cooler, you end up at the coolest temperature that you checked and have the total number. >> Well, let's say for this plot, the total number of ice nuclei is here. >> Yeah. >> Right. And then the more the more concentrated ones get all activated on this side of the graph. Whereas the less concentrated ones all get activated over here. >> Then there needs to be a part two to this, which is we we go out on the field.

13:44 >> Oh, yeah. >> We test it. We go skiing, actually. >> >> Let's Let's do that for part two. >> I'm Wolfgang. >> >> I got a PhD in atmospheric sciences and I joined this company full-time I think a week or two ago. My background is in atmospheric science, specifically numerical modeling of weather and clouds. I joined for that reason to basically establish software for weather forecasting that also accounts for the seeding impacts, which we need for the attribution side to basically figure out how much more precipitation we get from cloud seeding.

14:13 >> Those who don't understand how cloud seeding actually works, right? And how common and popular it is, cuz you like explain a bit about you know, again to the simpletons like me. >> Well, the the idea is essentially in a nutshell that you fly a drone or an airplane into into a cloud that has liquid water at temperatures below freezing. At those temperatures essentially ice and liquid water can coexist, but in a lot of natural clouds there's no ice initially because there's not enough ice nuclei to form ice. And that's where the seeding agent comes in, which essentially acts as an ice nuclei and can accelerate the formation of of ice, which then forms what's called a mixed-phase cloud, which tends to form precipitation more effectively through enhancing snowfall.

15:03 >> And so this is like widely used for agriculture, right? That's like one of the big use cases. Is that >> I can't speak to that. >> >> That's definitely something that we are going to get into and our plan is to establish a framework that works for agriculture. I came from another startup, so this is my Let's see. 1 2 3 4 startup. >> Oh my god. >> You're a veteran in startup land. It's totally different beast.

15:31 >> I love it. >> >> Man, we're going to hug. How are you, man? >> Good to see you. >> Good to see you. >> Hey, so you haven't met Rohit yet. >> I'm Stephanie. >> You're like scientist meteorologist? >> I'm a scientist. >> Okay. >> Oh, yeah, Wolfgang. Yeah, Wolfgang. Cool name, too, by the way. >> I know. >> Where'd he go? >> I see he heard you were coming and he was like, oh. >> Oh, he just He just left. Did he quit, dude?

15:58 >> >> You guys are freaking me out today, man. >> Dude, this is the first time everyone's seeing you since like our episode. >> It is the first time. Yeah. Keeping a low profile. >> Dude, you got caps on, hoodies on. You're like >> It's demo day, you know, you got to dress down. >> Those who don't know who Rohit is, we did a whole episode together. It was epic. We had a lot of fun. >> We had a good time.

16:20 >> dude, what's been going on since the episode? >> my Well, transit first everybody. well, my inbox basically was flooded for 2 months. And then every time somebody posts about it again, namely you, it just dies for another week or two. So, thank you. >> >> but yeah, I just you know, venture capital is always sort of finding new companies and helping existing companies and same old, same old. So. >> We're going to a cool little spot called Plant.

16:52 Rohit's taking me on a date. >> >> Oh, it's burrito time. >> Burrito time. Burritos. >> It's cuz we saved 10%. >> Oh, you said groceries. I was like bodega. This is like This is bougie. >> It's super bougie. >> To those other founders that have got a crazy idea that want to do something this, what would you say to them? >> I would say go go. Go, go for it because you will surprise yourself as to what you can do and and how far you can push something.

17:25 So, yeah, it is it definitely is a big leap and it's scary, especially scary to do something on your own, but get a good team and get some good support. All of these companies are built with a village around it and you need to find that village. So, find your village, go try it, go do it and have fun.