Backing the Builders: NorthX's playbook for scaling climate hardtech

INTERVIEW

TALKING POINTS

• Lessons learned from Sarah’s time in industry and the Prime Minister’s Office

• Why early hardtech is still so difficult to fund in Canada

• Why the NorthX model operates more like a VC fund than a typical grant

• What successful industry partnerships look like in practice

• How NorthX decides which areas (like wildfire tech or CDR) to focus on

• Why Canadian companies need to think globally

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DEEP DIVE

🚀 Inside the NorthX playbook for scaling climate hardtech

For Sarah, the critical gap for early hardtech ventures is about trust as much as it is about capital: Trust from investors and commercial partners that a startup is investable or ready to integrate into a customer’s processes. That trust is particularly critical for climate hardtech, where ventures are often working with industrial partners who can’t afford failure in their processes.

The NorthX team zeroes in on taking these critical risks off the table - whether it’s in the business model or technology - and building certainty for investors.

Simply providing non-dilutive funding isn’t enough on its own though, and NorthX has put together a unique model to take it to the next level. As Sarah puts it, “we try to operate much more like a venture capital firm”. That means:

• A team with expertise, from MBAs to engineers, who can evaluate the tech and the business potential

• Looking at the tech, team and market to assess which companies are most likely to succeed

• Tapping into their network of industrial stakeholders and investors (which has led to ~$200M in investments)

• A market- and customer-led approach, speaking directly with experts and users to understand their problems and where there’s tech leverage

• Going beyond a tick-box approach and “being in the work” alongside startups to help them break down problems along the way

Climate tech as industrial strategy

NorthX’s model is closing this critical gap where too many promising ventures stall between the lab and their first buyer. To Sarah, it’s too big of an opportunity for Canada to ignore. From battery plants to mineral processing to storing carbon in mining waste, “climate tech is industrial strategy … exactly the solutions that the country and the world needs right now”.

Sarah shared some key insights on how climate tech can punch through the noise and bring this message to the world:

1. Build the economic story and how climate solutions are a part of diversifying and deepening Canada’s economy

2. Don’t overcomplicate engagement with government - three paragraphs on how to fix a tax credit can be more actionable than a 100 page report

3. Look globally: Founders may be headquartered in Canada, but should look globally for partners and customers from day one.

“When you think about our resource base, the engineering prowess this country has - we put all those ingredients together and that is actually what can help us win as we think about the next half century.”

Parting Thoughts

A few things that stuck with me from our conversation:

• Climate opportunity. Climate tech needs to be a bigger part of the national economic conversation to generate political and public buy-in. Climate solutions aren’t a “nice to have” - they’re becoming a core part of the economy and even creating net-new sectors.

• Active participant. NorthX isn’t just sitting back and waiting for companies to go through their grant application process. They’re scanning the environment for opportunities and leverage, and have a perspective (informed by expertise) on which projects are most likely to succeed commercially.

• Scale what works. NorthX has unlocked almost half a billion in follow-on investments, generating a 10:1 impact. How do we scale what’s working in that model across the country? And how can government be more creative in deploying catalytic capital for greater impact?

I hope you enjoy this episode, and let me know what you take away from it.

Justin