Big Idea

The EU's newly adopted battery regulation “REGULATION (EU) 2023/1542” is set to redefine the battery tech landscape, emphasizing sustainability, safety, and competitiveness, and presenting unparalleled opportunities for tech startups in battery monitoring and recycling.

Why It Matters

The EU's comprehensive approach to battery lifecycle management, from production to end-of-life, underscores the strategic importance of batteries in the green transition. This regulation not only champions environmental conservation but also positions the EU as a global leader in sustainable battery tech innovation. These EU regulations are expected to set the blueprint for global battery regulations going forward.

Key Details

• By 2030, the demand for batteries is anticipated to surge more than ten-fold, driven primarily by the exponential growth in electric mobility.
• The regulation introduces stringent sustainability rules, including mandatory minimum levels of recycled content for various batteries, such as 16% for cobalt, 85% for lead, and 6% for both lithium and nickel. Batteries will have to hold a recycled content documentation dubbed a “Battery Passport”..
• The regulation covers all batteries and introduces new categories for batteries, such as electric vehicle batteries and light means of transport batteries, leading to specialized recycling and monitoring solutions.
• The emphasis on a circular economy, with targets for waste battery collection and lithium recovery, presents a ripe market for startups focusing on innovative recycling techniques and monitoring systems.

What's Next

With the regulation now adopted, the focus will shift to its implementation across Member States. The comprehensive approach to battery lifecycle management, combined with the anticipated surge in battery demand, will inevitably lead to technological advancements in battery production, recycling, and waste management. The most important deadlines are in 2026 and 2030 so this must be addressed quickly.  

Dive Deeper

The European Green Deal's emphasis on electromobility and the strategic importance of batteries highlights the intertwined relationship between sustainable development, green mobility, and clean energy. The regulation's focus on the entire life cycle of batteries, from production to end-of-life, underscores the importance of recycling markets and the recovery of valuable materials.

Catalysts

Startups focused on the following areas could provide a big impact. 

Digital Integration and Monitoring: The push for digital passports for batteries and real-time monitoring systems indicates a convergence of tech and sustainability. Startups that can integrate AI, IoT, and other advanced technologies to enhance battery monitoring will be at the forefront of this convergence, offering investors a chance to be part of a tech-driven sustainable revolution.

Battery Recycling: The regulation aims to update the management of waste batteries to protect the environment and human health. It emphasizes the transition to a circular and climate-neutral economy, and sets minimum levels of recycled materials which can create significant economic opportunities for those that can provide those elements. The regulation sets a target for lithium recovery from waste batteries of 50% by the end of 2027 and 80% by the end of 2031.  

Sector Highlight

Green Technology and Sustainable Development

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Big Idea

Tokenized real-world assets (RWAs) represent tangible and intangible assets, from real estate to government bonds, that have traditionally been a part of the conventional financial system. As these RWAs transition to the blockchain, they are shaping the future of finance. In a bullish forecast, 21.co, a leading digital asset firm, projects a potential $10 trillion market by 2030.

Why It Matters

Real World Assets anchor immense global wealth. With the convergence of traditional finance and cryptocurrency markets, tokenized RWAs offer enhanced efficiency, liquidity, and the exciting potential to democratize wealth opportunities for all. While there are regulatory and technological nuances to navigate, the potential for widespread adoption is immense and promising.

Key Details

• Tokenized assets could grow to $10 trillion by 2030, with current values at $116 billion, primarily on the Ethereum blockchain.
• From the foundational technology of Bitcoin and Ethereum, a proliferation of blockchains now enables real-world assets to be represented digitally, and these blockchains are attracting significant attention and funding.
• RWAs are not new, and they were somewhat of a meme for years. But after sticking around so long, traditional financial institutions seem to be embracing the trend. This could lead to a seismic shift in sectors from real estate to government bonds in asset management and trading.
• Major financial entities like Bank of America, and Boston Consulting Group, are tracking and predicting the rise of tokenized assets, highlighting the significance and potential of this trend.

“This trend is expected to result in exponential growth in the tokenized RWA industry, particularly as more liquidity flows into the space. This will lead to a more sustainable bull market with less capital flight at its peak.” - Matthijs de Vries, co-founder of AllianceBlock.

What's Next

The world moves from digital where there is less friction to physical where things are not as easy to read/write. The first industry to undergo a change in RWA will likely be the next frontier of digital assets such as internet connectivity and telco services which are a natural forward point after electronic currency (mobile phone airtime is already used as a quasi currency all over the world). We will be looking toward companies involved in crypto enabled telco services. Expect an influx of institutional investors, a more regulated environment, and new platforms that simplify the tokenization process. Integration of tokenized assets into everyday financial products and services is on the horizon.

Dive Deeper

The tokenization of real-world assets isn't just about numbers and forecasts. It represents a paradigm shift in how we view ownership, investment, and wealth distribution. As digital dollars pave the way, other assets like government bonds, real estate, and even art are joining the fray, signaling a future where digital and tangible worlds seamlessly coexist.

Real-world assets, ranging from real estate to government bonds, are being integrated onto the blockchain. With Ethereum leading the pack in tokenized assets, boasting over 6 million daily users. The realm of tokenized real estate, valued at $613 trillion in 2023, is particularly noteworthy, with a 102% growth in on-chain real estate between Q1 and Q3 2023. The growth of tokenized U.S. government bonds, in particular, reflects the increasing trust and acceptance of this digital transition.

Ideas

Two platforms to keep an eye on are https://metablox.io/ which is working in the digital realm of RWA. Centrifuge https://centrifuge.io/ is a bridge between RWA and blockchains, tokenizing assets to allow for the creation of lending markets using those assets.

Sector Highlight

Cryptocurrency and Blockchain Integration

Big Idea:

Sanofi (Nasdaq: $SNY), a multinational pharmaceutical and healthcare company, in a strategic move towards becoming a frontrunner in AI-powered drug discovery, invests $10 million in California-based BioMap. This collaboration aims to leverage BioMap's cutting-edge AI engine, turning data sets into a biological map of proteins, advancing drug discovery across immunology, neurology, oncology, and rare diseases.

Why It Matters:

The partnership highlights the convergence of Biotech and Tech and validates that AI has important industry applications beyond consumer tech. Sanofi's commitment to being the first pharmaceutical company powered by AI at scale gains momentum with this collaboration. The partnership with BioMap aligns with Sanofi's broader strategy to harness AI and data science capabilities, optimizing the discovery and development of groundbreaking biotherapeutics.

Key Details:

• Data Point: Sanofi invests $10 million upfront, with the potential for over $1 billion in subsequent modules covering development and milestones.
• Innovation: BioMap utilizes a foundational model-based approach, creating a biological map of proteins through an AI engine.
• Impact: The collaboration aims to revolutionize drug discovery, promising superior prediction of potential protein therapies in various medical domains.

"By combining Sanofi’s proprietary data sets, digital infrastructure, AI, and data science capabilities with BioMap’s AI engine, we can optimize the process of discovery and development of breakthrough biotherapeutics." - Matt Truppo, Sanofi’s Global Head of Research Platforms.

What's Next:

The collaboration marks a significant step towards Sanofi's ambition to lead in AI-driven pharmaceuticals. The partnership sets the stage for transformative advancements in drug discovery, hinting at a future where AI plays a pivotal role in optimizing treatment development.

Dive Deeper:

In the broader landscape of AI-driven advancements, Sanofi's strategic collaborations with Exscientia, Atomwise, Insilico, and Owkin form a cohesive tapestry, positioning the pharmaceutical giant at the forefront of AI innovation. Committing over $2 billion total to these companies, this multifaceted approach is integral to Sanofi's vision of becoming the inaugural pharmaceutical company powered by artificial intelligence at scale.

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In the broader context of AI's transformative influence on the landscape of pharmaceuticals, Google DeepMind's Alphafold stands as a groundbreaking example. Recently acclaimed for predicting protein structures with remarkable accuracy, Alphafold exemplifies the prowess of AI methodologies in understanding complex biological systems.

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As Sanofi assembles an extensive AI toolkit through collaborations, DeepMind's success with Alphafold serves as a testament to the potential of AI in unraveling intricate biological processes. This synergy between Sanofi's collaborations and breakthroughs like Alphafold heralds a new era where AI is not just a tool but a transformative force in the sector.

Sector Highlight:

Pharmaceuticals, AI-driven Drug Discovery

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