The VCs Fighting Climate Crisis By Investing In Climate Tech
Venture Capitalists have been waking up to the perils of climate change and investing in the new economic era of “climate tech”. Climate tech encompasses many sectors which are working towards the goal of reaching net-zero emissions before 2050.
According to The 2018 New Climate Economy’s “Report of the global commission on the economy and climate”, since the start of the millennium, we have seen 18 of the warmest years on record. In 2017 they found “disasters triggered by weather – and climate-related hazards – were responsible for thousands of deaths and $320 billion in losses”. We are now living in a world where floods, heatwaves, droughts and wildfires are increasingly the ‘new normal.
Socially-conscious and ethical investing in climate tech “grew at almost 5 times the rate of the overall global VC market between 2013 and 2019”, according to PWC. Here are a few examples of some VC firms investing in fascinating, sustainable, climate tech businesses and startups.
Alliance Ventures is operated by automotive alliance Renault, Nissan and Mitsubishi. Launched in 2018, the firm targets “technology and business model innovation” in areas such as vehicle electrification, autonomous driving and new mobility services. Within its portfolio is a Chinese Level 4 autonomous taxi service called We Ride, as well as Ionic Materials who have developed a new, safer alternative to the lithium-ion battery that makes “safe, long-range electric vehicles become a reality”.
Following the investment trend in vehicle electrification is the corporate venture capital arm of BMW. They have developed a green portfolio by investing in emission-lowering electric vehicle (EV) tech such as sustainable e-scooters, e-bikes and EV charging solutions.
They are also investing in renewable energy; Prometheus Fuels provides the technology to capture atmospheric carbon dioxide and water vapour and convert it to ethanol for fuel. Ethanol is considered a better alternative to petrol due to lower carbon dioxide emissions.
Breakthrough Energy Ventures is USA based and set up by Bill Gates with a very clear goal to get to zero emissions through “unprecedented technological transformation”. It is a $1 Billion fund investing in early-stage startups with disruptive technologies that allow positive, sustainable innovation by challenging existing products and services. Their portfolio is completely green, only investing in entrepreneurs’ businesses that “can have a significant impact on climate change at scale”.
Canadian green VC Cycle Capital is a member of the Cleantech Group, and is dedicated to investing in renewable energy and inventive climate solutions. Amongst their portfolio is Enerkem who converts non-recyclable municipal solid waste to biofuel, and LUFA Farms who are building the world’s first urban rooftop farms – a new agricultural production solution.
High-Tech Gründerfonds is the biggest cleantech VC in Germany, with 10% of its portfolio invested in cleantech companies. It is a leading German seed investor, managing 3 funds amounting to €820 Million in 2019. Their portfolio is 13 pages long and includes hydropower and smart infrastructure investments.
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Header Image: Alliance Ventures has invested in and backs WeRide, an autonomous vehicle startup.