Climate tech, like many sectors, faced early-decade hype that tempted both founders and VCs with easy funding due to low interest rates and eager investors. Yet, Clean Energy Ventures (CEV) chose a cautious path that’s now proving fruitful.
Co-founder Dan Goldman explains their COVID-era reflection: “We needed to be super careful… this is looking like a bubble.” Though having raised their first fund pre-pandemic, CEV hadn’t fully deployed the capital, prioritizing discipline over rushing.
This paid off when the bubble deflated, leaving CEV with less remaining capital, but also a more stable market to raise their second fund in late 2022. Within half a year, they’d exceeded their $200M target, pausing to deploy some before institutional demand pushed them to the final $305M.
Goldman notes the support from existing limited partners (LPs), allowing this increase, which is notably larger than their initial $110M fund. CEV’s focus remains early-stage climate tech, with the addition of “pre-growth” investments: larger checks for startups with proven tech and market presence, but still early in adoption.
This fills a gap that worries investors, especially with hardware-heavy climate tech facing a “valley of death” before commercialization. CEV addresses this by reserving 30-40% of the new fund for follow-on investments in these pre-growth companies, using various financial instruments alongside initial checks ranging from $500K to $8M.
Institutional investors like Builder’s Vision, Carbon Equity, and the Grantham Foundation joined the fund, along with industry LPs from Turkey, Thailand, and Germany. These international partners are drawn to CEV’s focus on bringing climate tech to their regions and reducing greenhouse gas emissions.
The successful fundraise showcases CEV’s strategic approach amidst market volatility, positioning them to further support the climate tech sector’s growth.