Top Pioneering Venture Capitalists in the Realm of Early-Climate-Tech Innovations
In 2024, despite anticipated policy shifts in the US, global capital for climate tech investing surged, with climate funds adding an impressive $47 billion in assets under management, a notable 20% increase from the previous year. Although larger institutions like TPG Inc and Brookfield Corp primarily drove the uptick, early-stage investors continued to play a pivotal role in financing groundbreaking innovations and pioneers in this sector.
Investing in early-stage climate startups presents both immense opportunities and unique challenges. Unlike software or consumer tech startups, climate ventures often involve hardware innovations, deep science breakthroughs, and regulatory complexities, which make them capital-intensive and require longer time horizons to scale. Areas such as climate finance, direct air capture, next-generation batteries, carbon-free cement, and alternative proteins are some of the main attractions for early-stage capital.
To shed light on this thriving sector, I spoke with five of the most active early-stage climate tech investors to discuss their investment strategies and perspectives on the current climate investing landscape.
- ImpactAssets:
Margret Trilli, who leads impact investing firm ImpactAssets, manages $3.5 billion and conducts approximately 250 to 350 private market investments annually. In evaluating investments, she seeks companies that align with her firm's impact-driven thesis while demonstrating financial viability. Trilli emphasizes market fit, execution capability, and realistic modeling over flashy projections. She sees climate solutions, particularly energy innovation and natural solutions, as an attractive focus, given the growing market demand for sustainable solutions.
- Climate Capital:
Michael Luciani, the co-founder of Climate Capital, is a syndicate of 3,000 angel investors actively funding early-stage climate tech companies. Climate Capital's investment focus spans all climate verticals, with a dedicated seed fund and a climate biotech fund, Juniper, led by Luciani, which focuses on bioindustrial solutions. Luciani prioritizes startups that offer transformative climate solutions with strong commercialization potential. He believes the current climate presents an opportune time for investing due to reduced competition and clearer market pathways.
- Collaborative Fund:
Sophie Bakalar's investment strategy at Collaborative Fund centers on backing companies that are mission-driven while providing a superior product without requiring customers to make sacrifices. By applying the "villain test," Bakalar ensures that even those indifferent to sustainability would still choose the product for its value alone. Collaborative Fund has raised multiple funds and recently launched a $125 million vehicle. Bakalar describes the current era as a golden age for climate tech investment due to the convergence of technological breakthroughs, rising consumer demand, and large-scale capital inflows into energy transition and sustainability.
- Impact Science Ventures:
At Impact Science Ventures, Robert Ethier takes a pragmatic approach, seeking companies that can compete purely on cost and quality, independent of government incentives. He views post-hype cycles as the best time to invest, as weaker competitors exit, and stronger companies emerge with improved access to talent, customers, and capital. Ethier believes the current downturn in ESG hype is a cleansing phase, eliminating unsustainable business models while strengthening those with robust fundamentals. Despite shifts in government policy, Ethier remains optimistic, citing fundamental economics, animal spirits, and private capital as key drivers in maintaining momentum for sustainable investments.
- Street Life Ventures:
Laura Fox runs Street Life Ventures, a fund investing in pre-seed and seed-stage B2B startups at the intersection of cities and climate. Fox's investment framework focuses on companies solving significant pain points with beta-stage products that have completed initial pilots. Fox believes that now is an exceptional time to invest in climate solutions, even amid political shifts, as renewable energy adoption doubled during the previous Trump administration due to economic reasons, and over 100 US cities have committed to net-zero targets, creating long-term policy momentum.
While climate investing is still evolving, its momentum is undeniable. Governments worldwide are setting ambitious net zero targets, corporations are prioritizing sustainability and investors are recognizing the financial and impact-driven potential of climate tech. As early-stage climate investors continue to back breakthrough innovations, they are not just placing bets on future clean technology; they are actively shaping the next industrial revolution.
As we witness the growing importance of early-stage climate investments, there is a need to address challenges such as funding gaps and traditional venture capital models to better suit the needs of climate tech startups. Innovative approaches, like catalytic capital, revised funding models, and corporate venture capital, are becoming increasingly prevalent to bridge those gaps. With the fusion of technological breakthroughs, market demand, and large-scale capital inflows, the future of climate tech investing looks promising.
- The surge in global capital for climatetech investing in 2024 was not just limited to large institutions like TPG Inc and Brookfield Corp, but also saw significant backing from early-stage investors who continue to finance groundbreaking innovations in the sector.
- ImpactAssets, led by Margret Trilli, is one such early-stage investor, managing $3.5 billion and conducting over 250 private market investments annually, focusing on companies with financial viability and market fit in climate solutions.
- Michael Luciani, co-founder of Climate Capital, spearheads a syndicate of 3,000 angel investors actively funding early-stage climate tech companies, particularly those offering transformative solutions with strong commercialization potential.
- Sophie Bakalar at Collaborative Fund follows a strategy of backing mission-driven companies that can offer superior products without sacrifices, investing in the current golden age for climate tech due to technological breakthroughs, rising consumer demand, and large-scale capital inflows.
- At Impact Science Ventures, Robert Ethier seeks companies that can compete purely on cost and quality, investing during post-hype cycles when weaker competitors exit and stronger companies emerge with improved access to resources.
- Laura Fox, running Street Life Ventures, invests in pre-seed and seed-stage startups solving significant pain points in cities and climate, believing that the current era is an exceptional time to invest in climate solutions despite potential political shifts, as renewable energy adoption and city net-zero commitments create long-term policy momentum.
