Climate Insider Brief:
- Breakthrough Energy Ventures, a climate venture capital firm backed by Bill Gates, has raised $839 million for its third flagship fund, BEV III, marking the largest climate fund raised this year.
- Despite a general retreat from other venture sectors, investors have shown strong interest in early-stage climate funds, with climate-dedicated funds attracting nearly 5% of all LP capital commitments globally in the first half of 2024.
- Breakthrough Energy Ventures has made early investments in several successful climate startups, including Boston Metal, Redwood Materials, and Pivot Bio, showcasing its effective strategy and significant impact in the climate tech sector.
Bill Gates-backed climate venture capital firm, Breakthrough Energy Ventures (BEV), has successfully raised $839 million for its third flagship fund, BEV III, according to a recent regulatory filing, as reported by Pitchbook. This achievement marks the largest climate fund raised so far this year.
Founded in 2015 and based in Kirkland, Washington, Breakthrough Energy Ventures launched BEV III in July 2023. This follows the closure of its second fund in 2021, which amassed $1 billion. Although the final target amount for the new fund is still unclear, the substantial sum raised underscores the confidence investors place in BEV’s unique approach to climate tech investing.
Despite the reluctance of Limited Partners (LPs) to invest in other venture sectors, they have shown a strong interest in early-stage climate funds. In the first half of 2024, climate-dedicated funds attracted nearly 5% of all LP capital commitments globally, as reported by PitchBook’s 2024 Climate Tech Funds Report. This trend highlights the growing enthusiasm for climate-focused investments amid increasing awareness of environmental issues.
However, early-stage climate investing carries notable risks, particularly the extended time horizon for exits and the significant capital required to scale innovative hardware technologies. These challenges notwithstanding, Breakthrough Energy Ventures has distinguished itself in the venture capital landscape by focusing exclusively on climate-related investments from its inception. Gates’ extensive connections in the climate sector and the fund’s pioneering strategy have propelled BEV into the forefront of early-stage climate investing, especially as climate dealmaking surged in 2020.
Breakthrough Energy Ventures has made strategic early investments in several prominent climate startups. For instance, it led Boston Metal’s Series A round at a $55 million valuation, which was last valued at $860 million in 2023. Similarly, it participated in Redwood Materials’ Series B at a $217 million valuation, with the company reaching a valuation of $5.25 billion by 2023. Another notable investment includes Pivot Bio’s Series B at a $200 million valuation, with the company valued at $1.7 billion in 2021.
As Breakthrough Energy Ventures continues to attract significant capital and support for its climate-focused initiatives, it remains a pivotal player in the effort to address global environmental challenges through innovative technological solutions.
SOURCE: Pitchbook
Featured Image: Credit: Breakthrough Energy Ventures
