The top 13 seed stage climate tech VCs to watch
Sustainability is back.
In the early 2000s, a wave of funding referred to as “Clean Tech 1.0” built a generation of climate tech startups, but many of the investments just didn’t pan out. While there was an exodus of VCs from the space after the sector crashed and burned post-financial crisis, a portion of investors doubled down on climate instead of running away.
And those who stuck it out say we’re only in the early innings of climate tech innovation—and returns. “I think the whole psyche of particularly the American public really started to shift from being either skeptical or disinterested in any of the climate science to now seeing wildfires, floods, hurricanes becoming more and more personally present, not just in the news, but really affecting many Americans,” said Abe Yokell, investor at Congruent Ventures.
“We used to have ‘internet funds’ in the late ’90s, and then everything was an internet fund. I don’t think it’s hyperbolic to say that climate will have a similar impact; everything will have some sort of a climate lens to it,” said Andrew Beebe, investor at Obvious Ventures.
And for founders looking to fund their companies, a bit of good news: Many of these investors are approachable. “About half of our portfolio companies came from people who weren’t existing in our network out of the gate,” explained Rayyan Islam, who invests at 8090 Industries.
Fortune compiled this list in partnership with NFX, a seed-stage venture capital firm based in Silicon Valley and the creator of the investor database and network Signal. And we also asked each VC for their best advice about what founders can do to make their stories stand out.
Duncan Turner, SOSV
As a partner at SOSV and managing director of HAX, a hard tech incubator, Turner looks for companies that are the “picks and shovels” in disrupting traditionally pollutive supply chains, like agriculture and energy use. He uses his design engineering background to help founders get their product to market—a core skill that can be especially challenging for founders when the market constitutes a huge disruption in infrastructure.
Turner turned to climate investing when he realized as an entrepreneur the scale of industrial production’s impact. “I’d gone from trying to buy sustainable goods to suddenly saying, ‘Holy crap, this is a huge opportunity here,’” he explained. “We are normally the first institutional investor, and we will be taking [founders] to our labs, helping them with the science, and helping them with the engineering, so it’s a really intense relationship,” he said of working with founders.
Biggest wins: VoltStorage, Unspun, Neptune Robotics
How to stand out: Turner is investing in innovation that will enable the U.S. to implement sustainable infrastructure and electrification on a large scale: for example, energy storage technology and electrochemistry tech that allows minerals required for electrification to be effectively processed in the U.S. “There are two things we’re looking for: groundbreaking technology being leveraged by a founder who has a serious passion for something that’s wrong with the world,” he said.
Abe Yokell, Congruent Ventures
While Yokell founded his current climate-focused firm, Congruent Ventures, in 2017 with Joshua Posamentier, he has been a climate investor for decades. After the Clean Tech 1.0 boom and bust of the 2000s, Yokell decided to stay in climate tech even as others ditched the sector. He explained that he grew up hiking in Colorado, and that his sense of purpose for climate investing keeps him interested in the grind of being a VC. “We have to kind of mainstream climate in order for it to scale, and that’s one of our founding purposes,” he noted. Yokell led the first venture round in Enphase Energy, which now has a $23 billion market cap.
Biggest wins: Enphase Energy, AMP Robotics, Span.IO
How to stand out: “One thing we tend to focus on is the founder-market fit. We look for [founders] who have clear communication, not just about what the company’s doing, but how they expect to bring a product or service to market,” he explained. But no market or tech is off limits. “If a company comes in with a clear narrative, telling us that a market we generally don’t like is actually accessible for very rational reasons that we agree with, that’s a green flag, we love that,” he explained.
How to get in touch: “We actually will look at every single one of our emails; we don’t always respond to them, but if there’s something interesting in there, the deal team reads every one of those emails,” he noted.
Amy Duffuor, Azolla Ventures
As an investor, Duffuor ventured out to start her own firm because she saw a segment of neglected climate tech founders and companies she specifically wanted to focus on. “My approach to climate is really a human-centered approach, and one that I think really draws on intersectionality,” she explained.
Duffuor began her career as an immigration researcher working with marginalized West African migrant communities in the U.S. and U.K., and wanted to find a career that used real world investments that were socially and environmentally driven. “Given my background, [impact investing] was a way to marry the social justice stuff I had focusing on migration, with the business acumen that I gained,” she explained. She is also a managing director for Prime Impact Fund, and she is on the board of portfolio companies Clean Crop Technologies and Ovipost.
Biggest wins: Lilac Solutions, Clean Crop Technologies, Carbon Reform
How to stand out: Duffuor said that she looks not only for winning companies, but founders who are thinking about how their tech engages with communities. “Climate justice is becoming an area that I feel founders are going to need to be more thoughtful about—so community engagement and community deployment,” she explained.
How to get in touch: Duffuor said the best way for founders to reach out is through the Azolla Ventures website. She also holds monthly office hours to connect with founders.
4. Micah Kotch, Blackhorn Ventures
While many of the investors on this list look for hard tech infrastructure, Kotch focuses on digitizing industries as a path to sustainability. “In our thesis, we’re really focused on [ideas] that can go to market quickly and can have an impact quickly, because we have these really ambitious climate goals that we have to hit essentially by 2030,” he explained.
After working as an entrepreneur during the first dotcom bubble, he launched New York City’s first sponsored tech incubator under Mayor Michael Bloomberg’s administration in the wake of the financial crisis. As an investor at BMW Group, Kotch founded the program Urban-X, which invested in about 70 early-stage companies focused on developing cities of the future, according to Kotch. At Blackhorn, Kotch has focused on investments that can digitize and disrupt the most pollutive industrial sectors: energy, transportation, construction, and supply chain logistics. As a Brooklyn native, Kotch says he sees a growing hub of climate investors based in New York, and specifically his home borough.
Biggest wins: Blueprint Power, Versatile, Evolve Energy
What he’s looking for now: “We’re interested particularly in technology like machine learning and artificial intelligence that are providing tools to these interconnected industries,” he noted.
How to get in touch: Founders can contact Kotch on the Blackhorn website and on Twitter.
Tim Woodward, Prelude Ventures
Woodward made his first investment in the climate sector in 1995—and has brought many of the lessons of the Clean Tech 1.0 wave to the current investing strategy he has honed over a nearly 30-year investing tenure. Before becoming managing director of climate-tech focused firm Prelude, he was a managing director at Nth Power. He led the firm’s investments in Evergreen Solar, Comverge, and Proton Energy Systems. Since joining Prelude in 2013, Woodward has been able to help Prelude build a portfolio of over 60 companies. “We’re not afraid of getting involved well before there’s real product and real revenue,” Woodward explained. “We like to be part of the team that’s involved early and helping form the management team and product strategy.”
Biggest wins: QuantumScape, LuxWall
How to stand out: “I tend to ask, ‘Where were there real friction points in the marketplace? Where’s their technical need for a better product? And then diligence: Is this something that customers really care about?’” he noted.
Rayyan Islam, 8090 Industries
The 8090 Industries cofounder and partner explained that seeing the juxtaposition between his home in Dallas and where his family was from in Bangladesh sparked his first interest in the climate sector. “My earliest memories were seeing power going out multiple times a day in Bangladesh, so that was a big shaping factor for me personally, because it exposed me to what energy insecurity looks like at a young age,” he explained.
Now, 8090 industries works to decarbonize some of the most pollutive industries in the world—with the backing of current industry titans. Islam explained that the firm’s limited partners are some of the world’s largest industrial and energy families. “So oftentimes, when we work with entrepreneurs, we can speak from the lens of an offtaker, feedstock supplier, infrastructure and project developer, and power producer,” he explained. “This allows us to really approach business building for industrial climate technology companies as true partners,” he said.
Biggest wins: Circ, Infinium, Cemvita, Gold Hydrogen
How to stand out: “We like to say we look for next-generation industrialists,” he explained. “You’re basically having to convince industries that operated the same way for 100 years to adopt something completely new. So can you do that? From a personality perspective, that’s one thing that’s important in a founder,” he explained.
How to get in touch: If you don’t have an investing network, don’t be discouraged. “We spend time looking at founders, and oftentimes they come completely out of our networks. If we find something compelling—whether it’s an article we read or a scientist who’s working on something, we’ll pitch ourselves and reach out,” he said.
Katie Rae, The Engine
Rae tops venture firm The Engine, which beyond being a fund, is an investing arm that spun out of MIT. Yet Rae invests in an array of companies and sources founders from beyond just university walls. Before focusing on hard tech and climate, Rae was an acclaimed investor at Techstars and Project 11 Ventures, who made winning bets on firms like PillPack and Bevi. Throughout her career, she has invested in more than 100 companies. “When we founded The Engine, the core thesis was really, ’How do you look at what the world’s biggest problems are? And what what role could technology play in expanding the arc of those problems in the right direction?’” she explained.
Biggest wins: Boston Metal, Commonwealth Fusion Systems, Form Energy
How to stand out: Rae is looking for gritty and driven founders. “I’ve always bet on people,” she noted. “Can they actually do the work? Do they have the expertise? And is it their mission? That’s central to our thesis. And is what they’re doing just so much better than what already exists? That’s what you have in the early stages.”
How to reach her: “We take cold pitches; we meet people all the time,” she said. You can reach out via email at katie@engine.xyz.
Andrew Beebe, Obvious Ventures
Beebe—who went from being an internet entrepreneur to a solar entrepreneur and then a top solar executive in the Clean Tech 1.0 solar space—has proved he can spot the next wave of innovation before it reaches household-name status. Now, as a VC, Beebe is looking for other founders who can do the same thing.
“It took a while for investors and entrepreneurs to realize that we were going to digitize the global economy back then, and it sounded very grandiose and lofty, but that’s in fact what we’ve been doing for the past 20 years,” he explained. “About 10 years ago, many of us realized that about climate, and we are now just hitting the inflection point of substantial recognition of the investment opportunity within the decarbonization of the global economy.”
Biggest wins: Mosaic, Lilium, Amply, Sighten
How to stand out: Beebe is looking for founders who aren’t paying attention to current hype, but forecasting what’s ahead. “We look for markets that may not be used today, but we can squint and in our own conviction believe that something is about to be huge,” he said. “We’ll look for repeat founders; we’ll look for people who are deeply technical and have that sort of leadership spark,” he added.
How to get in touch with him: “We are at the seed and early stage if people are focused on areas that are of interest to us; we want to hear from them. So just coming in directly through the website is a great way to do it,” he said.
Sara Chamberlain, Energy Foundry
Chamberlain filled a range of roles in the climate sector before cofounding Energy Foundry, which focuses on early-stage VC funding for climate. “I pressed in a few different directions to get some exposure across disciplines, but ultimately I was just determined to work on the things I was passionate about, [which were] the environment, entrepreneurship, and technology,” she explained.
As an early-stage-focused firm, Energy Foundry looks for companies with novel technology that speaks to a huge market opening. And she’s seen huge success as an early investor. “Early stage is challenging for most investors because there are multiple types of risk to manage, including customer, technical, and financing,” she explained. Chamberlain says Energy Foundry portfolio companies have raised over $100 million.
Biggest wins: NanoGraf, e-Zinc, Volexion
How to get her attention: “We typically look for a novel technology that a company can build its competitive advantage upon. In addition, we look for a significant market shift or gap that a company may be uniquely positioned to capture,” she noted.
How to reach her: “I always appreciate it when founders attempt to get connected via a shared connection or ecosystem catalyst like any of the major incubators, but companies can also get in touch by sending an email or application via our website.”
Stonly Baptiste Blue, Third Sphere
While many investors on this list were previously entrepreneurs, Blue was particularly ahead of the curve, launching his first company right out of high school—an IT consultancy, which he eventually sold. He dropped out of college to continue his entrepreneurial journey, starting software and hardware companies, the biggest being an enterprise cloud platform that is now part of public company NetApp. In 2013, he founded Third Sphere with fellow investor Shaun Abrahamson to laser in on climate and fill the demand for capital in the sector. “We started with the problem first: lack of funding and too much fear and confusion about climate investing,” he explained. “Ten years later, much of that fear, uncertainty, doubt still persists as it relates to hardware and female or other underrepresented founders,” he added.
Biggest wins: Covetous, Bowery, Onewheel
How to get his attention: Blue said he and Abrahamson look for bold ideas that fix complex problems. “We tell other investors to send us the deals that make them LOL. The line between crazy and sufficiently ambitious in climate can be hard to figure out sometimes,” he noted. “We like founders who are unreasonably obsessed with problems and customers and not just technology.”
How to get in touch: “Our pipeline has a mix of cold, lukewarm, and warm introductions,” he said. “We have a pretty recognizable brand and an open-door policy on people reaching out,” added Blue.
Sundeep Ahuja, Climate Capital
Ever since Ahuja decided climate was the issue he wanted to focus on, he has been willing to try a variety of approaches to make an impact—serving as an advisor to climate firm Mosaic, launching a sustainable product company, and even writing an entire novel that moves readers to be more conscious of the environment. “It really wasn’t until 2018 when I realized there’s enough [going on] in climate now that I can actually focus on this,” he explained. He officially launched his firm, Climate Capital, which has made over 200 investments since its founding, partially because it has been able to leverage microfunds and special purpose vehicles to be so active in the space.
Biggest wins: Mosaic, Swell, SINAI
How to stand out: Ahuja stays laser-focused on the founding team and whether they can explain their tech to investors. “So much of it is just, ‘Who is this person?’” he said.
How to get his attention: The best way to reach Ahuja is by email, and he said he “loves to see everything. If it’s not a fit for us, we’ll mention it to another firm who potentially could be a fit.”
Rajesh Swaminathan, Khosla Ventures
Coming from a chemical engineering background, Swaminathan realized while at Harvard that much of his expertise could be applicable to solar batteries and a whole host of other climate tech innovations. As a leader in the climate investing space, Khosla Ventures is one of the only firms that existed during Clean Tech 1.0 and continued investing in the sector after the 2000s. “Most people think startups failed Clean Tech 1.0, but I would say investors failed,” Swaminathan said.
Part of what makes Khosla Ventures’ approach stand out is its climate investment capital structure, which allows the firm to invest in capital- and time-intensive climate companies that often take years to develop their technology. The firm raises three investment vehicles at the same time about every two and a half years. “We have a $400 million seed fund, so we can write $2 million to $7 million checks for early-stage companies,” he explained. For Khosla’s larger funds, the checks for startups keep getting bigger, too.
Biggest wins: Enphase Energy, Solid Power, Commonwealth Fusion Systems
How to stand out: The areas he is most excited about are nuclear fusion, hydrogen, steel, and other construction plays. “What are the craziest ideas to disrupt that sector?” he said he asks himself—and founders. He uses the analogy of “aspirin versus vitamins” when thinking about the urgency of a given solution: “If it’s aspirin, you wake up in the middle of the night to get the medicine; [that’s not the case with] vitamins, so how much of a pain point are we solving?”
How to get his attention: “Looking at the 15 companies I’ve invested in since coming here, it’s across the spectrum; many reached out, and many we read [an academic paper] and said, ‘Hey, this looks like a crazy idea. Let’s go and talk to the scientist and see if he wants to build a company.’”
Emily Kirsch, Powerhouse Ventures
Kirsch is both an entrepreneur and investor focused on decarbonization. In 2013, she founded Powerhouse, a firm with an innovative approach to incubating and accelerating climate tech startups when few others were targeting the space. The firm now aims to help large companies source, connect with, and acquire promising climate tech startups, filling a gap in the industry for legacy corporations unsure about how to innovate sustainably. Some of Powerhouse’s clients have included Google, Schneider Electric, and Enel.
Biggest wins: Raptor Maps, Terabase
How to stand out: Kirsch specifically seeks early-stage startups building digital infrastructure.
This story was originally featured on Fortune.com
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