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A Chronicle of Climate Tech Venture Capital

Peter Sun
8 min readFeb 1, 2021

Three charts on why this is more than just another bubble

I believe financial incentives can — and should — drive impact.

Three years after co-founding Duke’s impact investing fund, the loosely defined “impact” left me in search of an investing theme more concrete than this umbrella term, one that is at the tipping point of attracting investors in addition to philanthropists.

By 2020, I realized that climate investing could be the answer for three emerging vectors:

  1. Breakthroughs in underlying technologies since the 2010s CleanTech bubble have fundamentally broadened investment possibilities
  2. Because of (1), more entrepreneurs today are focused on applications and optimization, which offers more suitable investment opportunities for VCs that are more capital-lite and scalable than those that failed CleanTech funds in the 2010s
  3. Macro tailwinds from emerging policy support such as the Green New Deal and international competitions such as scaled renewables with the EU.

Leading organizations have taken the first steps to survey who the players are in the space via reports such as The State of Climate Tech 2020 by PwC. Knowing the names, however, is just the first step; insights remain scarce in the public domain regarding what these investors are like, how they behave, and why they invest in the climate.

It’s time to take our understanding of climate investing from knowing of to knowing about.

I started by aggregating the names of VCs from some of the most current sources: The State of Climate Tech 2020 by PwC, A running list of Climate Tech VCs by ClimateTech VC, and The Definitive List of Cleantech Investors by Freeing Energy. Among the 100+ VCs mentioned, I zoomed into the “climate-oriented” funds, which are defined as investors that have an established focus on or explicit mission to invest in climate. This scope is more directional than exhaustive — the key here is to laser-focus on investors that see sustainability as a return driver rather than a compliance checkbox. I then collected the “demographic” data about each fund, leveraging the latest Crunchbase data and scrapping of fund websites where necessary.

While I plan to publish a series based on the analysis, the first three charts I came up with already painted a fascinating picture of this thriving space…

My first chart for you maps out 76 major climate-oriented private investors active today by the year they were founded. The 2000s CleanTech Bubble is marked in green; other big times in the general market are shaded in grey.

Chart 1. Climate-oriented funds by founding year

It may seem straightforward at the first sight, but this chronicle-in-a-chart deeply challenges the general belief that climate investing is no more than a quick “boom and bust”.

Climate-oriented venture capital and private equity have been active long before — and after — the CleanTech era.

Roughly 1 in 4 of the funds surveyed in the first five years of the 2000s were founded in the first year of the millennium, years before CleanTech hit the headlines. While many investors did not survive the aftermath of the 2010s CleanTech Bubble, there were just as many new funds established right after 2010 that continue to be active today. In fact, the aftermath of the CleanTech Bubble gave rise to some of the most active players in today’s market, such as Better Ventures,, and ArcTern. This not only shows the continual investor confidence in the space, but also brewed many vintage funds and seasoned investors that enrich the space today.

Resources, talents, and know-how never stopped accumulating in climate investing, which paved the ground for the proliferation of climate-oriented VCs since 2016 — four years before the 2020 PwC report that brought this field back into the public view.

Suddenly, today’s hype about Climate Tech starts to seem less out of the blue and more written in stone.

Not all funds are created equal. Let’s take a step further to understand what types of funds were founded each year. This takes us to Chart 2, where I color-coded the investors by type and investment stage which tend to suggest how they may invest.

Chart 2. Climate-oriented funds by founding year and type

What is cool about this chart is that it — metaphorically speaking — adds chapter breaks to the chronicle of climate-oriented investors.

The evolution of climate-oriented VCs can thus be cut into three distinctive phases:

  1. Pre-2004: a few generalist VCs and CVCs dipped in all stages of climate investing in the exploratory era of the nascent field;
  2. 2005–2011: influx of early stage investors did not see as much enthusiasm from later-stage counterparts, suggesting a field yet to be ripe for the full investment cycle
  3. 2012 — present: early-stage investors continue to drive the number of new funds, but later-stage and corporate funds with more cash in hand are entering the market too, completing the investor ecosystem for climate startups reaching later investment stages

Note that I have not counted the subsidiaries of general funds such as the TPG Rise Fund or Blackstone Growth Equity, as it was challenging to separate the “chunk” dedicated to climate investing from their other practices. The involvement of large, late-stage funds in the present landscape is only going to be greater than this study suggests as these high-profile giants continue to move into the climate space.

Metaphorically speaking, we are beyond the preface and introduction in the book Climate Investing. We are in the main body now.

Let’s dive one level down into some of the most representative investors in each year, to understand who they are exactly, and what they can tell us about key trends in the evolution of the investor ecosystem.

Chart 3. Representative climate-oriented funds by founding year and type

The turn of the 21st century saw the first venture funds set up specifically for sustainability investing. Funds such as Nth Power (founded in 1997) and Rockport (1998) were born in this era, which continued on to catch waves (and to face challenges) in the CleanTech boom. These funds to climate investing are like the buttonwood tree to Wall Street; numerous investors who started here went onto leading new climate funds that we are familiar with today. For instance, Abe Yokell spent 13 years at Rockport before co-founding Congruent Venture.

At the height of the DotCom Bubble, tech-savvy capital had already set their eyes (and cash) on clean technologies, though they tended to be laser-focused on “hard science” opportunities as seen in the case of Lux Capital (2000). This era also saw the first CVCs (Corporate Venture Capital funds) by traditional energy giants such as Chevron Technology Ventures (1999) in the climate field, which planted the seed for corporate interest in the climate space.

The pre-CleanTech-Bubble 2000s is when nimble VCs with more specialized focuses in sustainability started to emerge. Compared to their late 90s peers, funds such as Braemar (2002), DBL (2004), Demeter (2005) and Sustain VC (2007) took a step further from scouting general sustainability opportunities to focusing on more specific niches. Many of these funds sustained the CleanTech boom and bust and continue to lead in today’s climate investing scene. CVC involvement also deepened: the founding of Total Carbon Neutrality Ventures in 2009 marks one of the first big energy CVCs that specifically focuses on climate, taking one step further than just “innovation”.

While the CleanTech Bubble quickly boomed and busted, the early 2010s left several meaningful developments in the space. Headed by funds such as Better Ventures (2010) and Collaborative Fund (2010), broader impact investing funds emerged, where climate is often one of the most prominent areas of investment. A new generation of post-CleanTech funds were also founded in this time, and have since grown to be the mainstay of today’s climate VC scene. Shifting away from solely investing in capital-intensive, “hard-science” enterprises, these funds widened their investment scopes to include consumer goods, software, and other industrial applications. Innovative thematic funds like (2013) also started during this time.

In the past five years, we witnessed the entry en masse of early stage VC into the climate investing space that shaped the space as we know today. These young VCs tend to have raised only one fund to date, and are very focused on one or a few sustainability niches beyond energy innovations. This is also the time that spin-off funds from rainmakers during the CleanTech Bubble such as G2VP (2018, from Kleiner Perkins) and funds led by CleanTech veterans like Congruent Venture (2017) were founded, which further suggests that those who have been through the previous boom and bust cycle are having heightened confidence in climate investing.

The latest trends we’ve seen to date is the rise of what I would call the “new generation” of climate CVCs. Raising larger amounts than their predecessors, these funds were born into the ballpark of VC mega funds with an outweighed impact on the market than the smaller, pure-play funds. More importantly, these funds are no longer limited in the energy space: 2020 alone saw Microsoft, Amazon, and Unilever opening their shops, a strong signal that players in sectors beyond renewable energy find climate investing relevant and necessary. With tighter integration with their existing business lines, these CVCs could grow into a vital part of the investing ecosystem by being later-stage partners for the early-stage pure-play VCs in this upcoming decade.

So what’s the key takeaways?

  1. Climate investing isn’t a bubble. Venture capital and private equity in climate have been active long before — and after — the CleanTech Bubble
  2. Climate investing is maturing. The field has grown from a hard-science niche, to an emerging ecosystem with investors of various stages and focuses today
  3. Climate investing is accelerating. Its best days are ahead as a growing variety of investors, in particular returning CleanTech veterans and dedicated CVCs, accelerate their entry into the space.

Hope you like this brief study of climate investing! In the upcoming studies, I will continue the journey with you into the trends in how climate funds raised money, grew in size and capabilities, and ultimately what they invest in. I’d love to hear from you — inbox me at or ping me on LinkedIn for a chat!