Venture investing can be a cliquish business. Sure, there are plenty of generalist firms. But when you look at the most active investors in a single industry, specialist funds often lead.
This is certainly the case for sustainability investment. A handful of climate-focused investors dominate the ranks for deal count and investment size in recent quarters, per Crunchbase data.
Many of the busiest cleantech investors have also gotten more active in 2023. That’s significant, given that overall venture funding has fallen, indicating these industry-focused firms see both increased urgency and opportunity around their investment thesis.
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To start, we took a look at the most active cross-stage sustainability investors by deal count:
Lowercarbon had the most active quarter in its history in Q2 of this year, backing 15 newly reported rounds, according to Crunchbase data. Its largest co-led round for 2023 was a $70 million Series B for Loam Bio, an Australian startup using microbial technology to capture carbon in agricultural soils.
Three investors are tied for second place: Temasek, a Singapore-based cross-industry investor with a sustainability mantra; Fifth Wall, a real estate specialist with a focus on energy efficiency; and Khosla Ventures, one of the earliest Silicon Valley firms to carve out cleantech as a core focus area.
Most active high-spending lead investors
Turning to the most active and high-spending lead investors, the list of names is a little different.
Below, we rank the active sustainability investors who led or co-led the largest sum total of investments in the first half of the year:
TPG Rise Climate Fund, which closed on a $7.3 billion investment vehicle last year, has also been putting capital to work. This year it led a $250 million Series C for green hydrogen company Ohmium and a $150 million financing for clean energy marketplace Palmetto Clean Technology.
Looking at the lineup over 10 years
Taking a longer-term view, the list of most active investors also contains some different names.
Among cross-stage investors, Breakthrough Energy Ventures ranks as the most active venture backer for years 2013 to 2023, with 107 reported rounds. Temasek ranks a distant second with 64 reported financings.
Among seed-focused investors, meanwhile, it’s generalists rather than cleantech-focused funds that are most active in sustainability dealmaking. The top three in our ranking are the perennially active Techstars, SOSV and Y Combinator.
Looking ahead, it’ll be interesting to see if the current state of affairs persists in which cleantech-focused investors take the lead over generalist firms in larger financings.
There are quirks to the sustainability space that make it not the right fit for every firm. This includes the outsized impact of government policy, commonly high capital requirements, and the tendency to gauge returns by both environmental and financial metrics. For those who are dedicated to the space, however, it looks like their commitments are strong as ever.
Illustration: Dom Guzman
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