Dealflow | May 29, 2024

Clean Energy Ventures raises $305 million for second decarbonization fund

Amy Cortese
ImpactAlpha Editor

Amy Cortese

The oversubscribed round for Clean Energy Venture’s second climate tech fund was a third higher than its initial $200 million target. Investors in the new fund include Builders Vision, The Grantham Foundation, New Summit Investments and Carbon Equity.

“We were very fortunate that a lot of our existing investors reupped significantly in this,” Clean Energy Ventures’ Temple Fennell told ImpactAlpha.

With the new fund, the early-stage climate tech investor is “doubling down on our thesis to invest in novel hardware-oriented climate-saving technologies with the potential to bring outsized emissions reductions and top-tier financial returns,” added Temple. On the firm’s radar: industrial decarbonization, plastics alternatives, and new electro-chemical processes for producing low-carbon fuel and other products. 

With a new office in London, CEV is also pushing deeper into Europe, where it sees plentiful climate tech opportunities.

Hands on

Boston-based CEV has invested in innovative startups including carbon fiber maker Boston Materials, carbon-oxygen long duration battery storage company Noon Energy, and zero-carbon ammonia producer NitroFix.

Each investment must be capable of mitigating at least 2.5 gigatons of aggregate greenhouse gas emissions by 2050. The direct causal relationship between the financial and impact metric appealed to investors, said Fennell.

“The more that your technologies are scaling, the more financial returns they’re generating and the more impact they’re having.” 

Track record

In addition to capital, the CEV team lends its significant scientific and operational experience to provide leadership coaching, introductions to customers and strategic investors and other assistance to help portfolio companies scale their solutions. 

Another differentiator is CEV’s 15-year track record of climate tech investing. Compared to many climate tech newcomers, “we’ve been through two or three cycles already,” said Temple.

CEV’s “pre-fund” portfolio, which pre-dated its first fund, has clocked a 35% IRR to date and has returned almost 2x of the investment capital back, he added.