ImpactAlpha, December 7 — The San Francisco-based fund received bids of more than a half-billion dollars from endowments, sovereign wealth funds, foundations and pension plans, including California State Teachers’ Retirement System.
“While we regret having to turn away over $300 million of investor interest in Fund III, we believe a disciplined approach to fund size will allow Fund III to continue to support climate entrepreneurs from the formation stage,” said Congruent’s Joshua Posamentier.
Institutional investors, “cannot find managers or funds, which can logically absorb the amount of capital they want to put out into the ecosystem,” Congruent’s Abe Yokell told ImpactAlpha. “We’re kind of coming out of emerging manager jail and that is what is allowing us to convert all these LPs who we’ve been speaking with for years.”
Deal flow strategy
Congruent’s third fund will lead pre-seed, seed and Series A investments in companies with solutions for the energy transition, food and agriculture, waste management and sustainable production and consumption. “We still have another couple investments out of Fund II before we actually start investing out of Fund III,” said Yokell. “The plan is to do eight to 10 new deals per year.”
The fund brings Congruent’s total assets under management to over $1 billion. This year, Congruent closed a $300 million “continuity fund” to write larger follow-on checks (see, “Deal spotlight: The new, uncomfortable reality for climate tech VC”).
Congruent’s two initial funds have invested in 53 climate and sustainability companies, including modular fusion reactor developer Avalanche Energy, zero-carbon aviation fuel producer Lydian and wildfire detection provider Pano AI.