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ImpactAlpha LP/GP: Galvanize’s Tom Steyer on the climate tech buying opportunity

ImpactAlpha · April 29, 2025

Greetings, Agents of Impact!

Welcome to this week’s ImpactAlpha LP/GP, where we take you inside the real business of impact investing and the dynamic relationships between owners, managers and intermediaries of impact capital.

☎️ Tomorrow’s Call: Investable plays for shared prosperity. The goal: Share the wealth. ImpactAlpha is assembling a “playbook for shared prosperity,” a roster of what’s working in making less wealthy people more wealthy. Join Damien Dwin of Lafayette Square, Keepingly’s Daniel Smith, Capitalize Good’s Andrea Levere, and InnSure’s Charlie Sidoti on tomorrow’s Agents of Impact Call to explore strategies for shared prosperity, in conversation with ImpactAlpha’s David Bank and Napoleon Wallace, tomorrow, April 30, at 10am PT / 1pm ET / 6pm London. RSVP today.

In this week’s newsletter:

Galvanize’s Tom Steyer on climate investing in volatile times
Growth equity for African fintech
McKnight Foundation ups impact allocation
The case for impact hushing

Featured: Climate Finance

Galvanize’s Tom Steyer on why now is a good time for climate investors with cash (Q&A). Climate champions have bemoaned the dismantling of US leadership on climate action. But at least one committed climate investor smells a buying opportunity. “If there’s a big supplier of capital who has decided, ‘I’m out,’ that’s a good thing,” says Tom Steyer, co-executive chair of Galvanize Climate Solutions, which is taking equity stakes in early- and growth-stage companies and also investing in real estate and private-credit across the low-carbon transition. “If you’re sitting there with cash, it’s an unequivocally good thing, because prices are going to be lower, there’s going to be less competition, and you’re going to get better returns,” Steyer told ImpactAlpha in a wide-ranging discussion at Galvanize’s San Francisco office. Some highlights:

Raising climate capital. In 2023, Galvanize raised more than $1 billion for its inaugural Innovation+Expansion Fund. Galvanize has been tight-lipped about its roster of LPs. “It’s not true that no one in the US is interested,” Steyer says, though Europe has been much more interested. Steyer is also looking at countries on the Arabian Peninsula and Singapore. Middle Eastern oil producers “want to have transitioned and have thought ahead and been smart about it,” he says. “And Singapore is always smart.” Is Singapore to Saudi the new green finance pipeline? “Those are people who have big sovereign wealth funds,” he says.

Decarbonizing real estate. Steyer made his fortune as the founder of the $20 billion asset manager Farallon Capital and founded Galvanize with Katie Hall in 2021, after briefly running for president in 2020 (former Secretary of State John Kerry joined up last year). The planned $500 million Galvanize Real Estate Fund has bought a number of properties with the aim of increasing their value by lowering their carbon footprints. Investors in other real estate funds have been itching to get their money back since interest rates spiked in 2022. “So those are people who kind of have to sell,” Steyer says. “You can look at that and go, ‘Okay, good supply-demand situation for a long period of time,’ if you’re sitting there with cash.”
Carbon capture. “A ton is a ton,” Steyer says. “You sequester it, you reduce it. What’s the difference?” At Elemental Impact’s event at Climate Week, Steyer interviewed Aadith Moorthy of Boomitra, which last week issued its first “soil organic carbon” removal credits, sourced from smallholder farmers in India, for a price in the high teens per ton of carbon (see, “Climate tech is counting on falling costs, rising demand to ride out the political storm”). “You do $25 a ton, times 40 gigatons, and you can solve this whole problem for $1 trillion, or $1.5 trillion a year,” he says. “Really? That’s cheap.” He said nature-based solutions like Boomitra (and X Prize winner Mati Carbon) deliver co-benefits in the form of better agricultural yields and the transfer of wealth to the Global South. “I think we’ve seen that in most of the giant, global mechanical systems, the co-benefits are negative,” says Steyer.
Cheaper, faster, better. Last year, Steyer published “Cheaper, faster, better: How we’ll win the climate war.” His message: “Stop talking about all this stuff that no one cares about, and start talking about the stuff that people do care about, which is products that are disruptively good for customers and why that’s in their interest.” We – the people of the world – are winning the EV race, winning the solar race, winning the battery race, with dramatically falling costs and increasing capacity, he says. Steyer’s pitch to consumers, and voters: “You are going to be able to have cheaper electricity. You are going to have a much cheaper automobile, that is much cheaper to buy, much cheaper to maintain, and much cheaper to fuel up. It is going to make your life better.”

Keep reading, “Galvanize’s Tom Steyer on why now is a good time for climate investors with cash (Q&A),” by David Bank on ImpactAlpha.

Dealflow: Financial Inclusion

Development Partners International acquires Egyptian fintech fund manager. Development Partners International has for nearly two decades offered growth equity to African businesses focused on financial inclusion, healthcare services and supply chain efficiency. The London and Cairo-based investment firm is finding appetite from commercial investors to invest down market, in early stage and tech-focused businesses. DPI has acquired Egypt-based fintech fund manager Nclude to anchor its new venture capital group, DPI Venture Capital. Through the deal, DPI adds Mastercard, Egypt’s e-Finance Investment Group, and the UK’s EBC Financial Group to its roster of limited partners. “We’re very proud that the LP base is highly commercial, because that shows that financial inclusion and financial access at the VC level is top of mind by these commercial players,” Ashley Lewis, who leads the new investment unit, told ImpactAlpha (see, “Africa’s biggest bank turns to fintech to extend lending to informal businesses”).

Fintech strategy. DPI Venture Capital will make seed to Series C investments in tech companies enabling access to financial services for small businesses and underserved consumers. The team will mostly focus on Nclude’s home market of Egypt and allocate 30% of its capital to other parts of Africa and the Middle East. Its fintech VC strategy has been in the works since DPI closed its third private equity fund at $900 million in 2021. At the time, African fintech was booming along with the rest of the global venture capital sector. Investment in the sector tanked last year, but demand for better, cheaper and more accessible financial services still creates opportunities (see, “How responsible fintech in Africa provides resilience in a downturn”). “There is still room for innovation, and there’s still room to back companies that are creating a difference,” Lewis said. DPI invested via its third private equity fund in MNT-Halan’s $157 million growth round, one of North Africa’s biggest fintech deals last year.

Strategic investors. Nclude was launched in 2022 as a strategic investment initiative of three Egyptian banks: Banque Misr, National Bank of Egypt and Banque du Caire. Commercial interest in the fintech sector picked up in Egypt that year after the central bank adopted a national financial inclusion strategy. The central bank recently mandated that commercial banks designate 25% of their portfolios to micro, small and medium-sized enterprises for at least one year. As part of DPI, the fund opens up opportunities for strategic investment and collaboration with a broader set of financial services companies, Lewis said. “A few years back, as an ecosystem, it was more development finance institution-heavy. We’re starting to see a much more diverse range of LPs.”
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LPs on impact. Andrew Siwo, head of sustainable investments and climate solutions at the New York State Common Retirement Fund, spoke with the team at Robert F. Kennedy Human Rights to discuss the pension fund’s sustainable investments. New York Common last year doubled its sustainable investment target to $40 billion from $20 billion. “Table stakes across sustainable investments have perpetually risen, partly because investors are more sophisticated and also expect to be compensated appropriately for the risks taken,” Siwo said. Read more.

Dealflow overflow. Investment news crossing our desks:

The McKnight Foundation has aligned half of its $3 billion endowment with its mission and doubled its program-related investment budget to $100 million. Said McKnight’s Tonya Allan, “We recognize now is an important moment for philanthropy to stand up and stand together and do more to address the serious threats facing our sector, society and democracy.” ICYMI: “Philanthropy has the right and responsibility to counter attacks on DEI (Q&A).” (McKnight Foundation)
TPG NEXT announced a partnership with and anchor funding for Ardabelle Capital, a Paris-based fund targeting sustainable solutions for corporate supply chains (see, “Lackluster fundraise for TPG NEXT sends mixed signals to emerging and diverse managers”). (TPG)
French impact investment firm Investisseurs & Partenaires exited its investment in South Africa’s Enko Education, which is working to expand quality education access for K-12 students in Africa. (Envestreet Financial)
Catalyze, a Houston-based developer and independent power producer of distributed renewable energy assets, acquired a 48-megawatt community solar portfolio in upstate New York. (Catalyze)

Impact Voices: ESG in VC

Hidden champions: The case for selective green hushing. Not long ago, investors were being scrutinized for greenwashing, or overstating their climate commitments. Now, facing political headwinds in the US, leading European asset owners are embracing a strategy of “selective green-hushing” – limiting their disclosures to receptive stakeholders while continuing environmental, social and governance practices, as well as diversity, equity and inclusion strategies, explains Johannes Lenhard in VentureESG’s latest column for ImpactAlpha. At the PEI Forum last month in New York, one senior LP made it clear: “We will continue to ask for responsible investing reporting and do our responsible investment due diligence with all our GPs. That will not stop.” But instead of publicizing these efforts broadly, it advises fund managers to offer updates only to those who want them. This approach, says Lenhard, is less about capitulating to political pressure and more about “doing responsible investing without the spin.”

Rational hedge. With ESG, DEI and sustainability caught up in the US culture war, legal risks for investors have increased, making selective hushing a rational hedge, says Lenhard. The focus, he argues, must return to materiality. “Politics doesn’t change these risks – it can only pose another set of material risks.” Climate change, energy demands for AI and electrification, as well as geopolitical instability remain central to long-term investment performance. While LPs may no longer choose to loudly tout ESG or sustainability, says Lenhard, the risk factors remain essential for decision making. Citing recent research from VentureESG, he explains that “many of the big check writers are doubling down when it comes to responsible investing – but in the US, many of them will be ‘hidden champions.’”
Keep reading, “Hidden champions: The case for selective green hushing” by VentureESG’s Johannes Lenhard on ImpactAlpha.

Agents of Impact: Follow the Talent

Mark Carney yesterday won a full term as Canada’s prime minister as Canada’s Liberal party won the nation’s federal elections. ICYMI: “Canada puts a green banker in charge of its response to Trump”… The Vistria Group adds Ruby Shi, formerly with Brookfield, and James Wreschner, formerly with Jonathan Rose Companies, as real estate associates. It also added Jim DeGrado, previously with Diversified Financial Management Corp., as fund accounting manager… Matthew Epperson, a former executive director of the Georgia Cooperative Development Center, joins the Georgia Center for Employee Ownership as a local outreach coordinator.

Devon Wolfe, previously with Rothschild & Co., joins Social Finance as an impact investment associate in its New York office… L&L Management seeks an investment operations specialist in Charlotte… Leon Levine Foundation is looking for a research and evaluation analyst… Massachusetts Housing Investment Corp. has an opening for an investment officer in Boston… CREO Syndicate is looking for a global head of strategic initiatives in New York… Prime Coalition is on the hunt for a people and culture senior manager.

British International Investment seeks a climate change manager in London… Boston Impact Initiative secures its certification as a community development financial institution… New Ventures seeks a project manager to lead an entrepreneurship acceleration program in Peru… British International Investment’s Nicola Mustetea, Sadiaa Haque of BRAC International, and Azeta Osagie of Agro Cropsafe Agro Services will join 60 Decibel’s Ellie Turner for a virtual discussion on climate resilience, Wednesday, May 7.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– April 29, 2025

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