Clean energy ventures raised $305 million

Climate-focused venture capital firm Clean Energy Ventures has successfully raised $305 million for its second fund, far exceeding its initial goal of $200 million. This oversubscribed fund highlights investors’ strong interest in innovative technologies aimed at reducing greenhouse gas emissions. The new fund, boosted by contributions from leading limited partners such as the Grantham Foundation, Builders Vision and Carbon Equity, highlights the growing demand for climate technology investment.

Clean Energy Ventures has already completed six investments from its second fund. These include Nitrofix, an Israeli green ammonia producer, and OXCCU, a British sustainable aviation fuel company. The company is also expanding its geographic reach with a new office in London, recognizing growing opportunities in Europe and Israel.

Since the launch of the first fund in 2019, the renewable energy landscape has evolved significantly. The initial enthusiasm around special purpose acquisition companies (SPACs) allowed many clean energy companies to enter public markets, although many have since underperformed. Still, investor confidence in the value of clean energy investments remains high. Clean Energy Ventures’ limited partners, which include institutional investors, asset managers, family offices and registered financial advisors, continue to prioritize returns alongside their commitment to sustainable investing.

The company, which closed its first fund five years ago, is already investing the newly acquired capital in new technologies beyond traditional renewable energy sources, such as solar and wind energy. Clean Energy Ventures focuses on sectors such as industrial decarbonization, advanced recycling technologies and grid improvement innovations such as virtual power plants.

Industrial decarbonization, particularly in the cement and steel industries, is a key goal. These sectors, which have seen minimal technological progress over the decades, offer significant opportunities to reduce emissions. Additionally, the fund is exploring efficient recycling methods and the development of cost-competitive bioplastics to address the environmental impact of plastic waste.

Network improvement technologies are another critical area of ​​investment. Virtual power plants that optimize the distribution and use of energy represent a significant step towards a more resilient and efficient energy grid. This focus is consistent with broader efforts to improve energy infrastructure and support the transition to renewable energy sources.

Although none of the companies in the first Clean Energy Ventures fund went public, the company’s strategy was to focus on strategic sales rather than immediate IPOs. This approach aims to reach larger companies interested in acquiring innovative technologies. Although no acquisitions have taken place so far, interest from potential buyers remains.

Private equity is playing an increasingly important role in financing the energy transition. In 2023, the value of private equity-backed energy transition deals grew to nearly $30 billion, a significant increase from just $500 million in 2018. Clean Energy Ventures partners with private equity funds to support the growth of its portfolio companies, helping them to bridge the gap between venture capital and public market readiness. This partnership model enables early-stage companies to successfully scale and attract further investment for subsequent projects.