$800m fund for Climate Tech Startups

(Bloomberg) -- Venture capitalist Chris Sacca is launching four climate tech funds worth about $800 million in total through his new firm Lowercarbon Capital LLC

Sacca says “Let’s fund the unfundable, What’s the stuff where the business case isn’t there yet, but with relatively small dollars there might be a super high leverage opportunity?”

 VC money flowing into climate tech startups has grown 40-fold between 2013 and 2019, from $400 million to $16 billion, according to a 2020 PwC report.

So who is Chris Sacca

Sacca made his name and lots of money with early bets on companies such as Twitter, Instagram, Uber, Stripe and Kickstarter. But in a surprise move in 2017, at the age of 42, Sacca walked away from traditional venture investing.

Sacca thinks climate tech is at a tipping point, especially because of the pace at which talented people are entering the space. 

“Covid created this reflective moment and so did being drowned in fire smoke,” he says. “A lot of these folks are hearing from their kids: ‘Hey, what are you doing to save our future ?’”

The Saccas funds will be joined by more than 250 other limited partners. The smallest capital commitment is $15,000 and the largest they declined was for $150 million. The Limited Partners ( LPs ) include not just rich individuals, but also foundations, non-profits, universities and pension funds.

The Climate VC Model

“When you’re building a new social network, you spend a couple of years coding it all towards launch day. Then you put it out and no one cares,” he says. With climate tech companies, “we seed the science and we get to prototype. Then we find that first customer willing to pay for it, because what we’ve made is cheaper, better, faster, easier to use, more delicious or requires less maintenance. And we see that first incremental revenue faster.”

The Goal

Like other climate-tech VCs, Sacca wants his startups to reduce or remove emissions ideally at the scale of billions of tons each year. Many of Lowercarbon’s 50 investments to date—not all of which are public yet—have been for startups that remove carbon dioxide from the air using a variety of technologies.