Prime Closes First ‘Climate Tech’ Fund Well Above Target

Prime Impact Fund, the early-stage venture capital fund that focuses on “breakthrough climate technologies,” reached a final close earlier this month at $50 million, well above its target, fund officials announced today.

The fund has made seed-stage investments in eight companies so far and officials say they see evidence of “pent-up demand” from institutional investors for climate-tech investments.

The fund is an initiative of the nonprofit Prime Coalition and features a lifetime of about 15 years. That long span sits well with the fund’s key investors of foundations and other patient, risk-tolerant “catalytic capital” investors, says Matthew Nordan, managing director of the fund. Investors include foundations like the John D. and Catherine T. MacArthur Foundation, the David and Lucile Packard Foundation and the Sierra Club Foundation, as well as family offices and corporates.

Related Content

“By drawing on catalytic capital from impact-focused investors, Prime Impact Fund partners with entrepreneurs at the earliest stages” of the journey from concept to scale, says fund principal Johanna Wolfson in the announcement of the close. “We work side-by-side with our portfolio company CEOs to hone strategy, grow strong teams, and build investor syndicates for the long haul.”

The Prime Impact Fund made its first investment in October 2018 and has made eight investments so far. Its portfolio companies are: Lilac Solutions, which develops lithium extraction technologies; Via Separations, which is working to replace heat with electricity in industrial separation processes; C-Motive Technologies, which created what it says is the world’s first commercially viable electrostatic motor; biotech startup MicroByre, which is working to domesticate bacteria; Verdox, a developer of technology to capture carbon from the air; Treau, which creates sustainable home heaters and air conditioners; Sublime Systems, which works to decarbonize cement production; and Clean Crop Technologies, whose processes extend perishable foods’ shelf life and reduces food waste.

When Prime started collecting money for the new fund, it set a target of $20 million with a $40 million cap. Since Prime wrapped the fund at a little over $50 million, “I’d say there is pent-up demand among impact investors for tech innovation in climate,” Nordan says. He notes that Prime has its own niche, with investors who tend to “have a mission-related interest in fighting climate change as well as a financial one.” Because of that, he adds, “I don’t think our fundraising experience is reflective of the market generally.”

Still, the cleantech sector has clearly bounced back since venture capital investments in the sector bottomed out in 2016, with numerous new funds now in the market, including Breakthrough Energy Ventures, Imperative Science Ventures and Congruent Ventures. “For sure the tide has come back in a little bit,” Nordan says.

He says the fund’s governance, structure, and incentives are all aligned with impact investing That is, if the fund’s portfolio companies are financially successful but dont have the expected impact on the climate, “then our investment team isn’t rewarded,” he says.

Looking ahead, Prime Impact Fund officials are “paying particular attention to ag tech, including synthetic biology and cell-free approaches to metabolic engineering,” Nordan

says. They’re also excited about concepts like replacing heat in industrial processes with electricity — something that existing portfolio company Via Separations is working on — and to decarbonizing mass transit, he adds.

He’s also hopeful to find impactful investments in steel or glass production, Nordan says.

Post Comment

Your email address will not be published. Required fields are marked *

Featured News Topics