Underscoring the climate tech funding frenzy, well-known accelerator Elemental Excelerator — which has evaluated more than 5,000 startups and ventures developing technologies to address climate change — is spinning out a $60 million early-stage fund.
The eyebrow-raising list of individuals and companies supporting the fund, Earthshot Ventures, includes Emerson Collective, McKinley Alaska, Microsoft and the Employees’ Retirement System of Hawaii; John Doerr, chairman of Kleiner Perkins; Tom Steyer, founder of NextGen America; and Chris Cox, chief product officer of Facebook.
The new organization seeks to build on the connections and knowledge Elemental Excelerator has amassed since it was founded in 2012 — and on its mission to support underrepresented founders, particularly women and people of color.
"Earthshot raises the bar for equitable climate tech investment," said Lauren Powell Jobs, president of Emerson Collective and chair of Elemental Excelerator, in a statement. "Our deeply aligned group of investors is seeking the most audacious entrepreneurs to rapidly address the climate crisis."
During the past decade, the accelerator has supported at least 117 startups and awarded $43 million in early funding, according to its website. It estimates those investments have sparked $1.5 billion in follow-on funding. At least 20 Elemental Excelerator portfolio startups have celebrated exits by being acquired or entering public equity markets, according to the press release about the new fund.
One example is Simple Energy, a utility analytics software startup that sold most of its shares to power distribution company AES in 2018 and then subsequently merged with another company, Tendril, to create Uplight. The combined company serves 75 of the world’s top electric and gas utilities. Another is Xos Trucks, an electric van and truck company that scored a high-profile order with FedEx in August. The startup went public last month as part of a merger with a special purpose acquisition corporation.
Larger entities really see climate as the next big investment opportunity.
Earthshot Ventures will be led by three existing members of the Elemental Excelerator team: CEO and founder Dawn Lippert; Mike Jackson, who has been the accelerator’s investor in residence and will act as managing partner; and Ramsay Siegal, who previously managed the organization’s portfolio.
When I spoke with Lippert and Jackson about the launch, they told me Earthshot Ventures has already closed on its "first couple" of investments but declined to name the startups. The opportunity to support early-stage companies is unprecedented, according to Lippert. "Larger entities really see climate as the next big investment opportunity," she said. As of June 30, there had been approximately 250 climate tech deals in 2021, representing about $16 billion in total funding. Billions of dollars wait in the wings.
The fund will focus on a broad range of climate tech, closely aligned with its parent organization’s mission. Those include energy (breakthrough clean energy options and new financing options); mobility (ranging from new vehicles to logistics and supply chain efficiency plays); food and agriculture (including alternative protein and food waste reduction approaches); and carbon and industry (such as plastics alternatives or carbon drawdown methods).
Jackson said Earthshot’s connections with Elemental Excelerator and its portfolio could help entrepreneurs scale their ideas or technologies more quickly. Conversely, the applications for the accelerator could serve as a potential deal pipeline for the new venture capital fund. "It’s a great way for us to get intelligence on the companies that are out there," Jackson said.
Earthshot will operate out of Honolulu and East Palo Alto, California. The fund will also be allied with Launch Alaska, an accelerator that often works with Elemental Excelerator. Lippert sees these regional relationships as a real competitive advantage in being "able to understand climate issues in a real-world context." And it also underscores Earthshot’s interest in connecting with underrepresented communities. "Talent is everywhere and increasingly anywhere," Lippert said.
