An Update on Our Fund IV Investment Themes
Better Ventures backs the most important companies of tomorrow that are building a sustainable, healthy, and equitable society. As we embark on Fund IV, we wanted to take a moment to provide an update on the investment themes we’re currently focused on and where we see attractive opportunities to partner with mission-driven founders. This is the first in a series of posts on our investment themes, which will be followed by deeper dives into each of the three categories below.
Emerging technologies and breakthrough science, from AI & ML and computer vision to low-cost DNA sequencing and CRISPR gene editing, are enabling fundamental innovations across industries with the potential to solve intractable problems in climate, health, and inequality. We partner with mission-driven founders with strong technical skill sets and deep personal commitments to solving big problems, which we view as a source of financial outperformance. We form conviction at the earliest stages of venture and write checks of $500K to $1.5M at the pre-seed and seed stages, with reserves for follow-on.
Electrification of Everything
Rick leads our electrification efforts, which includes electrification of transportation, decarbonization of buildings and industry, and software for grid resilience needed to support electrification. Several converging trends make this theme timely. Society is at a tipping point on prioritizing climate change, we’re seeing a wave of government funding and mandates to hasten the change, and the need for energy security has been laid bare by geopolitics.
After decades of progress, the moment we’ve been waiting for in energy is finally here — solar and wind power now cost less than natural gas. Combined with inexpensive energy storage, the building blocks are lining up to completely replace our entire global energy system — a $13T opportunity. But we’ll need to deploy these assets rapidly on a massive scale! Electrification software in particular has the potential to power this shift, as we deploy these assets
We’re eagerly looking to add to our existing companies with new investments in fleet electrification and related software services and built environment innovations like heat pump software.
Portfolio Companies in the Theme: Synop, Ride Report, Hilos, SunFunder (acquired), UtilityAPI
Transforming the Food Industry
Wes heads up our firm’s work in Food Tech and noted how we’re in the midst of a major transition in how we grow, produce, distribute, and consume food that has the potential to significantly reduce the carbon footprint of the food & ag industry, which is responsible for 25% of global greenhouse gas emissions. If done right, these innovations will not only reduce carbon emissions, but they’ll also enable climate-resilient crops, enhanced nutrition, and broader access to healthy food to all consumers.
In addition, we’ve seen a huge shift in the industry as a result of Covid-19 and geopolitics: from supply chain and pricing challenges to The Great Resignation and rapid digital adoption, food & ag is undergoing a major transformation. These trends, along with increasing consumer demand for carbon-zero, healthy food, are creating tailwinds for investment opportunities across the food & ag value chain.
We’re currently active in four sub-themes within food & ag below. Several of our existing portfolio companies are mentioned, and we’re looking to add more in each of these categories as we get to work on Fund IV.
Portfolio Companies in the Theme: Mission Barns, Meati, Pow Bio, Debut, Pluton, Avalo
Revitalizing a Skills-Based Economy
Lyndsey has been following developments in the skills-based economy where there have been unprecedented tectonic shifts in the US workforce over the last few years (and covered previously in our blog outlining our thesis in work: “An Adaptive and Resilient Workforce”).
Industries that are the foundation of our economy and society, such as healthcare, education, manufacturing, and skilled trades, all are facing a significant shortage of workers. An aging workforce and dwindling interest from younger generations means that gap will continue to widen. The cost of labor is also further accelerating a push towards automation, or augmentation, and the scope of work, and the required skills, are changing. Net net this will create more opportunity, and recent legislation such as the Inflation Reduction Act is providing tailwinds for millions of new jobs across sectors. But to bridge the gap we need new solutions that provide paths for people to transition, training to upskill or reskill, and onramps with employers.
To build a more adaptable workforce for the future, we need a truly skills-based economy. We are focused on solutions that include building the skills data layer to power the labor market to platforms that enable independent work and alternative paths to income. We have made a few investments in these categories (below) and are excited to do much more in Fund IV.
Portfolio Companies in the Theme: AdeptID, Cyper Pop Up, West Tenth
