What's Happening?
A new fund named the All Aboard Coalition is being established to address the financing gap faced by climate tech startups, often referred to as the 'valley of death.' This gap exists between early-stage funding and the growth capital required for scaling proven technologies to commercial levels. The fund aims to raise $300 million by October to assist startups in securing rounds of $100 million to $200 million necessary for building first-of-a-kind projects. Led by Chris Anderson, former head of TED Talks, the fund will provide equity or convertible equity but will not offer loans or back specific projects. The coalition includes several venture capital firms such as Ara Partners, Breakthrough Energy Ventures, and Clean Energy Ventures, among others.
Why It's Important?
The establishment of the All Aboard Coalition is significant as it seeks to bridge a critical funding gap that climate tech startups face, particularly those focused on hardware solutions. By providing substantial financial support, the fund aims to enable these startups to develop and scale innovative technologies that address environmental challenges. This initiative could accelerate the commercialization of climate tech solutions, potentially leading to significant advancements in sustainable energy and environmental protection. The involvement of prominent venture capital firms suggests a strong endorsement of the sector's potential, which may attract further investment and interest from generalist investors.
What's Next?
The fund is expected to serve as a 'Sequoia-like' signal in the climate tech sector, encouraging other experienced funds to invest in companies supported by All Aboard. As the coalition works towards its fundraising goal, the success of this initiative will depend on attracting generalist investors who are willing to support the commercialization of climate technologies. The broader climate tech sector will need more than the $300 million targeted by the fund, highlighting the importance of continued investment and support from various stakeholders.
