Voyager Ventures last week announced a $100 million fund focused on early-stage climate technology companies. The scale alone is impressive for an inaugural fund, and its support includes many big names in technology and investing.
In the rapidly saturating field of climate investment, what is also notable for the San Francisco-based fund is the expert knowledge that managing partners Sierra Peterson and Sarah Sklarsk bring from founding and financing climate technology companies into the climate policy space. (More on that in a moment.)
The fund is supported by a range of investors and partners across companies, climate technology and the environment. This includes the former or current CEOs of General Electric, Lyft and Shopify, as well as Chris Saka of Lowercarbon Capital. The Nature Conservancy also joined in as an investor and partner, leading to its scientific rigor in the fund.
The portfolio so far includes five companies across the US and Europe. This includes San Francisco-based mobility company gigElev, which is converting electric vehicles into mobile power stations. gigElev is led by former CEO and co-founder of the acquired battery company WattLearn, Matineh Eybpoosh.
The portfolio also includes Remora, which works to reduce logistics emissions from long-distance trucking and recently partnered with Shopify’s Sustainability Fund to support its decarbonization commitments. Other announced investments for Voyager Ventures are Ento Labs (which brings artificial intelligence to energy efficiency), a carbon-negative nickel production company and a new protein company. The names of the last two companies were not disclosed.
Leadership in climate knowledge
It may seem like a new climate fund is announced weekly. The injection of billions of dollars into climate technology means that many funds are successfully launched and raised without specific expertise. Unfortunately, VCs are following in the footsteps of the overall venture capital world, where women represent only 15 percent of corporate general partners.
I spoke with Peterson and Sclarsic to learn about their expertise on the subject, what is different in their approach and where they are heading next.
What is the process for selecting their own climate technology investment strategy?
Given Peterson and Sklarsk’s 28 years of industry experience in climate technology, from advanced academic work at MIT and Harvard to direct investment in climate technology companies, they tell me they believe they can move convincingly in the early stages and back-end founders building. The next group of billion dollar companies in the field of decarbonization.
Peterson has been part of investing in more than 25 climate technology companies, and has founded or advised Sclarsic for a number of other climate technology companies, such as Modern Meadow (leather and farmed meat) and XL Fleet (fleet electrification). Sklarsic was also the founder of car-sharing company Getaround.
Their interest in early-stage companies comes from the leverage they see not only at the commercial level, but also from the potential climate impact of accelerating those companies. Peterson and Sklarsk said they believe that accelerating this work by two years could have significant effects on reducing carbon stocks in the atmosphere.
While many venture capitalists focus on software, Sclarsic acknowledges that “software solutions alone will not be sufficient to meet the decarbonization needs of the entire economy.” Voyager Ventures focuses on deep technology and digital solutions with the goal of sequestering and avoiding 500 million metric tons of carbon dioxide equivalent.
Climate technology is not a sector of its own. Climate technology is really a term to describe the need to decarbonize every sector of the economy, and across all economic activities.
The fund’s focus is on companies that can be the basis for systematic decarbonization across mobility, energy, materials, food, the built environment, analytics, industrial systems and decarbonization, according to Peterson and Sklarsk.
With climate technology innovation and investment moving so quickly, is there anything they see deviating from the path? Where do they see their role in correcting the course?
Drawing on Peterson’s background in helping create the EU’s carbon emissions trading scheme, the Voyager Ventures team is considering how much attention is being directed toward low-cost carbon offsets and carbon market design.
They said they don’t see many of the low-cost compensation creating a climate impact being marketed as occurring. As Peterson notes, they see “the need to address this quickly and well…in order to create a carbon market on a global scale with the effects that market participants are looking for.”
Peterson has personally invested in Sylvera, the satellite-based carbon offset accountability firm, and Lidar. Sylvera recently closed a $32 million Series A round and was highlighted in this article on Consumer Reports on Carbon Offsets.
This investment and other factors inspired Peterson and Sklarsk’s version of the double bottom line, which they said guides their investment. One part is the potential for carbon reduction, and the other part is the multiple climate and environmental impacts that can be co-created, such as crop productivity and resilience. Peterson and Sklarsk said they are encouraged that their partners and network are also seeking multiple climate and environmental impacts.
How do they think about climate justice?
Just as they consider the overall life-cycle emissions profile of potential investments, Peterson and Sklarske said social impact and benefits are important parts of their investment decisions, although they did not share details of how to do this.
As former founders and startup advisors, they see their operating experience as a lens for their approach to social impact. They bring their knowledge of how climate companies — Peterson has previous experience with Energy Access and Retrofit — into their investment decisions.
What else are they thinking?
Peterson and Sklarsk said their upcoming work with the fund includes an effort to deepen their investment relationships and work with startups in Europe. The broader climate technology community is beginning to recognize investment opportunities in Europe, and they are looking to build a Voyager presence there. Europe is geographically the second largest for investment in climate technology after the United States, and has experienced rapid growth, particularly in terms of mobility investments.
“Climate technology is not a niche sector of its own,” said Sclarsic. “Climate technology is really a term to describe the need to decarbonize every sector of the economy, and across all economic activities.”
Looking at the broader industry, Sclarsic noted that the need to decarbonize the entire economy “is becoming increasingly evident, even as companies look to protect their supply chains from fluctuations and things like the weather. The urgency, morally, but also the obvious is a necessity.” Action is to address the reality we all face [with climate change]. The companies that realize this early on, get ahead of that and plan how we can have better, more resilient, carbon-neutral and sustainable businesses, will be the companies that win in their industries. “