About episode
We know we need to be investing trillions of dollars annually into the climate transition. Venture capital is just a small slice of the pie, but there’s simply no time to slow down its contribution to advancing climate solutions.
In 2023, however, climate tech venture funding dropped 30% to $32 billion. Whether this was a temporary slowdown caused by high interest rates and the macro environment, or the new normal, will make a big difference.
Recently, I’ve been thrilled to start hearing about funds that are closing new and significantly bigger rounds.
One such firm is Clean Energy Ventures. They just raised their second fund, which is three times the size of their first, and I was pleased to get to hear the details from Clean Energy Ventures’ Co-Founder and Managing Partner Temple Fennel. Temple’s been investing in climate tech since 2017 and has held fast to focusing on companies that can reduce emissions by multiple gigatons. In today’s conversation, we hear how Temple got started in climate tech investing and what he seeks in an investment. We hear about some of his portfolio companies, the changes he’s seeing in climate investing and much more. Lots to learn in this one – enjoy.
In today’s episode, we cover:
- [03:02] Temple’s path & how he decided to focus on climate investing
- [7:54] Clean Energy Ventures’ investment thesis & what makes them unique
- [11:38] Expectations, assumptions & surprises from the first fund
- [14:25] Rebound Technologies, their business potential & climate mitigation opportunity
- [17:40] Aqua Membranes & why Clean Energy Ventures invested
- [19:51] Other examples of what Clean Energy Ventures is interested in
- [23:03] The second fund & the focus this time around
- [25:52] The Simple Emission Reduction Calculator: Emissions reduction & the causality for financial return
- [27:33] The process of raising capital today
- [30:42] The current state of the capital market for climate
- [32:36] Change in SBTI rules around offsetting & talk on decarbonization mandates
- [34:49] What needs to happen to get company leadership onboard for making near-term commitments to technologies that will drive their decarbonization
- [36:11] How investors are acting differently & outlook
- [37:45] Other interesting investment areas with opportunity
Temple’s path & how he decided to focus on climate investing
Temple began his career as a systems engineer, creating internet technology businesses in the 90s, one of which was based on a patent he co-created. Funded by prominent venture capitalists, he later joined a successful media company in the 2000s, managing film financing and project finance. Marrying into an oil and gas family, Temple was asked to develop investment strategies around cleantech and agtech, leading him to explore these fields more deeply. Initially uneasy with the VC space, he focused on project finance, investing in wind and solar, and eventually pursued deeper technological understanding at MIT. He connected with the Clean Energy Venture Group, combining their technical expertise with capital from a syndicate of committed family investors to create Clean Energy Ventures in 2017.
Clean Energy Ventures’ investment thesis & what makes them unique
Clean Energy Ventures was founded by engineers and operators who have built scalable businesses. They focus on identifying brilliant entrepreneurs with disruptive technologies, but who lack experience in scaling commercially. They are dedicated to investing only in decarbonizing technologies that can potentially reduce at least 2.5 gigatons of greenhouse gases by 2050. This commitment is central to their investment criteria.
CEV takes a hands-on approach, often leading investments, conducting due diligence, serving on boards, and connecting founders with strategic investors and customers. They also emphasize leadership coaching, helping founders grow personally and professionally. Additionally, CEV works closely with strategic co-investors, who bring deals and help set milestones for acquisitions. Their disciplined investment strategy focuses on achieving substantial returns, with a clear understanding of exit valuations in the market.
The second fund & the focus this time around
Clean Energy Ventures’ core strategy remains focused on investing in scalable global technologies capable of reducing at least 2.5 gigatons of greenhouse gases. This decarbonization target is not just an impact metric, but also a determinant of financial returns, creating a direct causality between impact and profitability. While continuing to seek technologies within this framework, they are expanding geographically with new offices in London and plans to invest more in Europe, as well as in Tel Aviv. Additionally, they are broadening their investment scope to address the “missing middle” in clean energy funding, aiming to support companies that have de-risked technologies, customer traction, and revenue, but lack the capital to scale their operations to meet growing demand.
Resources Mentioned
- Clean Energy Ventures
- Rebound Technologies
- Aqua Membranes
- OXCCU
- Noon Energy
- Clean Energy Ventures’ Simple Emissions Reduction Calculator
- S2G Report: The Missing Middle: Capital Balances in the Energy Transition
Connect with Temple Fennell
- Connect with Temple on LinkedIn
Connect with Jason Rissman
Keep up with Invested In Climate
- Sign up for our Newsletter
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