Venture Capital: VCs, Wake Up And Smell The ClimateTech Coffee

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Andrew Chung, of 1955 Capital, says climate change is the perfect storm.

A huge market is shaping up around ClimateTech, a category of solutions that enable governments, companies, and individuals to combat climate change. There is a sudden shift in investors’ preference for sustainable and climate-friendly companies and products. The once uncared for and given-up-for-dead moniker, “CleanTech,” could become a $4.3 trillion market by 2030 in its new avatar as “ClimateTech.”

“Cleantech lagged because consumers and enterprises didn’t take climate change seriously enough for it to impact their spending,” says veteran venture capitalist Andrew Chung, who runs 1955 Capital. “Now that it is seen as an existential threat to the planet, there is more urgency about solving it by consumers, corporations, governments, and investors. It’s a perfect storm.”

ClimateTech – follow the money

ClimateTech solutions embrace cleaner fuel, eco-friendly agriculture, sustainable food products, and CO2 removal. These are just a few examples, but entrepreneurs are already jumping aboard this new bandwagon. Where entrepreneurs go, the money, and VCs, must eventually follow.

So ClimateTech is one more “-Tech,” alongside FinTech, AdTech, AgTech, and FoodTech. And there are a host of entities driving innovation in ClimateTech – both established companies and new startups.

Unsurprisingly, ClimateTech investing is the new kid on the portfolio block.

1955 Capital has a headstart

Andrew Chung and 1955 Capital have a headstart on ClimateTech investing. Besides, Chung’s background and experience straddle both advanced and developing economies.

Chung has had stints at Bain Capital, Lightspeed Ventures, and Khosla Ventures. With 1955 Capital, Chung is sitting on a war chest of capital commitments worth $200 million.

Chung has already swung deals that migrate advanced technologies from developed countries to manufacturers in China. China’s new-found stance against the ill effects of climate change could usher in a huge opportunity for ClimateTech investing. “When a company is told it won’t be able to grow unless it reduces its carbon footprint, a solution becomes a matter of survival,” Chung observes.

1955 has led early investments in nine companies so far, including sustainability companies like Sustainable Bioproducts, Gridtential, and Crop Enhancement.  View their portfolio here.

Related Story:  ESG: Institutional Investors Press Hedge Funds on ESG Investing

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