Dec 14, 2023 - Business

Silicon Valley vets raise $65M for Climactic's inaugural venture fund

Illustration of an electric vehicle plugged in to a charging station.

Illustration: Gabriella Turrisi/Axios

Climactic, a seed venture firm founded by Freestyle Capital's Josh Felser and ex-Lyft executive, Raj Kapoor, has raised $65 million for its first fund.

Why it matters: A growing number of investors have jumped into climate tech investing in recent years as the urgency of climate change has become increasingly mainstream.

The big picture: Climactic's sales pitch to entrepreneurs is that the firm's partners are former startup founders, and are focused on software above all else, says Felser.

  • "We are definitely positioning ourselves as the bridge between general tech because that's the world we came from," he adds. "A lot of VCs in general tech look to us as a safe recommendation engine."
  • Environmentalist Paul Hawken and media personality Van Jones are advisers to Climactic.

Details: Felser and Kapoor started investing in the category from their own money in 2020. The new firm counts Silicon Valley names Reid Hoffman, Chris Sacca, and Ev Williams as limited partners, as well as institutional investors Stepstone, MIO Partners, NfX, and Mayfield.

  • They already have 13 portfolio companies, including nine investments they made as angels.
  • Asked if they'd take capital from oil companies, Felser tells Axios that's an ongoing discussion. While he's more skeptical of the oil industry's seeming embrace of alternative fuels, he adds Kapoor is more optimistic they can be part of the solution.

1 fun story: Felser's decision to quit his old VC firm stems from a run-in with the then-future California governor, Gavin Newsom, at the gym.

  • He befriended Newsom — who needed some guidance with his exercising form — and later introducing him to BlueDot, a Canadian predictor of disease outbreaks.
  • "It definitely gave me religion around the private sector being the solution for climate change," says Felser, adding he previously believed it was the domain of nonprofits and government.

The bottom line: "Looking at another software company at Freestyle [Capital] just wasn't doing it for me anymore," Felser tells Axios.

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