Illustration: Rae Cook/Axios
A coming macroeconomic "winter" will hurt investor activity in emerging climate technology areas, Bill Gates told TechCrunch Sessions in Berkeley on Tuesday.
Why it matters: The impending storm that Gates predicts will stall the momentum currently running through the industry or halt its progress altogether.
Context: Gates founded Breakthrough Energy, a climate change-focused organization that includes a fellowship program, startup incubator and venture arm.
- It has $2 billion AUM and invests with a 20-year return target as opposed to a typical VC life cycle of five to 10 years.
Driving the news: Gates spoke to a packed auditorium at the University of California, Berkeley on Tuesday about the challenges facing early-stage startups addressing climate change.
- He sees Breakthrough Energy's role as a catalyst among more traditional venture investors that are hesitant to back technology that hasn't yet been proven or commercialized.
- The changing macroeconomic cycle, which Gates says is changing "as rapidly as any" in his lifetime, will scare off those investors that Breakthrough is targeting.
What they're saying: "We will go through a winter period for a number of years," Gates says of the macroeconomic outlook.
- "We will have, like in 2001, where the valuations were too high and will now go to the other extreme. The question is, can we still catalyze capital in these things that are unproven," Gates says.
