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Climate tech investors SOSV raises its fifth and largest fund

Lab space at IndieBio, part of SOSV, in San Francisco. Photo: Courtesy of SOSV.

Lab space at IndieBio, part of SOSV, in San Francisco. Photo: Courtesy of SOSV

Early stage climate tech investors SOSV has closed its fifth and largest fund, raising $306 million.

Why it matters: The haul underscores the continued demand from institutional investors around climate tech, particularly for VCs with a history of returns.

Driving the news: SOSV founding and managing general partner Sean O'Sullivan said the fund took over a year to close given the tough fundraising environment.

  • About a quarter of the fund came from corporations, a larger portion than prior funds, said O'Sullivan.
  • SOSV plans to invest more in energy decarbonization with this fund, with around 20% already deployed.

Catch up quick: SOSV backs early stage science and hard tech startups across climate and health and has incubators with lab space in Newark, New Jersey, San Francisco and New York City.

  • O'Sullivan founded the firm in 1995 and started focusing more on climate investments around 2007.
  • About 40% of SOSV funds go into about 80 new startups, and about 60% is invested in follow-on capital for companies already in its incubator programs.
  • SOSV says the climate tech startups out of its third and fourth funds had a 50% gross IRR from 2015 to 2022.

The big picture: Companies still need to invest in tech innovation to compete, navigate new technologies like AI and meet sustainability goals.

Editor's note: This story was updated to clarify the IRR returns in paragraph 9.

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