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The Engine Ventures has raised $398 million for a third fund to back companies in climate tech, health, and advanced systems. 

Why it matters: The MIT spinout has built a reputation as a patient investor willing to back some of the most ambitious plays in climate.

Zoom in: The firm plans to back about 30 startups with its latest fund, making lead investments of $1 million to $10 million for pre-seed through Series A rounds.

Fund III pushes the firm's AUM past $1 billion. It closed the fund this month, concluding a raise that started in June 2023.

State of play: The Engine Ventures focuses on what it calls "tough tech" — moonshot technologies that, if proven, promise enormous upside. 

Early bets include unicorns Form Energy, which is developing a grid battery that can last days instead of hours, and Commonwealth Fusion Systems, which is pursuing emissions-free fusion energy.

Reality check: The firm has had one exit: AI developer Zapata AI, which saw its share price plunge after completing a SPAC merger in late March.

Yes, but: Other Engine Ventures startups are nearing milestones that energy-transition champions and investors have long awaited. 

Form Energy, for example, expects to start production this year. Commonwealth Fusion is building an enormous demonstration machine west of Boston.

"If it's a much longer wait, you've got to have a much larger market," CEO Katie Rae says. "You've got to take these big swings if we're going to get where we need to get to on decarbonization."

Flashback: The company launched in 2016 as a venture firm and incubator called The Engine.

Exclusive: Engine Ventures raises $398M to back 'tough tech'

Fund III pushes the firm's AUM past $1 billion.

Illustration of the Earth shaped like metal cog

Climate tech

The Engine Ventures has raised $398 million for a third fund to back companies in climate tech, health, and advanced systems. Why it matters: The MIT spinout has built a reputation as a patient investor willing to back some of the most ambitious plays in climate.

Exclusive: Engine Ventures raises $398M to back 'tough tech'

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