While clean energy stocks may be facing challenges in the public market, the private market is showing a great appetite for companies focused on decarbonization. Clean Energy Ventures recently raised $305 million for its second fund, exceeding the initial target of $200 million. Limited partners like The Grantham Foundation and Builders Vision showed strong interest, leading to oversubscription.
Clean Energy Ventures is directing its investments towards technologies that extend beyond the traditional green investments of solar and wind. Industrial decarbonization, particularly in the cement and steel industries, has caught the firm’s attention. Other areas of interest for the fund include plastics recycling, cost-competitive bioplastic production, and grid-improving technologies for distributed energy.
With 20 companies backed in its first fund, Clean Energy Ventures has already made six investments in its second fund. This includes companies like green ammonia producer Nitrofix and sustainable aviation fuel company Oxccu. The firm is also expanding its reach by opening a new office in London, with a focus on opportunities in Europe and Israel.
Since the launch of its first fund in 2019, Clean Energy Ventures has witnessed significant changes in the renewable energy landscape. The popularity of special purpose acquisition companies (SPACs) during the Covid-era has reshaped how clean energy companies access public markets. While some SPACs have underperformed, investor perception around clean energy investing remains positive.
Clean Energy Ventures’ limited partners are focused on returns rather than impact investing. The firm views initial public offerings (IPOs) as optional, preferring strategic sales as a means of exit for its portfolio companies. While none of the companies from the first fund have gone public or been acquired, there is interest from potential buyers.
Private equity is playing a growing role in energy-transition related deals, with investments jumping significantly in recent years. Private equity provides a pathway for companies that have outgrown venture capital but are not yet ready for public markets. Clean Energy Ventures collaborates with private equity to help its portfolio companies transition to the next stage of growth.
While clean energy stocks may be struggling in public markets, the private market continues to demonstrate strong interest in decarbonization-focused companies. Clean Energy Ventures’ success in raising funds and expanding its portfolio highlights the ongoing opportunities in clean energy investing. By focusing on innovative technologies and strategic partnerships, the firm is well-positioned to drive positive impact in the transition towards a greener future.