Fighting climate change with venture capital is different this time

Axios Media
April 11, 2021

Sil­i­con Val­ley got a black eye a decade ago when its big ven­ture cap­i­tal for­ay into expen­sive and nascent clean­tech didn’t pan out—but its recent­ly renewed inter­est in a wider scope of tech­nolo­gies that can tack­le the cli­mate cri­sis could be dif­fer­ent this time around.

Why it mat­ters: Cli­mate change is one of the most press­ing chal­lenges of our time, and the tech industry’s inno­va­tion could be a pow­er­ful tool to stem it.

Flash­back: Sev­er­al years after the Dot­com bust, a num­ber of promi­nent ven­ture cap­i­tal firms like Klein­er Perkins, DFJ, and Khosla Ven­tures bet big on clean tech as the next big thing.

  • Ven­ture cap­i­tal jumped from about $300 mil­lion a year in clean­tech invest­ments between 1996 and 2005, to $1.7 bil­lion in 2006, and peaked at $4.3 bil­lion in 2011, accord­ing to the NVCA.
  • And while some investors did well and backed suc­cess­ful com­pa­nies, the spec­tac­u­lar crum­blings of com­pa­nies like Solyn­dra and Fisker kept a lot of VCs and lim­it­ed part­ners away for many years.

Fast for­ward: The cli­mate cri­sis has sparked an inter­est from Sil­i­con Val­ley and ven­ture cap­i­tal­ists, with influ­en­tial investors like start­up accel­er­a­tor Y Com­bi­na­torUnion Square Ven­tures, and Sequoia Cap­i­tal get­ting more seri­ous about invest­ing in poten­tial solutions.

This time around, investors tell Axios that there are some fun­da­men­tal differences

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