Breakthrough Energy Ventures, the climate-focused investment firm backed by Bill Gates, has raised some $839 million for a third flagship fund, according to a recent U.S. Securities and Exchange Commission (SEC) filing. Like the firm’s other funds, it is set to emphasize innovation in climate technology and support startups focused on emission reductions.
“We can confirm that Breakthrough Energy Ventures is working on a new fund, BEVIII,” the firm said in an emailed statement to Observer. The fund’s investment focus will encompass green solutions across electricity, transportation, manufacturing, buildings, food and agriculture, added the firm, noting that the timing and size of the fund has yet to be disclosed.
Gates, a co-founder of Microsoft (MSFT), established Breakthrough Energy Ventures in 2015 alongside a star-studded pack of investors that includes Amazon (AMZN) founder Jeff Bezos, Alibaba (BABA)’s Jack Ma, LinkedIn (LNKD) co-founder Reid Hoffman and Michael Bloomberg. To be considered for investment, startups must prove they can reduce emissions by at least half a gigaton, said Gates in a 2023 blog post.
According to its website, Breakthrough Energy Ventures currently has more than $3.5 billion in committed capital to invest in some 110 companies ranging from seed to growth stage. Its portfolio includes startups like E.V. battery maker QuantumScape and electric plane company ZeroAvia. Earlier this year, it co-led a $31.4 million funding round for Reactive Technologies, which specializes in grid stability measurements. It participated in financing rounds for companies like the carbon-free hydrogen-focused Koloma and fusion-tech startup Xcimer.
What is BEVIII’s funding goal?
The firm closed its inaugural fund, BEV I, at $1 billion in 2016. Its second fund, BEV II, closed in 2021 with $1.25 billion. In October, Gates revealed that Breakthrough Energy Ventures was “in the process of raising fund three, and that’s going very well,” during an interview with the Financial Times. He noted that the third fund would be around the same size as the first two, meaning it should total in the $1 billion range and that its addition would increase the firm’s portfolio by some 40 percent. Having raised $839 million already, BEVIII is on track to be one of the largest climate funds raised this year, according to Pitchbook.
Bill Gates’ climate-focused venture capital initiative belongs to a larger umbrella group known as Breakthrough Energy. The billionaire launched it after realizing that “venture capital alone” could not combat climate challenges. The group contains policy teams, a fellows program and a Catalyst initiative that funds large-scale projects.
Gates, a longtime advocate of tech climate solutions, has also been a prominent green donor via his Gates Foundation nonprofit. In 2022, for example, his foundation pledged $1.4 billion to help smallholder farms handle climate adaptation needs.
He has also lauded the potential of A.I. for climate solutions like sustainable energy and carbon reduction, claiming that the technology’s innovations will combat its rising data center electricity usage. The billionaire has made several climate investments outside of Breakthrough Energy Ventures, including $1 billion funneled into Terrapower, a nuclear energy startup that earlier this year broke ground on a nuclear power plant in Wyoming.
