40 North launches $200 mln venture capital effort

Investment platform 40 North takes to the venture capital stage with a cleantech fund, led by former DBL partner Marc van den Berg.

Cleantech is far from its heyday of the last decade.

A two-year-old study from the Brookings Institute reported that cleantech investing declined to $5.2 billion in 2016, 30 percent off the $7.5 billion that went into the sector in 2011. Also, the number of deals fell from 649 in 2011 to 455 in 2016.

But Marc van den Berg, a longtime investor in energy and industrial materials, is seeing a revival in the broad cleantech sector. “VCs on Sand Hill Road are no longer rushing to cleantech deals, but we are seeing renewed interest from corporates,” said van den Berg. “Corporate VCs are filling the [investment] gap.”

Take, for example, New York-based Energy Impact Partners, a $700 million investment fund that’s largely backed by utilities.

In addition, the list of active cleantech investors also includes such corporate VCs as ABB Technology Ventures, BP Ventures and Innogy Ventures, among others.

And now 40 North is launching its own venture innovation fund affiliated with Standard Industries, a New-York based building materials and construction conglomerate, which operates in 80 countries. The 40 North venture fund will back early-through-late-stage venture deals, with a focus on emerging technologies in the industrial space.

The fund will be $200 million in size, said van den Berg, who will lead the 40 North venture fund as managing director.

Van den Berg previously was a partner at the impact VC DBL Partners and was a general partner at the cleantech and life sciences investor Technology Partners before that. He also spent six years as a managing director at the cleantech investor VantagePoint Capital, where he focused on energy and advanced technology investments.

During a decade of investing in the space, he has backed such material science and energy-efficiency companies as Bridgelux, Amprius, iWatt and Kaiam.

Van den Berg said that the 40 North VC fund, which will be based in Campbell, California, has an associate on the team and the firm is looking to hire an additional managing director, to be announced within the next month.

He said that the fund will back 20 to 25 companies and that 40 North will operate independently when making investments. The firm will aim to lead deals and take active director roles, he said.

Van den Berg noted that 40 North is the investment platform related to Standard Industries, and it makes private equity and debt investments. He said access to this additional capital is an advantage to his 40 North venture effort.

The name 40 North comes from the latitude of Central Park.

“If one of our portfolio companies has raised Series A, B or C and they need more capital, we can help with that,” he said. “If you’re an entrepreneur, wouldn’t you want a financial partner with worldwide offices, financial ties and industrial expertise?”

Correction: A previous version of the above story had the incorrect name of the venture fund. It is called 40 North.