Climate tech investor Earthshot sees potential in infrastructure

After closing its first fund, early-stage investor Earthshot Ventures sees a brighter future for climate tech, especially now that the infrastructure bill has passed the Senate.

Honolulu-based Earthshot, which announced it raised $60 million for its first fund earlier this month, invests in early-stage start-ups looking to address climate issues within communities.

Founding partner Dawn Lippert said the infrastructure bill is not only a boon for climate infrastructure start-ups, but it will also give rise to a larger ecosystem around it.

“These big infrastructure investments spark innovation and industry,” Lippert said. “If you think about solar, it’s kind of analogous to a big industry like real estate but also has thousands of finance companies and Airbnb and other kinds of innovations and companies.”

It is in this broader industry that Earthshot feels climate tech will continue to grow, especially as many people, investors included, see the larger value of protecting the environment and reducing carbon emissions.

The infrastructure bill, passed by the US Senate in August and awaiting a vote in the House, paints the government outlay for critical infrastructures such as roads, bridges and trains. The bill pays particular attention to the expansion of clean energy and gives provisions to electric vehicles and renewable energy, including solar power and natural gas.

As previously reported by Venture Capital Journal, other venture firms see potential growth from the passage of the infrastructure bill and call it a vote of confidence for several sectors.

Although Lippert hails the infrastructure bill, she said it was the so-called reconciliation bill that shows how committed the government is to protecting the environment.

“The infrastructure bill really does make some strides, but it’s the reconciliation bill that gets us to the commitments that the US has laid out through the Paris Agreement and other international commitments,” she said.

The budget reconciliation bill will bring together the Biden administration’s proposed $3.5 trillion budget, including expenditures for climate change. However, it has not passed either chamber of Congress, reported NPR.

Earthshot spun out of the non-profit Elemental Excelerator, which connects climate companies and entrepreneurs to investor networks. Its LPs include the Emerson Collective, McKinley Alaska, Microsoft, the Employee’s Retirement System of Hawaii, Stafford Capital partners and individuals such as Kleiner Perkins chairman John Doerr, founder of NextGen America and former Democratic presidential candidate Tom Steyer and Facebook chief product officer Chris Cox.

The fund focuses on four sectors within climate tech: energy, mobility, food and agriculture, and industry and carbon.

Earthshot managing partner Mike Jackson said the fund wants to work with companies that bring in unique technology to innovate in the climate space.

“Where we think really great companies come from is when they combine a unique insight of somebody who’s been operating in that space and technology from another industry,” Jackson said. “For example, in one of our companies, they’re applying artificial intelligence to materials discovery in batteries making.”