USV raises second climate fund to fuel blistering deal pace

The New York firm has made 17 climate-related investments in the past two years, including 10 this year.

Union Square Ventures, which has invested in 17 climate-related companies in the past two years, has closed on $200 million for its second climate fund to fuel its intense pace of dealmaking.

USV Climate 2022 is at least the 13th climate-related venture fund raised this year, according to research by Venture Capital Journal. Altogether, the vehicles have collected at least $3.3 billion, with at least three of them beating their targets by a significant margin.

Union Square did not disclose the names of LPs in the new fund, but at least one of them is the Oregon Public Employees Retirement System (managed by the Oregon State Treasury), which said it had committed up to $20 million in July.

Union Square, based in New York, previously raised $162 million for USV Climate 2021, according to a January 2021 announcement. Oregon and the Massachusetts Pension Reserves Investment Management Board were LPs in the debut vehicle.

Samson Mesele, partner and general counsel, said USV Climate 2022 will invest globally and that the firm’s first climate fund invested in companies in Australia, Brazil, Egypt, Germany, India, Switzerland, the US and UK.

“Given the state of the climate crisis and the opportunity set in the market, we have a renewed sense of commitment to this investment thesis: we will continue investing in early-stage companies and projects that reduce and remove emissions as well as provide adaptation measures,” Samson Mesele, partner and general counsel, Mesele said in a statement about the new fund.

USV has “invested in a wide range of solutions, including nuclear, retail electricity, electric vehicles, waste fuel and e-fuel, soil and forest measurement, organic carbon removal, inorganic carbon capture and flooding prediction and analysis,” Mesele said.

The firm has made 17 climate-related investments, according to its website, including two in 2020, five in 2021 and 10 this year. Recent investments include Lithos, an agricultural carbon removal company; Zanskar, which makes technology to accelerate discovery of geothermal energy; and FloodMapp, which makes predictive flood mapping tools and personalized alerts.