On the heels of last year’s Paris climate change talks and multiple geopolitical and environmental crises there’s a flood of new cash coming in to finance sustainable technologies and development in 2016.
Longtime investor Andrew Chung felt it in 2015 when he decided to part ways from Khosla Ventures (with that firm’s blessing) and launch his new fund 1955 Capital.
The firm, which has announced its first close with a sizable $200 million commitment, focuses on investments in energy, food, agriculture, health, education, and sustainable manufacturing.
In all, investors focused on renewable energy and sustainability technologies have received commitments of $830 million in the first two months of 2016.
Reuben Munger,the founder of a big, new sustainability firm, received commitments of $430 million for his Boulder-based fund, Vision Ridge Partners; while the Norwegian energy giant Statoil has committed $200 million to invest in renewable energy growth companies over the next six years.
For Chung, an investor in the broad thesis of sustainability for nearly a decade, the launch of 1955 Capital is the culmination of years of thinking about how best to marry capital investment with long-term thinking about the future of the planet’s economic and environmental health.
Through 1955 Capital, Chung hopes to bring the resources of developed economies (read money and technology) to bear on the environmental and social problems facing emerging markets — initially in the world’s second largest economy: China.
For many in the world, the demand for renewable sources of power in an effort to reduce pollution and combat global climate change, is not an academic discussion… or a matter of numbers alone.
In China, an August study linked pollution in that country to 1.5 million deaths every year. And the director of the Central Intelligence Agency has said that climate change is a cause of geopolitical instability — exacerbating political crises and contributing to food insecurity that causes unrest worldwide.
“The matching-up of the great minds of these scientists in the West and the survival driven demands of people in the East are what it’s going to take to commercialize these technologies,” Chung told me in an interview.
The former Khosla Ventures partner and Lightspeed Venture Partners principal already has a long history of doing just that. The success of investments in LanzaTech and Ecomotors hinge on their ability to leverage huge amounts of capital in markets like China to develop the projects that will drive revenues.
It’s a fact that Chung recognized during the lean times for the renewable energy market in the mid-to-late 2000s. “I’m going to be investing in technologies for the developed world to solve the problems of the developing world,” Chung said.
He wouldn’t comment on where his newfound money came from, nor would he comment on the ultimate size of his fund (and a quick search of Securities and Exchange Commission filings didn’t turn up anything either).
China is the first market where Chung and his firm will look to start developing their thesis that Western technologies and emerging market demand can yield success, but it’s not the only region where the firm will look to commercialize technologies.
In a statement, the company mentions Southeast Asia and Africa as potential geographies where the firm will also spend significant time and resources alongside strategic partners.
Chung sees 1955 Capital — named for the year in which Charlie Parker, Alexander Fleming and Albert Einstein died and the year in which Bill Gates, Steve Jobs, Eric Schmidt and Vinod Khosla were born — as part of a new wave of investors.
Other institutions seem to agree. Statoil launched its new venture investment vehicle earlier this month with the notion that sustainability and renewable energy will represent a significant source of growth for the company — a powerhouse in the extractive fossil fuel markets.
“The transition to a low carbon society creates business opportunities and Statoil aims to drive profitable grwoth within this space,” said Irene Rummelhoff, the executive vice president for New Energy Solutions at the fund. “Through the new fund, we look forward to investing in attractive and ambitious companies and contribute to shaping the future of energy.”
The fund — focused almost exclusively energy — will support the company’s existing alternative energy initiatives, invest in new energy technologies, and strategic growth opportunities, according to the fund’s managing director, Gareth Burns.
Burns said that the firm would invest in things like onshore and offshore wind technologies, solar energy, energy storage, energy transportation, energy efficiency and smart grids.
Unlike 1955 Capital, which will lead deals, Statoil Energy Ventures intends to be primarily a minority investor.
Meanwhile, in Boulder, Reuben Munger’s team is mirroring the broad scope of Chung’s investment thesis. His firm’s Sustainable Asset Fund in conjunction with Capricorn Investment Group (the investment firm managing money for eBay’s first employee and first president — Jeff Skoll) will invest in energy efficiency, renewable power generation, agriculture, land, water and transportation.