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With much of the world’s population sweltering as global temperatures break new records, it feels like an apt moment to check in on the state of climate tech funding and sustainable investing. We are always on the lookout for signs of progress and hope, and didn’t have to look far to find it.
New data from Climate Tech VC shows that just over $13 billion was invested in climate tech startups worldwide in the first half of 2023, a slowdown from last year. However, as GreenBiz points out, there’s cause for optimism as venture capitalists continue to pour money into promising startups, an influx of tech workers flock to climate job opportunities, and much of the Inflation Reduction Act’s $400 billion for climate solutions remains to be allocated. And Crunchbase data shows many climate-focused investors remain pretty active.
In more good news, we see continued momentum for impact investing and game-changing funds lifting underrepresented founders. You’ll find more on that below, along with an inspiring story about how an untraditional background can help unlock tremendous opportunities.
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| From Underdog to Venture Capital Leader |
Laela Sturdy became head of CapitalG, Alphabet’s growth stage venture arm, earlier this year, joining a small but growing group of women leaders in the venture capital (VC) industry. Just 13% of decision-makers at US-based VC firms are women, and 64% of firms do not have any female partners, according to All Raise.
The daughter of immigrants, Sturdy has been described as an underdog and rose to the top by taking calculated risks that led to some of CapitalG’s lucrative investments. By 2021 — eight years after joining the VC firm from a career in marketing, strategy, and sales roles at Google — she had 10 unicorns under her belt, including Duolingo and Stripe. She’s credited with seeing opportunities with companies and industries that other investors underestimate.
Sturdy hopes to pave the way for more women in the VC world. In a profile for Fast Company’s Queer 50 ranking, Sturdy says she plans to create more pathways for other underrepresented investors at CapitalG through training programs and recruitment strategies. Her story is a powerful example of how taking risks leads to major success. |
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| Impact Generates Alpha |
| Nearly two-thirds (65%) of impact exits meet or exceed financial performance expectations, according to a new study from the association Impact Capital Managers (ICM) and Morrison Foerster. The study examined 230 exits from private capital funds. In addition to the strong financial performance, researchers found investors’ impact goals were met or exceeded in 81% of exits. |
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Top Sectors for Impact Investing
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| Pitchbook’s latest Sustainable Investing Survey offers a peek into how global investors and service providers are thinking about ESG risk factors and impact investing today. It’s full of interesting data — for example, respondents report they are prioritizing energy, climate, and agriculture as their top categories of impact. That echoes a recent Global Impact Investing Network (GIIN) report finding the energy sector received the greatest share of impact investing allocations from survey participants. |
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| INCLUSIVE ENTREPRENEURSHIP |
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Untapped Opportunity: Investing in Underrepresented Founders
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| Closing the inequity gap in VC funding for underrepresented founders could unlock tremendous economic gains and spur innovation, new McKinsey research finds. Black- and Latino-owned businesses would generate an additional $1.6 trillion and $2.3 trillion respectively if they achieved funding parity with white founders. Additionally, startups with greater gender and ethnic diversity achieve 30% higher returns for investors. |
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| Lifting Founders of Color |
| Black founders receive only 1% of all VC funding today, but three new funds aim to boost that number. Aurora James, founder of Brother Vellies and the Fifteen Percent Pledge, is teaming up with Alisa Williams of VMG Partners to launch the Friends and Family Collective, an $850-million fund focused on founders of Black-owned businesses. Meanwhile, fintech firm Hello Alice and the Global Entrepreneurship Network will invest in women and founders of color through the $70 million Equitable Access Fund. There’s also the Impact America Fund, which just raised $112 million for its third fund, targeting founders building companies that can “uplift Black and Brown workers, families, and small businesses.” |
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Off the Beaten Track
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| If you want to enjoy the wonders of nature in peaceful quiet this summer, this list is for you. Forbes identified the seven national parks with the lowest attendance — from coral reefs in Florida to views of brown bears in Alaska. If you need more ideas, The New York Times suggests five less crowded locales with breathtaking views. |
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