At USV we describe ourselves as a “thesis-driven venture capital firm.” For our core fund, we have been investing against Thesis 3.0 for some time. Over the last couple of years, we have been developing a separate Climate Thesis, including making investments in companies such as Leap and Wren. We are excited to announce that we now have a $162 million Climate Fund specifically for that. Like our Opportunity Fund, this new Climate Fund will be managed by all the existing USV partners.
At the highest level, the Climate Thesis can be summarized as follows: The USV Climate Fund invests in companies and projects that provide mitigation for or adaptation to the climate crisis.
Mitigation is working on the causes of the climate crisis through either emissions reduction or drawdown of existing greenhouse gases from the atmosphere. Adaptation is working on the consequences of the climate crisis, such as increased risk of crop failure. Adaptation is part of the thesis in recognition that the climate crisis is not some distant future event but rather playing out in the here and now.
We will be breaking down this high-level thesis into specific ideas, much as we have done for Thesis 3.0. We will be publishing these as a series of blog posts going forward. The first such idea is using satellite imaging to enable high powered incentives for maintaining and improving forests (and eventually starting new ones). This idea has already resulted in an investment in SilviaTerra, which we are also announcing today.
The USV Climate Fund is a straight-up venture fund. We believe that decarbonizing the economy and dealing with past emissions (and their consequences), offers many opportunities for building important new companies that can produce venture type returns. The transformation of all aspects of the physical world over the coming decades will be on par with the changes brought about by digital technology. Unlike other USV funds which have focused primarily on bits, the Climate Fund will invest in both bits and atoms. Like our core funds, we will be targeting primarily Series A opportunities, which for us means something has been built that we can kick the tires on. That something can be as little as an early prototype and companies can definitely be pre-revenue.
We thank the limited partners who are trusting us with capital for this new thesis. And we are looking forward to backing entrepreneurs and teams working to help address the climate crisis.