Clean Energy Ventures raises $305 million to back early-stage climate startups

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Clean energy stocks may be underperforming in the public market, but there is still great appetite for companies focused on decarbonization in private markets — with Clean Energy Ventures' new fund serving as the latest example.

The climate tech firm said Wednesday that it raised $305 million for its second fund, five years after closing its first fund. This latest fund was oversubscribed — the initial target stood at $200 million — but interest from limited partners including The Grantham Foundation, Builders Vision and Carbon Equity led to a higher raise.

The firm is already putting the new money to work, focusing on technologies that go beyond the traditional green investments of solar and wind.

Co-founder and managing partner Daniel Goldman identified industrial decarbonization as one compelling vertical — specifically emissions-reducing technology for the cement and steel industries.

«When you think about where do we need to have material impact, and where are sectors that technology really hasn't changed for many, many decades, steel and cement rank at the top of the list. So we think there's huge opportunity there,» he told CNBC.

Two other areas of interest for the new fund include plastics — both more efficient recycling as well as cost-competitive bioplastic production — and grid-improving technologies for distributed energy, such as virtual power plants.

Clean Energy Ventures backed 20 companies in its first fund and has already made six investments via its second fund, including Israel-based green ammonia company Nitrofix, as well as sustainable aviation fuel company Oxccu, which is based in the U.K. Clean Energy Ventures is also opening a new office in London, with Goldman calling the European