DC Venture Capital (DCVC) modified its original $500 million goal for its inaugural climate-aimed fund, DCVC Climate Select, to $300 million amid changes in market trends and the fundraising atmosphere. Despite raising $157 million by the following year’s end, market shifts necessitated this adjustment. Even so, DCVC pressed forward, remaining hopeful about DCVC Climate Select Fund’s prospects.
Focusing on climate-friendly investments, DCVC persevered in searching for progressive technologies and groundbreaking solutions to counter the environmental crisis. This tenacity underlines venture capital’s quintessence, resilience in uncertainty.
DCVC aims to strategically capitalize on the $157 million already gathered to fuel its climate initiatives. Despite adjustments in the initial financial target, the firm stays optimistic, considering this an opportunity for growth and resilience.
Currently, the fund’s target is amending to a more attainable $400 million, aligning with DCVC’s present expectations. Emphasizing this adjustment, DCVC demonstrates its dedication to mid-stage climate startups, currently seen as under-resourced, thus showing signs of hitting its new financial target.
Previously, DCVC had invested around $360 million from various funds into climate startups over ten years. The initial $500 million goal remained uncertain until financial contributions from Limited Partners (LPs) could be secured.
Adjusting DCVC’s climate fund amid market shifts
In response, DCVC shifted its aim to a more realistic yet ambitious target, taking into consideration market risks such as the startup scene’s unpredictable nature and challenges within the climate sector.
DCVC’s robust climate-centric portfolio positively impacts its fundraising efforts. For example, Twelve, a firm in their portfolio creating traditional fossil fuel-reliant products from carbon, recently signed a 14-year buying agreement with International Airlines Group for 260 million gallons of the company’s eco-friendly aviation product. This agreement enhances DCVC’s financial stability and affirms its commitment to fighting climate change, thereby enticing more fundraising opportunities.
Despite the volatile fundraising cycle in 2022 and 2023, climate-focused VC funds are on the incline. Accumulating over $710 million in 2024 thus far, they are on track to equal or surpass 2023’s $2.17 billion and almost reach 2022’s record of $2.9 billion. Amid predictions of a challenging year, DCVC’s new climate fund with a significant focus on clean technology and renewable energy breakthroughs could become an exception.
Endorsed by the pressing need to address climate change, these funds are proving resilient amid financial instability. Their success highlights the increasingly important role of venture capital in the climate solution hunt. Consequently, while the overall VC fundraising environment could potentially be challenging, climate-centric funds like DCVC’s new offering might defy these odds.
