Bill Gates’ $1bn cleantech fund to focus on agriculture

A group of high-profile investors led by Bill Gates has launched Breakthrough Energy Ventures (BEV), a $1 billion investment vehicle providing growth capital for innovative clean energy companies across five key investment areas, one of which is agriculture, Agri Investor sister publication Low Carbon Energy Investor reported.

The venture has raised financing from 21 famous executives, business leaders and entrepreneurs including Amazon chief executive Jeff Bezos, Alibaba founder Jack Ma and Bloomberg LP founder and former New York City Mayor Michael Bloomberg to fund early-stage cleantech businesses.

BEV is a 20-year fund, co-chairman John Arnold, former energy hedge fund manager of Centaurus Advisors, said on a conference call. The $1 billion fund held a first close around the time BEV officially launched, and Arnold said a second close is expected next spring.

“Our goal is to build companies that will help deliver the next generation of reliable, affordable and emissions-free energy to the world,” Gates said.

The next step for BEV is to hire key management positions in the next three months and then to find scientists and advisors to help begin searching for promising cleantech opportunities, Gates said.

The Microsoft founder was involved with the launch of BEV’s parent organisation, the Breakthrough Energy Coalition, a little over a year ago at the COP21 conference in Paris. There he also helped start Mission Innovation, an initiative created to increase government investment in clean energy research and development.

BEV will work with governments and research institutions participating in Mission Innovation to invest in technologies emerging from public research pipelines that need capital to make it to market. According to its website, BEV will invest in companies at any stage, from seed to commercialization, in five key areas: electricity, transportation, agriculture, manufacturing and buildings.

The goals relating to agriculture outlined on the website include reducing emissions; developing new sources of low-cost, low-GHG proteins; eliminating spoilage and loss in the delivery chain; and addressing deforestation, among others.

Drawing capital from high-net-worth individuals and foundations will allow BEV to invest in riskier opportunities that may take longer to reach commercialization than most venture capital funds can stomach.

“This fund can have the long view,” Vinod Khosla, founder of Khosla Ventures and a BEV investor, said during the call.

Khosla Ventures was founded in 2004, around the time venture capital started pouring into the cleantech space. By 2008, venture capitalists were investing $5 billion per year in cleantech companies, according to a study published by the Massachusetts Institute of Technology. Funding has since dropped to $2 billion per year after what many consider was a cleantech crashed.

“What I have learned over the last decade is breakthrough energy technologies need the long view,” Khosla said, “the ability to be patient and the ability to take more risks than other investors might.”

Another measure BEV will use is to have companies like US utility Southern Company and French oil and gas major Total act as strategic partners to gauge whether potential technologies are options the industry would adopt.

“Our mission is to find, fund and accelerate the success of technologies and entrepreneurs that will create a zero carbon future,” BEV chairman John Doerr said. “Innovation will be a hallmark of what we’re doing.”