Congruent Ventures, a San Francisco-based climate and sustainability venture firm, has closed its third flagship fund at $275 million, beating its $200 million target.
Fund III’s investors include the California State Teachers’ Retirement System, the Grantham Foundation, the University of California, Sobrato Capital, Strategic Investment Group, Northwestern University, Vintage Investment Partners and clients advised by Cambridge Associates.
“We are delighted to have the support of some of the largest and most mission aligned institutional investors in the world supporting our early-stage climate focus,” Congruent co-founder and managing partner Abe Yokell said in a statement. “With institutional investors going through a reset across their venture portfolios, we hope that our fundraising process proves there is returns-focused appetite to invest in climate solutions.”
Firm co-founder and managing partner Joshua Posamentier said LP demand far exceeded Congruent’s fundraising goal. “While we regret having to turn away over $300 million of investor interest in Fund III, we believe a disciplined approach to fund size will allow Fund III to continue to support climate entrepreneurs from the formation stage,” he said.
Congruent said it has backed 53 climate tech companies to date. Its portfolio includes companies such as Meati Foods, AMP Robotics, Fervo Energy, Span.IO and Hippo Harvest.
Founded in 2017 by Yokell and Posamentier, Congruent has grown its total assets under management to more than $1 billion.
Performance data are not available for Congruent Ventures I, which closed on $42.2 million in March 2018, or Congruent Ventures II, which closed on $175 million in April 2021.
Despite a broader pullback in fundraising for tech-focused venture capital funds, climate-focused funds continue to find a strong appetite among investors.
In the first eight months of this year, 37 VC funds focused on climate tech raised $13 billion, according to a CTVC report published in early September.
The number of limited partners interested in climate “has never been higher,” whether it’s institutional investors, family offices or corporates, Energize Capital partner John Tough recently told affiliate title Venture Capital Journal. The Chicago-based firm closed on $300 million for its second climate-focused growth fund in July.
“The best LPs still demand excellence from institutional investing habits,” Tough told VCJ. “They still demand to see some version of a track record, higher to add value, higher to source – so that part is as hard as ever. But the number of parties evaluating the space is higher than the historical average.”
LPs are so eager to get into climate funds that CalSTRS actually bought a stake in Just Climate, a climate investment firm established by Al Gore’s Generation Investment Management. Just Climate, which makes both venture capital and private equity investments in climate-focused technology companies, sold the ownership stake to CalSTRS earlier this year. A CalSTRS spokesperson confirmed the purchase but did not reveal the amount of the investment or the size of the ownership stake, as previously reported by VCJ.