The Challenge of Climate Tech Financing

Like many startups, climate tech companies often face a "valley of death" between early-stage funding and growth capital needed to scale proven technologies. However, because these startups are frequently hardware-focused—requiring physical solutions for physical problems—this gap is significantly wider. Financing a first-of-a-kind power plant or factory can cost tens or hundreds of millions of dollars.

Introducing the All Aboard Coalition

A new fund aims to bridge this financing gap, also known as the "missing middle." Called the All Aboard Coalition, it plans to raise $300 million by October to help startups secure the $100 million to $200 million rounds necessary for building first-of-a-kind projects. While $300 million might seem modest for such capital-intensive needs, the fund's real strength lies in its network of prominent climate investors, designed to signal to larger institutional investors that these companies are worth backing.

Leadership and Network Power

The fund is led by Chris Anderson, the renowned curator and former head of TED Talks, who transformed TED into a global platform for spreading ideas. He is now applying his network-building skills to climate technology investing. The coalition includes top firms like Ara Partners, Breakthrough Energy Ventures, Clean Energy Ventures, Congruent Ventures, DCVC, Energy Impact Partners, Future Ventures, Galvanize Climate Solutions, Gigascale Capital, Khosla Ventures, NGP Energy Capital Management, Obvious Ventures, Prelude Ventures, S2G, and Spring Lane Capital.

All Aboard will invest through equity or convertible equity, not loans or project-specific backing, positioning it firmly in the venture capital space rather than project finance. Some partners from these firms are investing in the fund, though it's not a requirement for participation.

Signaling Success and Future Needs

The hope is that the new fund will serve as a "Sequoia-like signal" in the sector, meaning that when All Aboard invests, other experienced funds will follow. For climate tech startups to cross the valley of death, they'll collectively need far more than $300 million—potentially exceeding the $60 billion in assets under management by All Aboard members. Attracting generalist investors will be crucial for the fund's success and for the broader climate tech sector to achieve commercial breakthroughs.