Energize Capital (previously Energize Ventures) – a leading climate software investor – recently announced the close of its second growth fund, bringing the firm’s total capital commitments for the growth equity platform to $300 million.
This funding brings Energize’s assets under management to $1.2 billion, surpassing $860 million in total committed capital from LPs. And to reflect this extension of strategy into growth equity and to position itself for future growth, the firm has changed its name to Energize Capital. With the expanded strategy, the investment firm will continue to support enduring climate software businesses as they scale amidst significant economic tailwinds.
The official close of Energize’s growth platform occurs at a time when growth capital is in high demand, especially for the climate market. Over 2,000 early-stage climate companies received institutional funding in the last two years, according to CTVC data. If just 10% of these companies reach the growth stage, this means about 200 climate companies will be looking to raise capital in the next two years, but growth capital providers are considered to be in short supply.
Energize’s skill is scaling asset-light digital climate solutions that enable the new energy economy. And with its new growth equity strategy, Energize can continue providing capital and operational support to enduring late-stage climate software companies. So far, Energize has made seven investments out of its growth funds, including a recently announced investment in PVcase’s $100 million round, and follow-on investments in its venture capital portfolio companies Sitetracker, DroneDeploy, and Aurora Solar, which is one of the most valuable climate software companies today.
Across four funds spanning venture capital and growth equity, Energize is backed by a diverse set of LPs representing strategic, institutional, impact, and family office investors. Along wtih Invenergy, Energize’s LPs include CDPQ, CAPROCK, Credit Suisse, HASI, Xcel Energy, and other institutional capital providers.
So far, Energize has invested in 26 climate software companies accelerating the transition to sustainable energy through its venture capital and growth equity strategies. And Energize closed its first $165 million venture fund in 2018, followed by a $330 million vehicle in 2021. Last year, the firm added 12 new team members and deployed $260 million across its portfolio.
KEY QUOTES:
“As the market for climate software matures and companies grow into billion-dollar valuations, growth equity investors have access to an abundant pipeline of enduring businesses in climate for the first time. At Energize, we intend to be the go-to partner for entrepreneurs as they scale – from venture capital to growth equity and beyond.”
“When Energize was founded in 2016, our guiding thesis was that the transition to a sustainable economy represents a generational transfer of capital, and that it would require digital technologies to enable and accelerate scale. Seven years later, our ambition remains unchanged, but the opportunity for climate software has skyrocketed beyond expectations. For example, our portfolio’s software revenue has grown from $100 million to nearly $400 million over the past three years. Unveiling our growth strategy and announcing the shift to Energize Capital represents our commitment to scale our strategy to grow with our entrepreneurs and the maturity of the space.”
— John Tough, managing partner of Energize Capital
“Our belief when founding Energize was that access to Invenergy, its entrepreneurial culture, assets and people create a strategic advantage for an investment platform in the rapidly scaling energy transition space. The expansion of Energize’s strategy validates this approach, and we look forward to continued partnership in this next phase of growth.”
— Michael Polsky, chair of Energize’s investment committee and CEO of Invenergy, the leading sustainable energy and infrastructure developer and an anchor investor in Energize
