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Energy Transition Ventures is launching the first venture capital fund in Texas aimed at funding startups that can help transition us from fossil fuels to clean energy.
The Houston-based fund has closed its first capital raise in February and it is targeting a total fund size of $75 million.
As rapidly falling costs in key energy sectors have made renewable power cheaper to build than fossil power plants are to run, Energy Transition Ventures will invest in energy transition technologies. Founded in the world’s energy capital by cleantech startup executives and venture capitalists Craig Lawrence and Neal Dikeman, the fund has an anchor investment from two operating companies from the GS Group of South Korea.
The fund is investing in early stage startups in North America. Investments will focus on companies driving or benefiting from the energy transition off fossil fuels, across categories including distributed energy, electrification, mobility, and resource efficiency. The fund made its first investment in March.
In the past, Lawrence and Dikeman helped manage cleantech investing at Accel Partners, Jane Capital, and Shell Technology Ventures, as well as held operating roles in solar and smart grid startups. During the first cleantech wave, Dikeman was also well known in the sector for authoring CleantechBlog.com and starting the Cleantech.org network.
Lawrence and Dikeman formed the fund in recognition of the disruption occurring across the energy industry due to the significant cost reduction in renewable energy technology (solar, wind, energy storage), decarbonization efforts by both business and governments, and the development of network, computing, and intelligence technologies applicable to the energy industry, said Lawrence in an email to VentureBeat.
“These trends are making it possible for new entrants to enter the energy sector in ways that were previously not possible,” Lawrence said.
They had seen first hand the challenges and opportunities in this sector, and decided to get back “off the bench” to launch a new early-stage fund in the sector, Lawrence said.
Tae Huh, managing director of GS Futures, said in a statement that this is the first investment from the new GS Futures fund in Silicon Valley. The firm’s parent company is the energy, construction, and retail conglomerate GS Group of Korea.
Dikeman said in a statement there 500 multi-billion dollar energy companies globally, and they’re going to be disrupted in the energy transition. Those companies are spread across energy and power, transport, real estate, industrial, consumer, and agriculture. As the energy capital, the focus in Texas made sense.
“We view the energy transition as a broad shift in fuel sources (from fossil fuels to renewable, carbon-free sources) and fundamental changes in how energy is generated, distributed, and consumed – shifting from a centralized, highly regulated set of technologies and markets with passive consumers, to much more distributed, intelligent, and networked technologies and markets, and more active consumers,” Lawrence said. “We are investing across multiple themes, including electrification, distributed energy, mobility, and resource efficiency. Some specific examples of areas we are focused on are: resiliency – how we make the electrical grid more resilient to disruption, and electric vehicles – what ecosystem technologies and products are needed to support the massive shift underway from gasoline-powered transportation to electric transportation.”
Energy Transition Ventures also announced that Jon Wellinghoff, former chair of the Federal Energy Regulatory Commission, and Deb Merril, former co-CEO of Just Energy, joined as advisors. GS Energy executive Q Song has moved from Seoul, Korea, to join the Energy Transition Ventures investment team in Houston.
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