SOSV’s Climate Portfolio Achieves Significant Growth

The climate-focused investment portfolio of SOSV Investments, an early-stage investor, has attracted approximately $2 billion in subsequent funding rounds following the graduation of its portfolio companies from various accelerator programs. Collectively, these companies currently boast a market capitalization nearing $6 billion.

Earth Day Results and Portfolio Overview

Prior to Earth Day, SOSV, the firm behind accelerators like HAX, IndieBio, Chinaccelerator, and MOX, assessed the impact of its $89 million investment in these companies. The results proved substantial, particularly considering the average age of a company within the portfolio is just four years.

SOSV categorized the companies within its Climate Tech 100, distinguishing between those directly impacting the planet and those supporting carbon removal efforts. A third group comprised startups developing marketplaces for low-carbon products and services.

The Driving Force Behind Climate Investment

“Our core strategy revolves around supporting impactful and purposeful endeavors,” stated Sean O’Sullivan, founder of SOSV Investments. “We aim to invest in powerful, undeniable trends, and climate change represents the most potent force of our time.”

IndieBio’s Focus on Planetary and Human Health

Since the launch of IndieBio six years ago, led by Arvind Gupta (now at Mayfield Fund), SOSV’s life sciences accelerator has maintained a dual focus on both human and planetary wellbeing. This approach facilitated the recognition of a growing wave of climate tech applications within the life sciences sector.

This led to early investments in companies such as Perfect Day, Memphis Meats, Geltor, and MycoWorks, all of which utilize biological materials as alternatives to conventional animal products.

“A commitment to planetary health has always been central to our mission,” explained Po Bronson, the new head of IndieBio (and co-author of “Decoding the World” with Gupta). “Arvind didn’t require extensive persuasion to allocate $100 million towards this initiative.”

Consumer Demand and Sustainable Practices

Bronson highlighted the significance of the food sector, noting that consumer choices are driving companies to seek sustainable alternatives. Shifting towards plant-based products represents a consumer decision with a considerable impact on planetary health, alongside personal wellbeing.

He added that altering other systems often necessitates legislative action or substantial industrial support.

HAX Shenzhen and Sustainable Manufacturing

Meanwhile, Duncan Turner’s hardware group at HAX Shenzhen is witnessing increased adoption of sustainable manufacturing practices by industrial companies. The 3D-printing company Formlabs, for example, has secured significant funding with a process that directly reduces the carbon footprint of manufacturing.

“Previously overlooked, the methods of production are now under scrutiny,” Bronson observed. “All publicly traded companies are now required to account for their environmental impact, driving adoption across the manufacturing sector.”

Future Opportunities in Green Chemistry and Beyond

Looking forward, Bronson anticipates opportunities within green chemistry to expand beyond life sciences applications in the food industry. This includes technologies offered by startups like Zymochem, developing biorecyclable materials for diapers, and Pili, creating biologically-based dyes and pigments.

He is also actively seeking biological solutions for large-scale, passive greenhouse gas sequestration in oceans and soil.

Innovative Technologies for a Sustainable Future

Turner is focused on identifying companies like sepPure, which eliminates the need for chemical separation agents in oil separation, and Divigas, which offers a method for green hydrogen production.

“Investment in climate tech isn’t just environmentally responsible; it’s financially viable,” O’Sullivan emphasized. “Our net IRR exceeds 30%. Investing in these companies offers both financial returns and a positive impact.”

Note: This article has been updated to reflect the correct names of SOSV accelerator MOX (previously listed as Food Labs), sepPure (previously listed as Socure), and Divigas (previously listed as DivyGas).