(Bloomberg) -- Amid a lull in funding for moonshot clean technologies, one venture capital firm has managed to raise $200 million to support investments at the intersection of climate and artificial intelligence.
Blue Bear Capital has raised a $160 million Fund III and an additional $40 million in follow-on vehicles to fund startups applying AI across the energy, infrastructure and climate sectors.
Climate-tech funding is on track to fall about 50% this year, according to data from BloombergNEF. Many venture capitalists have had their heads turned by another, buzzier sector: artificial intelligence. Investment in AI has risen since the third quarter of 2023, according to Pitchbook data.
The rise of AI has fueled demand for data centers, strained electricity grids and extended the life of fossil fuel plants. But a growing number of investors like Blue Bear also view it as a powerful tool to help improve the performance of power grids and such clean-energy assets as electric vehicle charging stations.
When Blue Bear launched in 2016, most institutional investors associated climate investing with risky, capital-intensive hardware, said partner Ernst Sack. The perceived timelines for getting a return on investment were long, and raising funds was a challenge, he said.
“We’re not in that category,” Sack said, in an interview. “We want shorter cycles, higher returns on a lower capital intensity, but driven by innovation and AI.”
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