Breakthrough Fund, backed by Bill Gates, targets third $1bn in capital raising

Breakthrough Energy Ventures, a company founded by Bill Gates and backed with $1 billion in investment capital, is looking to raise an additional $1 billion for its latest fund. The money will be used to invest in technology and companies that are tackling global climate change.

Gates said that Breakthrough is “in the process” of raising Fund Three, and it’s going well. Breakthrough Energy Ventures’ investment portfolio would grow by 40 percent to 140 companies across a range of sectors, from energy to agriculture.

“We will have funds one and three of about the same size. Funds two and three are a little over $1bn. He said that we would also create some funds for “follow-on” projects.

The first fund, with a closing amount of about $1bn attracted a number of billionaires. In 2021, the second fund was closed with $1.25bn. The group has also established a $100mn Europe fund. The Breakthrough Boardand its investors include Mukesh Hohn, Jeff Bezos and Reid Hoffman.

The earlier funds were raised at low interest rates, but the third fund is an opportunistic one that comes as interest rates are rising and the economic climate is uncertain.

He said that some companies will fail or not work, but Breakthrough has a low rate of failure across its portfolio.

“We’ve closed about 15 percent of the investments we made. Many of the companies that failed were ones we founded. . .

Some of the companies that have received breakthrough investments are US-based green hydrogen electrolyser manufacturer ElectricHydrogen; Arkea Bio which is working to reduce methane emissions from livestock; green cement maker Solidia and Fleetzero which focuses on cargo shipping battery technology.

Gates, while a well-known advocate for technology in addressing climate change has long been sceptical of the use of Carbon Capture and Storage (CCS) to limit the greenhouse gasses produced by burning fossil fuels as energy.

Coal, oil and gas companies are promoting this technology as a means to operate for many decades.

Gates said that CCS would not be financially viable to use on a large scale in the future. He said that CCS was a “brute force” solution. “It’s always expensive.”

You want to reach a point where you are willing to tax emissions at marginal costs of capture, and then spend the money on capture. He said that’s how you reach zero [emissions].

He said that in most cases it is better to use a different technique than emitting carbon dioxide and paying for its capture. “If you can, try to avoid generating carbon dioxide.

The Breakthrough Funds invest in start-ups that use direct air capture, reflecting what he believes is the residual role of carbon removal technologies.

Gates stated that while oil and gas producing nations such as Saudi Arabia had pushed to include the capture of carbon dioxide emissions as a factor for global climate agreements, “They don’t do any CCS [at a scale], they aren’t funding the companies who work on CCS.”

The world will miss its short-term targets to reduce greenhouse gases by half by 2030 in order to limit global warming at 1.5C from pre-industrial times. He said that innovative companies were needed to tackle the challenge of reducing emissions in sectors as diverse as steel and cement.