“Move fast and scale things.”
That could be the motto for the newly launched All Aboard Coalition, which is looking to mobilize $300 million or more to co-invest alongside some of the top climate tech venture capital firms in innovative startups building their first commercial plants.
The venture capital collaborative, made up of Breakthrough Energy Ventures, Khosla Ventures and a dozen other climate tech VCs, aims to make sure the companies they back have the capital they need to make the tricky leap from promising technology to commercial success. The vision: A new crop of multibillion-dollar climate unicorns able to cut carbon emissions by the gigatons.
The ambition of the All Aboard Coalition presents a stark contrast to the funding cuts, policy reversals and hostility toward climate action that has marked the Trump administration. The venture coalition is the most prominent example of the initiatives beginning to take shape as investors and other stakeholders look to shore up finance for climate projects and startups in the face of political and economic headwinds.
“We need a few people to join forces and be bold together, and the returns that we’ll get from that will be remarkable,” All Aboard cofounder Chris Anderson, the investor and former TED curator who organized the coalition, tells ImpactAlpha. “It’s an index fund for what are going to turn out to be the world’s most exciting companies.”
The Who’s Who of climate tech investors, Anderson says, represents what he calls a “hive mind” that can identify the most promising companies, accelerate their fundraising at a key stage of development and signal the opportunity to a broader range of investors.
Anderson expects to close the $300 million fund by the end of October and make the first co-investments before the end of the year. The fund will have the ability to co-invest alongside All Aboard members, which also includes Ara Partners, Clean Energy Ventures, Congruent Ventures, DCVC, Energy Impact Partners, Future Ventures, Gigascale Capital, NGP Energy Capital Management, Obvious Ventures, Prelude Ventures, Spring Lane Capital and S2G Investments. If three All Aboard members create a syndicate to back a climate tech startup building its first or second plant, the All Aboard fund will automatically kick in with matching funds.
“We have some incredible investors who are excited by it and want to put in real money,” Anderson said. If the fund, which Anderson calls a “proof of concept” fund, is successful, he envisions an immediate larger follow-on fund. “We want to catalyze the funding of many dozens of the best clean-tech companies,” he said.
The Trump administration has effectively dismantled the sweeping incentives designed by the Biden administration to accelerate the energy transition and rebuild domestic supply chains for key clean technologies. That has scrambled the plans and funding for many climate tech projects and startups.
“The challenges of the energy transition are too large for any single firm to solve,” says Aaron Rudberg of S2G Investments, the investment firm spun out of Lukas Walton’s Builders Vision. “By aligning check size, risk structures, and expertise, we can help ensure that growth-stage companies have the funding they need to grow into the next generation of energy market leaders.”
“We see the All Aboard Coalition as a blueprint for how investors can work together.”
FOAK financing
Similar conversations are also taking place to maintain momentum for community-scale green projects across the country in the face of attacks from Trump’s Environmental Protection Agency on the Greenhouse Gas Reduction Fund, the $27 billion “green bank” program. Stakeholders are looking for ways to salvage the pipeline of community solar, electric bus fleet, and building energy retrofit projects.
Also last week, a group of solar power companies and advocates including Pivot Energy, Solar United Neighbors and Sunrun launched Common Charge to advocate for affordable, reliable clean power.
The All Aboard Coalition is looking at a broad swath of technologies that still carry a risk (and price) premium, from zero-carbon geothermal and nuclear energy to long-duration energy storage, carbon capture and marine decarbonization.
The co-investment approach is intended to meet a longtime challenge for climate tech companies: building their first or second commercial plant for what is often a brand new technology. First-of-kind deployments — or FOAKs, in industry parlance — typically require more capital than VC investors generally provide. Such projects often are considered too risky for banks and other commercial or growth investors. Financing a new plant also entails a more complex capital stack that may include debt and project finance.
“Collaboration,” says Anderson, “is the way to solve it.”
The Department of Energy’s Loan Programs Office, in particular, had stepped up to address the funding gap for climate tech startups that had proven their technology and were ready to build their first pilot or commercial plants. Many of those loans have been paused or revoked under the Trump administration.
“When you’re doing something disruptive and something completely new, you start in the lab, you go to the pilot, then you go to demo, then you build the first commercial. You go to a bank and they literally laugh at you,”Jennifer Holmgren of carbon recycling company LanzaTech explained at a DOE conference last fall. “Your risk premium of building something disruptive is not a risk they can take.”
Such financing rounds typically require $100 million or more. By matching rounds financed by members, who might put up half the capital needed, All Aboard is looking to help those startups make the leap.
Social proof of success
By speeding commercialization, All Aboard also hopes to help bring down the price, or “green premium,” for promising climate tech. All Aboard member Vinod Khosla of Khosla Ventures says startups must achieve what he calls “Chindia” pricing to compete with the low-cost technology coming out of China and India.
“There’s no point in having a new startup that can’t beat that pricing, because it will never really scale,” says Anderson.
“The question is, are there business models there that can scale without relying on a green premium? In many of these parts of the economy, the ability to beat those prices is there with disruptive carbon-zero solutions. What they need to get to that competitive pricing is scale.”
All Aboard will hold a demo day in Half Moon Bay, Calif., this month for 20 climate tech startups to pitch to All Aboard’s VC members, which collectively manage more than $60 billion in assets.
“You need to create momentum around these companies,” says Jason Scott of Spring Lane Capital, an All Aboard coalition member and the board chair of family office network CREO. He points to industries like biotech or AI where the market has anointed clear winners and showered them with the capital they need to be successful.
“Part of the idea is, if the All Aboard network says this is a good investment, then all of a sudden, the GICs (the Singapore sovereign wealth fund) and CalSTRS and other institutional investors will say, ‘Oh, I should take this seriously when they come to me for their $300 or $500 million round. Or the bank should take them seriously when they want debt to build their first facility,” Scott says.
“There’s a really interesting systemic thesis around how you move more money in, which is around the social proof of success.”
Collaborative effort
Anderson has for several years personally invested in climate tech startups, through funds such as Exascale, a London-based early stage investor, and marine decarbonization-focused fund Ocean Zero. Like other climate tech investors, Anderson warned of the startups’ “Valley of Death,” as they struggle to raise funding for their first and second plants.
Anderson teamed up with Stan Miranda, the cofounder of Partners Capital, an outsourced investment office. Miranda also runs the True North Institute, a think tank for institutional investing that in May published 18 case studies of FOAK financing that underscored the need for collaborative investor syndicates to scale clean technologies in sectors such as hydrogen, batteries, geothermal, and carbon capture.
“Capital is being spread too thinly across companies in these sectors, and concentrating more capital on fewer companies could see greater success in the critical technologies,” the report found.
Anderson and Miranda hatched the idea for All Aboard last fall, at a convening they held to match investors with promising climate tech companies looking to scale. The initiative was announced last week and members are meeting today virtually to hash out final details.
“Short of very large amounts of concessionary capital or government money, it was going to be very hard to close this gap,” said Scott of Spring Lane Capital. “After it became clear that no one else was going to fill this gap in the near term, Chris and Stan came up with this idea of the All Aboard Fund.”
He said the coalition heralds a new level of collaboration among investors that have often worked together informally.
“We are, in the past couple months, seeing a lot more collaboration than we’ve seen in a very long time between people who provide multiple types of capital to companies,” Scott says. “I think this will facilitate more collaboration around that type of co-investing.”
