(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.
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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.
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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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