Earlier this month, Climactic, a New York City and San Francisco, Calif.-based venture capital firm, launched with a $65M inaugural fund. In conjunction with the announcement, Raj Kapoor and Josh Felser replied to our questions about the firm, their strategy, what they like to see in founders and introduced their portfolio companies.
VCWire: Hi Raj, Hi Josh, can you please tell us a bit more about you? What’s your background?
Raj: I was a Mechanical Engineering graduate from CMU with a focus on robotics – in the early days of self-driving cars. I ventured to Silicon Valley and fell in love with entrepreneurship, then became an obsessed repeat founder/CEO. I co-founded Snapfish (acquired by HP for $300M) before co-founding Fitmob, a fitness marketplace acquired by Classpass and subsequently, Mindbody. I was an MD at Mayfield, and also the first investor in Lyft, where I eventually joined as Chief Strategy Officer, planning the company’s future transition to an electric, self-driving shared fleet.
Josh: Throughout my career, I’ve played a vital role in the ‘digitization of everything’ as the founder in the late 90’s of one of the first internet music companies, Spinner.com (acquired by AOL for $320M). I later founded Crackle, a video platform acquired by Sony for $65 million. I also founded Freestyle, an early-stage tech venture capital firm, facilitating investments in unicorns like Airtable, Intercom, Patreon, Betterup, and Intercom.
VCWire: Can you introduce the firm?
Josh: Climactic is a software-first climate fund focused on early-stage companies that are helping enterprise and mobility companies achieve their net zero goals. Our biggest lever in this crisis is getting the top 50 companies and their supply chains to net zero. We are funding the founders and the innovative tech to get them there.
We’ve already invested in multiple software-first companies with a core focus on enterprise and mobility. Our earliest investments include Arrive Recommerce, Climate AI, Lightship, Mootral, Muonspace, NCX, Nori, Populous, Renoster, Rubi, Sinai, and Weavegrid.
We act as a bridge and accelerator to bring the global reach, scale, and impact of general tech to climate tech.
VCWire: Which is your overall strategy (geo/amount/sectors)?
Raj: Our goal is to help reverse climate change, and we believe we can best do that through the decarbonization of businesses. Our fund invests in software-first climate tech startups that have the potential to make significant contributions to the decarbonization of key sectors like enterprise and mobility, aiding in the global push towards net zero emissions.
To get to net zero, we must decarbonize the supply chains of at least the top 50 companies in the world – but to do this successfully, they’ll need software and software-first services – especially AI-based – and this is precisely where we see an opportunity to make the biggest impact.
Our seed investments are focused on North America and we also play in Europe and Australia selectively and range from $1-3M in capital, allowing us to be there for founders when they need us most, at the early stages of their companies.
VCWire: Beyond capital, how do you support startups?
Josh: Climactic is built to be an extension of our founders’ management teams. As repeat founders and investors, (who have worked with over 100 founders and have 40 + years of collective experience) we’ve scaled companies with multiple high-profile exits under our belts, and bring an unparalleled breadth of experience to help them scale and navigate through some of the toughest challenges they’ll face.
VCWire: What do you like to see in founders?….And what don’t you like to see in them? I mean, is there something which impresses you at a first glance?
Raj: We look for founders who have deep insight into their opportunity, a strong desire to be the best in their craft, the ability to execute rapidly, and a sense of self-awareness and humility enabling them to listen and bring in help. We know that founders don’t simply see their companies as a business opportunity but as their personal mission to have an impact on our climate crisis.
VCWire: Please, tell us a bit more about the portfolio. You can list five startups that have made you particularly proud of.
Josh: Lightship is a 100% electric recreational vehicle created by an experienced team from Tesla/Proterra. They’ve designed and produced an aerodynamic, battery-powered trailer that liberates travelers from the noise, emissions, and range anxiety of a gas RV. They[‘ve (Should just read ‘They’ve) also used software to re-invent the experience and usability of the RV as Tesla has famously done with autos.
Climate.ai is the leader in climate resilience and adaptation and is being used by seven different industries. They combine AI, advanced machine learning that is used in prediction for self-driving cars, and data points to build end-to-end climate resilience for enterprises, from research and development to operations and supply chains.
WeaveGrid works with utilities and owners of electric vehicles (EVs) to enable, speed up and reduce the grid impact of transportation electrification. The company’s software platform helps load balance and optimize EVs on the grid to save utility customers money on their bills.
Arrive Recommerce is reimagining e-commerce circularity for tomorrow’s world. They partner with retailers and brands to provide a seamless return to e-commerce supply chains that keep products out of landfills and create a new revenue stream for their customers.
Populus.ai has created a platform designed for the future of mobility. They manage, track, and in some cases take payment for the use of commercial fleets (deliveries, scooters, bikes) in over 50 cities around the world — and enable use and parking-based incentives to move these fleets to electrification.
VCWire: Which sector/s would you bet 2 cents in the next five years?
Raj: We’re betting on AI software companies that sit at the center of mobility and enterprise decarbonization. We recognize that businesses are the key to solving our climate crisis as over 8,000 companies have pledged net zero which is now over 90% of worldwide GDP. But in order to do this successfully, they’ll need very smart software that can make change happen with limited data – and this is precisely where we see AI making an impact.