In an exciting update for our firm, Energize is proud to announce two big – and closely related – firm milestones: We’ve closed our second growth fund, and we’ve changed our name from Energize Ventures to Energize Capital. These changes position Energize as a go-to partner for climate entrepreneurs as they scale, from venture capital to growth equity and beyond. In sum: the market for climate software is growing, and we’re growing with it.
The close of our second growth fund brings Energize’s growth equity platform to $300 million in capital commitments and our firm’s total committed capital to more than $860 million. After recognizing a gap in late-stage software investors with experience in sustainability, we built our growth equity platform with the goal of providing capital and operational support to the growth-stage software companies that are crucial for scaling today’s climate solutions. Our newly-announced investment in PVcase – a software platform digitizing the explosive utility-scale solar market – is a great example of how our growth platform is supporting best-in-class climate software businesses.
And we’re not stopping there. Our shift to Energize Capital reflects our firm’s commitment to continue thinking big and growing with our space. The climate software market is here to stay, and so is Energize Capital.
When Energize was founded in 2016, the climate software market was relatively nascent. Our guiding thesis was that the transition to a sustainable economy represents a generational transfer of capital, and that it will require digital technologies to enable and accelerate scale. Seven years later, our thesis remains unchanged, but the market opportunity has outpaced even our bold expectations. We’re at the intersection of two incredible megatrends – digitization and climate – and this market has reached a new level of maturity. For example, our portfolio’s software revenue has grown from $100 million to nearly $400 million over the past three years.
Our shift to Energize Capital represents our commitment to being an enduring capital provider that can support this next level of the climate software market’s growth. As the market continues to scale amidst these significant economic tailwinds, we’re excited to grow alongside it.
Energize is celebrating the expansion of our growth equity strategy at a time when growth capital is in high demand – especially within the climate market:
- According to CTVC data, more than 2,000 early-stage (seed through Series B) climate companies received institutional funding in the last 24 months.
- If even 10% of those companies reach the growth stage, that means roughly 200 climate companies will be looking to raise growth capital in the next 24 months – but growth capital providers are in short supply.
- According to Pitchbook's NVCAVenture Monitor Q1 2023 report, the demand-supply ratio of late-stage funding is at a decade high, with just $1 of funding available for every $3.24 demanded.
Energize’s growth equity platform is designed to help fill this demand-supply gap and enable us to continue providing late-stage climate software companies with the capital and operational support they need to achieve mass market adoption. We’ve made seven investments out of our growth funds to date, including PVcase and follow-on investments in portfolio companies Sitetracker, DroneDeploy, and Aurora Solar, which is one of the most valuable climate software companies today.
By changing our name and unveiling our growth strategy, Energize is positioning our firm for future growth. As the market for climate software continues to mature and companies grow into billion-dollar valuations, we plan to evolve and grow with our entrepreneurs and the market opportunity. Looking ahead, we intend for Energize Capital to be a go-to partner for entrepreneurs as they scale and an enduring presence in the climate market.