Giant Ventures raises $250m for new impact funds

Impact VC firm Giant Ventures has raised $250 million for two funds, according to an announcement.

Giant Ventures was established in 2019 by former start-up founders Cameron McLain and Tommy Stadlen to invest along the themes of climate, health and inclusive capitalism. Its first two funds raised $50 million apiece for seed and growth investments, and have so far generated top quartile returns, Stadlen told New Private Markets.

The firm has now announced two new products, which began fundraising in 2023: A $100 million seed fund and a $150 million climate growth fund focused on companies at the series B stage. The series B fund can invest in companies that began in the seed fund as well as new companies.

Despite a broader pullback in fundraising, mission-focused VC funds continue to find a strong appetite among investors. In the first eight months of 2023, 37 VC funds focused on climate tech raised $13 billion, according to a CTVC report published in early September. For its part, Giant has certainly found LP demand: the seed fund has reached a final close, while the climate growth fund has passed its fundraising target, with a close expected later this quarter.

The new growth fund is Giant’s first to have a specific climate focus. Explaining the decision, Stadlen told New Private Markets: “We think there is a major series B funding gap. There is a chasm between the abundant early-stage capital available for climate start-ups and the huge wall of capital available pre IPO from the likes of General Atlantic BeyondNetZero, TPG and Brookfield. But what we saw missing was a go-to series B venture firm for really ambitious, top climate founders. That space is up for grabs.”

The seed fund has already made eight investments, while the growth fund has made two. On the firm’s investment activity, Stadlen said: “We’ve gone very deep on home electrification. We’ve backed four or five different marketplaces connecting either homeowners or businesses with some form of climate tech installation. We’re also interested on the greening of the financial markets as well as carbon marketplaces. The first investment from the climate growth fund is a company called Agreena, a soil carbon marketplace which allows farm owners to verify carbon credits when they adopt regenerative agricultural practices, which turns large farms into huge carbon sinks.”

Giant’s institutional LPs include BMW, Henkel, RIT Capital Partners, Stepstone, Denmark’s sovereign investment fund, and The Nature Conservancy. Individual backers include Sir Richard Branson, the founders of Booking.com, Unity, and SoFi, as well as current and former CEOs and board members of Rolls Royce, Goldman Sachs, Intel, bp, Johnson & Johnson, Standard Chartered, McKinsey and GSK.