Bill Gates, Jeff Bezos launch $1 billion clean energy investment fund
Billionaire philanthropist and Microsoft founder Bill Gates is leading a $1 billion venture fund to combat climate change by investing in clean energy innovation.
Some of the world’s wealthiest business leaders, including Alibaba Executive Chairman Jack Ma and Amazon CEO Jeff Bezos, will sit on the board of the new fund, known as Breakthrough Energy Ventures (BEV). The BEV fund aims to invest in the commercialization of new technologies that will reduce greenhouse gas emissions in areas including electricity generation, electricity storage, energy efficiency, transportation, industrial processes, and agriculture.
“I am honored to work along with these investors to build on the powerful foundation of public investment in basic research,” Gates said in a statement. “Our goal is to build companies that will help deliver the next generation of reliable, affordable, and emissions-free energy to the world.”
The announcement follows the creation last year of the Breakthrough Energy Coalition, a group of wealthy individuals including Gates and many BEV investors who pledged to move a large portion of their wealth toward clean energy technology.
Gates has personally backed a number of innovative energy startups, including the advanced nuclear tech company TerraPower, and has encouraged other wealthy individuals to do the same. He was involved last year in the Mission Innovation initiative, a pledge by 22 countries and the European Union to double investments in clean energy research over five years.
Gates admitted in an interview with Quartz that venture capital (VC) investment in clean energy technology is a tricky sell. According to a recent working paper published by MIT, VC firms invested over $25 billion funding clean energy technology startups from 2006 to 2011 and lost over half that. As a result, investments in the clean energy sector have virtually dried up. Gates attributed this trend to market failure, with VC firms largely investing in small-scale projects expecting short-term results.
“People think you can just put $50 million in and wait two years and then you know what you got. In this energy space, that’s not true at all,” he said. Other BEV backers say that, unlike past VC investments in clean energy, the 20-year lifespan of the BEV ensures investments will specialize in large-scale projects, where investors are more likely to see results.
“Being a 20-year fund with patient capital that’s not needing short-term gains allows us to have a longer-term outlook as well as fund technologies that don’t fit into the traditional VC model as it exists today,” said former energy fund manager John Arnold. “As an investor led effort, Breakthrough Energy Ventures is designed as a source of patient capital to spur innovation to meet the growing demand for low-cost, clean energy solutions.”
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