It started with a November 2015 announcement by Microsoft co-founder Bill Gates along with Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg and more than two dozen other tech titans and billionaires. They were joining together to invest in cutting-edge technologies to help combat climate change.
“When we went into it, we didn’t know if we were going to find good companies. We didn’t know if there was an entrepreneurial environment that was going to make sense. We didn’t know if we were going to find co-investors. We thought we were going to have to basically build these companies on our own,” said Jonah Goldman, who worked with Gates on the effort.
Thirteen months later, the group announced that it had raised $1 billion for its Breakthrough Energy Ventures, a fund that targets climate tech startups in the tech-development and company-building phases.
“We were pleasantly surprised,” Goldman said.
The early success emboldened and propelled the effort. It has now evolved into the Gates-led organization called Breakthrough Energy, a nearly 100-employee, global effort with multiple programs working to support and deploy decarbonizing tech. It includes:
- The original venture fund, which has doubled to $2 billion and invested in more than 85 companies.
- Breakthrough Energy Catalyst, a program that funds companies that are ready to scale their technologies. It has raised $1.5 billion and built a partnership of corporations, governments and public agencies. In December, it issued a request for proposals for U.S. companies developing green hydrogen, sustainable aviation fuel, energy storage, and technology for capturing carbon from the air. This year it announced RFPs for the U.K. and Europe.
- Other programs including Breakthrough Energy Fellows, which supports basic research and new startups, as well as efforts promoting climate-related policy and government engagement, public outreach and in-house science.
While it was an early leader in climate tech investments, seven years later Breakthrough Energy is part of a much more crowded field. The sector has seen steady growth, with investors worldwide last year committing more than $900 billion to decarbonization companies, according to BloombergNEF.
Breakthrough Energy is unusual for its network of initiatives that are trying to bolster the weak links in the pathway from the bench-top research to commercialized solutions that can remove half-a-gigaton of carbon from the atmosphere each year, either through cleaner industrial and energy producing processes or outright carbon capture.
GeekWire recently caught up with Goldman, now managing director of Breakthrough Energy, as the organization’s Seattle team was moving into new offices in the Fremont neighborhood — located roughly across Lake Union from the Bill & Melinda Gates Foundation headquarters.
The conversation also coincided with the launch of “Solving for Zero,” a documentary and 10-part series based on Gates’ 2021 climate book. The series premiered April 8 on the educational platform Wondrium.
Here are highlights of our interview, edited for length and clarity.
GeekWire: What is Breakthrough Energy’s strategy for commercializing ground-breaking, expensive climate tech?
Goldman: We’re focused on what these technologies need to get to the next stage. Sometimes that’s permanent help. Sometimes that’s more specific policy engagement, so it’s clean product standards, it’s procurement policy, it’s corporate policy.
What we’re doing is putting the apparatus around this investment activity to say we understand that none of these [costly climate technologies] are going to be commercialized through a natural market cycle. So let’s figure out how we move those things in the right direction. And so that’s what the [Breakthrough Energy] network is.
Ideally, if we’re successful, which we feel good about but we’re still at the very early stages and we certainly know that we could fail, but what we hopefully are doing is bringing together all of the actors — the corporate actors, industrial actors, investors, governments, policymakers — to say everybody’s in the room who needs to make this decision. Let’s try to make the decision quicker, better. So that’s what we’re hoping to do.
GW: I had guessed that this would be modeled after the global-health focused Bill & Melinda Gates Foundation. But this is totally different. This evolved organically in a whole other way?
Goldman: A whole other way. I worked at the foundation. There’s a fundamental difference between the many problems they’re trying to solve, and the problems we’re trying to solve. And mostly, that’s a market question.
The foundation deals with market imperfections, because there’s never going to be a market for the products that people in poor countries need in order solve malaria or [other neglected] diseases. So a permanent subsidy needs to happen, a permanent apparatus of foreign assistance, overseas development assistance.
What we’re looking for is the transition to a new way to build the economy. The foundation, the whole development community, has this goal of 0.7% GDP from rich nations being transferred through overseas development systems, that amounts to somewhere in the $30-billion-a-year realm. And the foundation gives about $5-$6 billion a year. So it’s a meaningful part of that $30 billion a year.
The energy economy is at least $5 trillion a year. There is no amount of government or philanthropic assets that’s going to reach that. The only solutions are market-based solutions. And so you need to participate in that environment. The way that we can have an outsized leverage for relatively low capital — even though we have raised billions of dollars, it’s a tiny drop in that bucket — is if we’re able to model the way that these markets can be successful. It has to be a different approach than the foundation.
GW: How do you have accountability?
Goldman: There’s accountability that’s relevant to each of those different [programs]. For example, our fellows have quarterly responsibilities, mostly technical milestones. For our projects, we’re focused on “green premium” reductions and catalyzed emissions reduction. That has a lot to do with whether or not those projects are successful from a commercial perspective.
The one thing that’s the hardest to measure is policy. We can actually measure based on the particular things that we’re looking for. For example, we were very involved in advocating for the [U.S.] infrastructure bill. If you look at the infrastructure bill, there’s about $40 billion toward demonstrations at a commercial scale of the technologies that we’re particularly focused on, things our grantees and our coalition partners put a lot of resources to, and it got done.
Our advocacy success is really going to be told in the next chapters, whether or not we’re creating this policy-enabling environment for these technologies to succeed. Before we got to even [creating] catalyst and fellows, we were measuring our advocacy success by the amount of money that was invested in R&D from the governments that we were targeting our advocacy on.
GW: How do you work in this space with the tremendous urgency to move quickly, but still deliberately, in order to prevent the most devastating climate outcomes?
Goldman: There are things that we can do right now that we need to do. The thing that gets most frustrating to me is what people think of as “immediate action,” like deploying technologies that are ready. And then they’re like, “Oh, we’ll get to these other things later.” And that is a fundamental misunderstanding of how innovation works.
Innovation only works when you pay attention to it, and these things take a long, long time to happen. One of the most immediate things we can do is pay attention to the things we don’t have, and put them on a pathway to accelerate them. That does not at all take away from the urgency.
We have relatively pathetic levels of renewable energy in the world. We could do much, much better and we should do much better there. We should transition things like our personal mobility fleet to EVs and making cities easier to bike around.
But we also need to figure out [less carbon-intensive ways to make] cement and steel, and we need to figure out how we can capture carbon from the air in an efficient and cost-effective way. And we’re nowhere near those things — but we’re closer than we were five years ago. I’m telling you, I’m really hopeful. I was on a call this morning with six entrepreneurs who are doing amazing things in hydrogen and storage.
So I believe we can do it because there are way, way smarter people than I am who are focused all of their time on this stuff. But we need to give them what they need to move to the next stage.