Nadine Priestley / Valo Ventures
- On Thursday, Scott Tierney, cofounder and former partner of CapitalG (formerly Google Capital), announced a new $175 million fund for his venture firm, Valo Ventures.
- Tierney, who also held senior roles in Google’s hardware and Nest divisions, started Valo Ventures in July to invest in companies tackling climate change with clean energy and reusable good technologies.
- The fund is backed by Fortum, a Finland-based energy company that is developing clean energy alternatives. Tierney told Business Insider several Valo Ventures portfolio companies have already launched pilots with Fortum.
- Visit Business Insider’s homepage for more stories.
After less than ideal returns in the early ’00s, investment in sustainable technology is having a major moment in the sun.
On Thursday, CapitalG cofounder and former partner Scott Tierney announced his firm, Valo Ventures, raised a new $175 million fund that will focus on investing in companies developing technology for clean energy and reusable goods. CapitalG was formerly known as Google Capital, the search giant’s later-stage fund, now housed under the corporate umbrella of Alphabet.
"Being at Google is like being a kid in a candy shop," Tierney told Business Insider. "They have great aspirations and mission and values for the team, but I want to have an impact in the next 20 years, so I wanted to create a new type of fund."
Tierney left his role at Nest, Google’s smart home device division, in July to start Valo Ventures with Mona ElNaggar and Julia Brady. This fund is the firm’s second, and is backed by its first major corporate limited partner, Fortum. The Finland-based energy company is focused on developing clean energy alternatives, and Tierney told Business Insider that several of Valo’s portfolio companies have already completed or been approved for pilot programs with Fortum.
"Every company I’ve admired has had a clear mission and if we could take some of the learnings from my consumer tech product experience at Google and apply that to some of the key social mega-trends that we’re interested in, we might have a greater impact," Tierney said. "We want to find out how [clean technology] can be applied proactively and aggressively in the physical world."
Tierney said he was always impressed with Google’s environmental sustainability initiatives, especially its project to ensure a close-to-zero carbon footprint for all its data centers. He credits his time at Nest and Google’s hardware division with giving him a crash course in the electricity and energy markets.
"I liked themes that have social, economic, and environmental pull," Tierney said. "These are our trends where, in the past, it was just tech trends. We’re focused on tech as an investment but adding a layer with these themes."
Tierney says that the new fund will allow Valo Ventures to write checks between $1 million and $10 million across early and growth stage rounds.
"We’re really more focused on our risk judgement, returns, management, and product and that doesn’t always correlate to a certain stage," Tierney explained.
Tierney’s fund isn’t the first to try to tackle climate change and other environmental "mega-trends," as he calls other initiatives like reducing plastic and reusable goods.
Many legacy venture firms, most notably Kleiner Perkins, made large bets on green technology like solar panels in the early 2000s with less than ideal returns. A recent Fortune report blamed Kleiner Perkins’s declining status in Silicon Valley in part to its intense focus on environmental sustainability investments that ultimately flopped.
"If anything, we want to attract more capital towards these megatrends," Tierney said when asked about getting out from under the dark cloud hanging over environmental investments.
- PITCH-DECK LIBRARY: The pitch decks that helped hot startups raise millions
- How to reset any Google Home device to its factory settings, if it’s malfunctioning or you’re planning to sell it
- Brex, the credit card for startups, raised $100 million at a $2.6 billion valuation — more than double what it was worth nine months ago