Earlier this morning, we announced our third flagship fund, Congruent Ventures III (Fund III), which continues to focus on early stage investing in climate and sustainability solutions across North America. This fresh $275M vehicle will continue to back early stage climate entrepreneurs focused on the biggest opportunities. We lead two thirds of our initial investments and are the first institutional investment in 80% of our companies. Fund III allows us to continue our core mission of investing in climate tech companies while delivering best in class venture returns to our investors.
When we started Congruent in 2016, raising an early stage climate fund was an exercise familiar to the founders we back: constant rejection. We were raising an institutional seed fund focused on the most “risk on” stage of a sector that had been returns-challenged in the prior years. With the close of Fund III, we have crested $1B in AUM. We are proud of what we’ve built (and what our portfolio has accomplished) but most of all we are optimistic that the LP investor community is eager to deploy capital to address our climate challenges. With great climate challenges comes great opportunity.
Much to our excitement, we were 3x oversubscribed with $600M of LP interest on a $200M target size, exceeding this target in less than five months and hitting $275M of total commitments in a first and only close. While institutional investors are not homogeneous, it is universally the case that it is easier to back seasoned investor teams, and as Congruent has grown, the portfolio has matured, and our team has grown to include 12 of the most talented and diverse in the space. We are grateful for the success in the face of a challenged venture environment, aptly shown by a Pitchbook analysis.
Why not take more?
One of our favorite inside-venture quotes is attributed to Mike Maples: “Your fund size is your strategy.” If we allowed our fund to bloat much beyond the $275M, we believe there would be pressure to move to large Series A’s and Series B’s as entry points given portfolio construction. We love supporting the earliest stage entrepreneurs from inception, and the size of Fund III allows us to continue to do so with even more depth. We are fortunate to be able to continue to support to our growing early stage portfolio through our Continuity Fund, announced in April of this year which allows us to invest in later stage rounds in our breakout companies.
With 53 companies in the portfolio, 12 team members, and $1B in AUM, we are delighted to redouble our efforts around our core mission: backing early stage climate entrepreneurs and delivering best in class returns to our investors.
The full press release can be found here, and we are grateful for the support of all of our LPs including the California State Teachers’ Retirement System, the Grantham Foundation, the University of California, Sobrato Capital, Strategic Investment Group, clients advised by Cambridge Associates and new investors including Northwestern University and Vintage Investment Partners in addition to multiple institutions representing some of the largest endowments, pensions, sovereign wealth funds, and foundations in the world.
If you’re looking for your first (or occasionally second) institutional round, come find us!