California incubator aims to raise $30M to back climate startups

A prominent startup incubator working to accelerate clean energy technologies in California and nationwide has announced plans for a second, larger impact fund. The news coincides with a particularly turbulent week for the U.S. clean energy industry following the collapse of Silicon Valley Bank.

On Tuesday, Los Angeles Cleantech Incubator (LACI) launched the new impact fund, which is expected to raise $30 million and includes former California Governor Arnold Schwarzenegger among its first investors. To start, the fund will back two female-founded startups: Repurpose, a sustainable tableware startup, and ChargerHelp, which is building an on-demand repair service for electric-vehicle charging stations.

“We’re quite confident that our [investment] pipeline can scale, especially with how strong climatetech continues to perform compared to other venture-backed startups,” Matt Petersen, CEO of LACI, told Canary Media.

LACI launched its first impact fund in 2019, investing $5 million in 17 Los Angeles–based startups that are developing everything from electric planes, cargo bikes and shuttle buses to next-generation lithium-ion batteries and countertop food-scrap recyclers. Last year, the incubator started a $6 million debt fund to help underrepresented founders, including women and people of color, access loans. All told, LACI says it’s supported 375 startups over the last decade.

Startup accelerators and incubators like LACI say they can do more than help new companies secure funding. They can also help to open doors and expand access for female founders and entrepreneurs of color in particular — all of whom are vastly underrepresented in climatetech and the tech sector in general.

LACI said that of the 17 startups backed by its first impact fund, 29 percent are led by a female founder, and 24 percent are led by a Black or brown founder. Among the 13 companies receiving initial loans from LACI’s debt fund, about one-third are companies that have women founders or co-founders, while 83 percent of companies’ founders or co-founders identify as Black or Latinx.

Those figures are a stark departure from the larger venture-capital community, which is seemingly retrenching from its earlier commitments to diversity and inclusion.

Last year, U.S. startups with all-women teams received 1.9 percent of venture capital allocated — a drop from the 2.4 percent they raised in 2021, according to PitchBook. Black startup founders raised about 1 percent in venture capital allocated last year, down from 1.3 percent in 2021.

In the fallout of Silicon Valley Bank’s failure, some observers say they worry that underrepresented climate founders will feel further kept out from investment opportunities because, as one financial expert told Pitchbook, ​“when the economy tanks, discrimination feels justified.”

“People are falling back on what they know, which is bigger outfits and white- or male-run companies,” said Kerry Bowie, founder of Browning the Green Space, a Boston-based environmental justice nonprofit.

Bowie’s organization recently co-founded the Advancing Climatetech and Clean Energy Leaders Program (ACCEL) with Greentown Labs as part of the groups’ efforts to more deliberately support founders from diverse backgrounds.

“It’s not just, ​‘If we build it, they will come,’ especially for entrepreneurs of color and women,” Bowie said. ​“You’ve got to be inviting; you’ve got to let people know that they are welcome. ACCEL was our pilot to do that in a more formal way.”

Kameale Terry, CEO of ChargerHelp, said the Los Angeles Cleantech Incubator’s early financial and networking support was crucial in helping her and Evette Ellis, two Black women, to launch their company.

Terry initially joined LACI in 2020 after quitting her job at EV Connect, a charging-station software vendor. At the incubator, she began developing a curriculum to teach people how to repair EV chargers and met Ellis, who is now the company’s chief workforce officer. Three years later, ChargerHelp has raised over $25 million in total capital, including an undisclosed amount from LACI’s second impact fund.

The company now has 50 employees, including field technicians working in 17 states. It’s also helped to train nearly 1,000 people on how to maintain and service EV charging stations and connect trainees with jobs in the industry.

“For a Black female founder, that’s a really big deal,” Terry said of the funding.