Houston—The energy industry is still reeling from low oil prices but Alexander Rozenfeld is placing a bet that this is the right time to back innovative ideas in the sector.
Rozenfeld left his position as president of Shell Technology Venture to form his own venture firm, Climate Impact Capital. The past several years have not been kind to venture investors in cleantech and energy, as well as food, water, and other environmentally focused segments. Still, Rozenfeld says he believes that taking a longer-term approach to cleantech investing will prove to be successful.
“We’ve been talking about this for a long time, but nothing’s happening,” he says of society. “Really there may be only a decade before all of the economic impact issues become completely irreversible.”
It’s that economic argument—the belief that pursuing innovation that can tackle climate change is good business—that Rozenfeld says is key. “This is not just about doing good, though that is important.
“The boundary has been crossed to reach the financial community,” he adds. “Portfolios are at risk and we have a fiduciary duty to talk about this.”
Rozenfeld points out that others are seeing similar opportunities. For example, he points to the Breakthrough Energy Coalition, an effort to boost energy innovation led by Microsoft founder Bill Gates and Virgin Group founder Richard Branson, among others.
Climate Impact Capital is still just getting started. When I spoke to Rozenfeld last week, he had just moved into his new office and said he’s looking to hire a team and is also pursuing limited partners. His plan is to raise a $30 million fund with the goal of six to eight investments over a two-year period. He expects his investors to be large foundations and family offices, perhaps with a corporate strategic group added to the mix.
Rozenfeld says he envisions a fund that takes more of a longterm approach to investing in companies, as opposed to the more shortlived timeframes in cleantech so far. “The idea is for investors to maintain shares in the company throughout [its] lifetime,” he says. “We stay with the company and keep pushing them to create great products, even when it becomes public. That’s the way to create impact.”
To find those opportunities, Rozenfeld says he will use software to provide guidance, via data and systems analyses. “One of the most valuable parts of that is the act of bringing key stakeholders together around understanding fundamental problems and mapping them out,” he says.
Rozenfeld worked in the corporate energy world for two decades, and it’s a world he knows from his childhood; his father worked in the oil business and took the family around the world. “I’ve seen the negative consequences of energy development in developing countries,” he says. “I have an appreciation for the scale of the problems and the need for solutions.”
Those experiences fueled an interest in energy policy, which he studied at Princeton University. He received degrees in public policy and engineering from that institution, and also earned an MBA from MIT.
“I certainly am not starting this firm in the hopes of becoming a mega-millionaire venture capitalist,” he says. “The way to do that is to go into late-stage investments and raise a very large fund. This is more about creating something that will make value for investors, for companies, and have a significant positive impact in terms of the world.”