Fintech-focused Rally Cap VC, a b2b early-stage venture capital firm with a focus on emerging markets, has ventured into the climate sector with the establishment of Rally Cap Climate, a climate tech fund.
Rally Cap Climate fund has reached its first close at $2.5 million, with expectations to secure a final close of $5 million in the near future.
Hayden Simmons, a general partner at Rally Cap VC, highlighted the firm’s strategic transition, stating, “Many of the most exciting calls we were having with founders were on the climate side,” indicating a growing interest in climate-focused initiatives within the firm.
Rally Cap Climate focuses on investing globally in software powering the New Climate Economy, particularly in pre-seed and seed stages, with a strong emphasis on b2b enterprise-grade software-centric adaptation technology.
The fund’s philosophy revolves around recognizing the mass convergence of talent and capital in the climate sector, anticipating significant opportunities for software-centric solutions in adaptation strategies.
Simmons clarified Rally Cap Climate’s investment approach, emphasizing a financials-first perspective over impact-driven initiatives. The fund prioritizes backing experienced senior executives-turned-founders whose products serve business customers, signaling a modification in the type of founders Rally Cap seeks to support.
Kyane Kassiri, partner at Rally Cap VC, emphasized the firm’s focus on its emerging market DNA, even as it ventures into climate investments.
This commitment extends to providing cross-border support to climate tech startups, including co-investment opportunities and access to emerging market ecosystems in Africa and Latin America.
Rally Cap Climate’s portfolio includes companies like Amini, Circadian, Solfium, and Eli, with a focus on software solutions for climate adaptation.
The fund’s preference for adaptation strategies aligns with the market entry ease and lower capital requirements associated with software solutions compared to hardware-intensive mitigation strategies.
In terms of investment strategy, Rally Cap Climate typically invests between $50,000 and $100,000 in its portfolio companies, offering limited partners opportunities for co-investment in select deals.
The fund aims to make 50 investments in line with its investment strategy, complementing the broader investment portfolio of Rally Cap VC.
