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.

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Rali_Cap is a two-year old VC investing in B2B and API-first fintechs at pre-seed and seed stages across target markets. By the end of June, the firm seeks to reach the second close of the fund.

Before putting forward a new fund size, signaling a strong LP appetite, the VC reached its first close of $20 million initial target last month.

The limited partners for this new $30 million fund were Breyer Capital, Propel VC, Better Tomorrow Ventures, FT Partners, Bain Capital, Lateral Capital, a few family offices, HNIs and a multibillion-dollar crossover fund also known for investing in smaller funds.

The VC firm has backed 12 African startups, 13 Latin American startups and 7 Asian startups, from across the banking-as-a-service and card issuance, open finance sectors and SME digitization platforms, such as Belvo, Mono, Minka, Stitch, Union54, Pomelo, Simetrik, Brick and Abhi. Some of Rali_cap’s LPs include executives and managers from fintechs such as Wave, Block, MercadoPago, Rappi, Flutterwave, Yoco, Visa, Plaid, Stripe and Coinbase, as well as e-commerce platforms like Jumia and Shopify. Among these LPs, some have taken part in follow-on early- and growth-stage rounds of the startups.

For this new fund, though open for exceptions, Rali_cap targets startups in large markets such as Africa — Nigeria, Egypt and South Africa; Latin America — Brazil and Mexico; and South Asia — Pakistan and Bangladesh. 

The VC invests between $200,000 and $500,000 in these startups. The firm leads pre-seed deals and takes part in seed rounds. 

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