Gigascale, a venture firm led by former Meta CTO Mike Schropfer, announced Monday that it has raised $250 million in funding to help founders “reimagine the physical economy.”
The new fund will focus on energy, grid infrastructure and critical minerals from a climate technology perspective. By remaining openly focused on climate change, Gigascale is countering conventional wisdom exacerbated by the theory of “climate technology.”
Gigascale's second fund is shaping up to be a continuation of the kind of bets Schlepp has made in the three years since he founded Gigascale. The company has backed high-profile startups in the climate technology space, including Commonwealth Fusion Systems, Heron Power, Mill, and Form Energy.
Gigascale was born out of Schlepp's research into climate change technologies during the coronavirus pandemic, and the new fund will be the first to focus on early-stage investments that include institutional investors.
Climate change technology has always been a broad field, and our gigascale portfolio reflects that. But in recent years, the sector has increasingly focused on energy and infrastructure, a change largely driven by the demand for AI.
It is therefore no surprise that power is a key focus of the new fund. Due to the increased demand for electricity, there is an opportunity to invest in new sources of energy and new ways of delivering it to businesses and homes.
Schropfer cited solar power as a recent example of a clean technology that is gaining market access because it is faster and cheaper.
While solar power and batteries have dominated conversations about clean power, Schropfer clearly believes there are further opportunities. Broader trends in AI and electrification are making it difficult for businesses to connect to the power grid. In response, many companies are seeking to develop their own power sources, but even there competition is fierce. For example, waiting lists for natural gas turbines extend into the early 2030s.
Power shortages present opportunities for energy startups. Schropfer said on the Inevitable podcast last year that in energy-intensive industries, bringing in power “over time is going to become a competitive advantage.” Startups that can provide electricity more cheaply, more flexibly, or both may win on that merit alone.
But Gigascale also expects energy investments to expand beyond power generation, citing grid infrastructure, critical minerals, and physical AI as other places the company will look for opportunities.
“The companies we support win because they are cheaper, faster and more reliable,” Schropfer said in a statement. “That's how adoption grows. The climate impact is a result of improved system performance.”
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