Convective Capital, an early-stage venture fund led by Bill Clerico, has announced the successful close of its second fund, Fund II, raising $85 million dedicated to investments in disaster resilience. The announcement, made by Clerico, highlights a critical need as "the world is getting warmer while our infrastructure gets older: a recipe for disasters." This new fund follows their initial $35 million fund raised in 2022.
The new $85 million fund expands Convective Capital's investment mandate beyond its initial focus on wildfire technology to encompass a broader thesis of providing "risk management in the physical world." Bill Clerico emphasized the scale of the problem, stating, "There’s $60 trillion of real estate at high risk from disasters, the U.S. spends a trillion dollars a year mitigating and recovering from disasters, we need a new approach to this." The firm aims to back innovative companies addressing the increasing frequency and intensity of natural disasters.
Convective Capital's first fund demonstrated strong performance, with 79% of its portfolio companies successfully progressing from seed to Series A funding, significantly exceeding industry benchmarks. These companies have collectively generated $100 million in revenue and are valued at $2 billion. The success has also drawn interest from insurers, with Clerico noting a growing trend of insurance companies investing directly in technologies that mitigate disaster impact, partly due to startups backed by Convective, such as Stand and Delos.
The investment arrives as the global financial landscape increasingly recognizes the economic imperative of disaster resilience. Annual direct disaster costs are estimated at $202 billion, with the true cost potentially reaching $2.3 trillion when accounting for cascading and ecosystem impacts. Despite this, investment in disaster risk reduction remains critically underfunded, with less than 2% of international aid projects focusing on it. Convective Capital's Fund II aims to bridge this gap by investing in proactive solutions to protect communities and infrastructure.
