Seattle-based venture firm Stepchange announced that it closed its first fund, raising $7 million to invest in climate-focused startups.
The fund is targeting four sectors: consumer and commercial transportation; the built environment; energy generation and the electrical grid; and climate adaptation and resilience.
Stepchange focuses on software innovation rather than capital-intensive devices and hardware. It supports low-carbon solutions that are cost-competitive with polluting alternatives.
“Fundamentally, we’re looking at asset-light companies and things that have immediate commercial pull in the market,” said Anay Shah, Stepchange co-founder and general partner. “So it’s technologies that don’t require government incentives. They don’t require folks to pay a green premium, as it’s known. We’re looking at better, faster, cheaper.”
Stepchange has already backed 13 startups and plans to make 30 total investments out of its inaugural fund.
Rising interest
Ben Eidelson, a Seattle tech vet who sold startups to Google and Stripe, was the sole general partner when he announced Stepchange’s launch in January 2024 with nearly $3 million and four investments.
Since then, the fund has more than doubled, and the firm has expanded its roster of limited partners, nearly tripling the number of investors to more than 85. Bain Capital Ventures is an anchor investor, and tech leaders from Microsoft, Google, Amazon, Remitly, Palantir, Zillow, and others are among the LPs, along with energy and sustainability industry experts.
Stepchange has also increased the size of checks being written, aiming for a maximum of $250,000.
It’s an unpredictable time for climate innovation and deployment. Global funding dropped to $30.9 billion last year, down from $51.5 billion in 2023, according to CB Insights. And the Trump administration has canceled and clawed back federal support for clean energy research and projects, and announced plans to challenge state climate policies.
Yet investors and private equity firms put $5 billion into U.S. climate companies in the first quarter of 2025 — an increase of 65% compared to the same period last year, according to PitchBook data cited by Bloomberg. And the Republican party has shown support for select clean technologies including nuclear fission and fusion power and geothermal energy.
New podcast, new investments
Shah, who is based in Los Angeles, was an early employee of Seattle-based Remitly, a digital payments company serving immigrants, and most recently senior vice president for Global Business at fintech company Tala.
“We have built, scaled and sold software-oriented companies,” Shah said, “and that’s where we find our confidence to be able to have a differentiated advantage.”
Eidelson and Shah recently launched a Stepchange podcast, which it pitches as “‘Acquired’ for infrastructure and climate folks” — referencing the highly popular tech and entrepreneur podcast. Eidelson also hosts a second podcast, called Climate Papa.
Some of the Stepchange’s recent investments include:
- Nevoya, a trucking company with zero emissions vehicles that optimizes short-haul logistics
- CapeZero, a platform supporting investments into utility-scale renewable power projects
- Audette, providing analysis to aid in the decarbonization of commercial real estate
- Futureproof, offering home insurance that takes into account the resiliency of structures
“We have a lot of the tools that we need now to reduce most of humanity’s [greenhouse gas] emissions and adapt to climate change, but we’re just not deploying them fast enough,” Eidelson said. “We continue to see software and fintech as the largest lever to actually go faster.”
‘I want to do more’
Stepchange’s leaders are hopeful that the companies they fund will succeed despite political headwinds, as their products are cost-competitive regardless of climate benefits.
Investors are eager to support these businesses, Eidelson and Shah said, offering financial backing as well as expertise and advising. They noted that climate tech 1.0 gained traction during the first Trump administration, partly in response to policies opposing the sector.
“I’ve seen a lot of LPs very frustrated with what feels like backwards federal progress, [who are] saying, ‘I want to do more,’” Eidelson said. “So I’m very excited by the new people have joined us.”
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