The San Francisco-based green infrastructure investment firm Generate Capital has raised nearly $2 billion during a funding round that comes as infrastructure projects related to clean energy are seeing a boom. Generate Capital operates, finances, and builds sustainability projects.
Scott Jacobs, CEO of Generate Capital, said, “We have had great success attracting institutional investors because this is a very compelling investment return profile relative to the risk undertaken.”
The $2 billion in fresh funding follows $1 billion that the company raised in February, bringing Generate Capital’s balance sheet to nearly $10 billion. Some of the clean emissions firm’s funding includes backers from Sweden, the U.K., and Australia.
Generate Capital was founded in 2014 amid two then -up-and-coming investment trends that focused on infrastructure and clean energy. The firm has the operational know-how and capital expertise to bring to the table and has financed, built, and managed more than 2,000 projects for companies, schools, and entire cities around its clean energy philosophies.
Jacobs said that his company would fund projects that other investment firms will turn away, including smaller deals and early-stage technologies considered risky by some. He also noted that many of the firm’s funding rounds are oversubscribed and competitive.
“We have had great success attracting institutional investors because this is a very compelling investment return profile relative to the risk undertaken,” Jacobs pointed out.
Jacobs said his customers come to him with different goals. Some want infrastructure resilience or a net-zero mandate. Others want to save money. He pointed out that the infrastructure that has been built over the past 100 years has been chiefly driven by the government and built on a large scale rather than catering to the needs of smaller, more local communities.
“The infrastructure that customers want and communities need are very different. We call it the four Ds: distributed, decarbonized, digitized, and democratized. And that is, in fact, what offers the most compelling value proposition to these customers and communities,” Jacobs said.
Some examples of the types of projects Jabobs refers to are a partnership with retail coffee shop Starbucks. The companies will focus on developing community projects in New York to supply solar power to local shops. Generate has also worked with Tampa, Florida’s public school system to reduce its carbon footprint and energy needs.
Jacobs notes that the new capital raised is just the beginning of what’s needed to overhaul and update the U.S. infrastructure. He said extreme weather places the U.S. in a vulnerable position. Generate Capital is seeking ongoing capital from investment partners that align with the company’s long-term ambitions.