This venture capital firm believes investing in climate is ‘Obvious’—and just raised another $360 million to prove it
When Obvious Ventures launched 12 years ago with a focus on “world positive” companies, the idea was a contrarian bet: that startups tackling climate, health, and economic resilience could deliver big returns, not just feel-good impact. Founded by Twitter cofounder Ev Williams and others, the firm backed companies like Beyond Meat, the AI drug discovery company Recursion Pharmaceuticals, and Diamond Foundry, which makes sustainable lab-grown diamonds. By 2020, other VC firms had gotten into the climate investing space, and overall investment in climate tech surged. Now, as the Trump administration rolls out anti-climate policy and some investors retreat, Obvious is leaning in. Fresh off closing its fifth fund—at the precise figure of $360,360,360—the firm remains bullish. We talked to managing director Andrew Beebe about how Obvious has grown—and the current state of climate investing in the age of Trump.
‘World positive’ investing went mainstream
In the beginning, Obvious’s approach was unusual. “We started with this basic idea that the biggest companies of our time are going to be those that solve the world’s biggest problems,” Beebe says. Some people misunderstood it as “impact investing” that would only have concessionary returns. But Obvious was thinking differently: the thesis was that solving global challenges could drive financial success. Over time, as Obvious Ventures had early successes with companies like Beyond Meat, a growing number of investors moved in the same direction. (Beyond Meat has since struggled, but had the best-performing IPO in the U.S. in 2019.)
“Twelve years forward, we’ve had many venture firms copy, or let’s say lift, some of our language,” Beebe says. “But we appreciate that. We definitely consider imitation a sincere form of flattery. And because of that, but also because of the successes of these early companies, it’s been easier to explain what ‘world positive’ means. That’s important with limited partners. But it’s also really important with founders, so that we are not just getting, you know, sort of a yoga mat cleaning service or something, but instead getting these extraordinary ideas like radically reducing the cost of geothermal energy or AI for drug discovery. The big change is that I think more people can more easily digest what we do and why we do it. And the movement of world positive companies is stronger than ever.”
Smart climate investors aren’t pulling back
As the federal government pivoted on climate policy—pulling back billions of dollars in funding for clean energy projects, tax credits for EVs and other incentives, and pouring more support into the fossil fuel industry—climate investing dropped. But the fundamentals haven’t changed, and Beebe says that climate investing still makes sense.
“Venture firms outlast presidential cycles by definition,” he says. “And in this case, easily, because we only have two more years. But more importantly, with regard to climate, I love climate investing because it’s the macro of all macros. Unfortunately, we can very predictably see where things are going. And that’s just not always true. In health care, it’s hard to predict where things are going. But climate, the problem literally gets worse by the day, even if the government chooses to ignore it—oftentimes, because they choose to ignore it. And yet there are a lot of investors in the US who say, ‘Well, the government support’s gone. And look, people aren’t buying EVs anymore. So, let’s move on.’ And I love that. Those tourists should go home. And, I guess, go back to enterprise SaaS or whatever. Meanwhile, both on the founder side and on the investor side, the people who really understand the science and really understand the macro are not going anywhere.”
As climate investing grew over the past several years, Obvious Ventures had focused more of its last fund in other areas like health and robotics. Climate “got really frothy and overpriced,” he says. But it’s a better investment now. “It’s only over the last year, and this year, where I’m much more comfortable going really hard into climate.”
The One Big Beautiful Big Act slashed support for a wide swath of climate startups. Still, Beebe argues that some of what was in the original Inflation Reduction Act wasn’t necessary. “I was very supportive of the climate bill as an American, as an Earthling,” he says. “But from an investment standpoint, there was too much hype because of it, and it threw a lot of money at things that I did not think were going to work. We sort of stepped back and we only had one company out of maybe 25 that was really impacted by all of that being yanked. Now, because of that, a lot of those things that I didn’t think deserved investment are not going to get more investment. I would say an example of that is direct air capture—a lot of people are really into it as an investment category, I just don’t believe it. So, I think a lot of those things are going to die on the vine.”
He believes that other technology, from tech to help the electric grid to electric aviation, can grow now. “All of these things are not getting as much attention and are better priced, but are awesome, better solutions than what’s out there today,” he says. “It’s hard to say we’re doubling down on climate because we’ve always been in it, but, for sure, I am more bullish on the investment landscape and climate that I’ve been in probably five years.”
There’s still room for optimism on climate
In its latest annual report, Obvious includes some predictions from Beebe on what could come in the next decade—like the idea that we’ll have energy that’s too cheap to meter, and we’ll stop selling gas-powered cars. Despite the headwinds, Beebe is optimistic. “I love that Gates quote that we overestimate what we can do in two years and underestimate what we can do in 10,” he says. “Decade-long predictions I find pretty easy, but the near term is a different bucket. You know, I’m a professional optimist, I’m a venture capitalist, we have to do that. But I do think that graded on a curve, I’m much more optimistic than a lot of folks out there.”
Even with the “unfortunate rhetoric” from the federal government, he says, states, utility companies, and startups are still moving forward with solutions. American car companies risk falling behind on EVs, but globally, they’re still booming. “The rest of the world has also figured out that solar plus storage, wind plus storage, is much cheaper than natural gas,” he says. “Most U.S. utilities have figured that out, too. Unfortunately, there are some people in the administration who I actually think know that as well, but have decided to just take a very head in the sand approach. That won’t last. This is going to be our biggest solar year of installations yet, and I think we’ll probably see something of the same size next year. It’ll dip without changes after that. But I think we’ll see some changes. I’m pretty optimistic.”