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XElevation Ventures Is Raising $50M for a Climate-Focused Tech Fund in SoCal
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
Interest in electric cars is spiking as gas prices rise to their highest prices in years, but supply chain headaches and the lack of infrastructure such as charging stations are keeping the demand pent up. And, the longer-term effects on power grids will mean there will be lots to upgrade, even after the transition to cleaner technology, like electric vehicles, comes online.
Elevation Ventures, a new climate-focused venture firm in Orange County, is raising a $50 million fund to focus on technology that can provide new products and services. The fund will target seed-stage companies in SoCal, though it might also invest in a few Series A funding rounds. Check sizes will range from $500,000 to $3 million.
Elevation has partnered with two local organizations with deep roots in O.C.: business incubator Octane and Sustain SoCal, a network of professionals focused on clean tech development.
A VC Built By Consortium
Elevation Ventures Managing Partner Neal Rickner is an Orange County native who recently moved back to the area from Silicon Valley, where he was the COO of Makani Technologies, a company that developed airborne wind turbines. It was acquired by Google in 2013, and then eventually shut down by Alphabet, Google's parent company.
Elevation Ventures Managing Partner Neal Rickner.
Image courtesy of Neal Rickner
He also worked with what’s known as “X,” (formerly Google X), a research and development facility founded by Google, which now operates as a subsidiary of Alphabet.
”I’ve been through the ringer...up there,” he said. “I learned the best I could from the best innovators in the world."
But it wasn’t until Rickner did some serious reflection in 2020, that he decided to move back to Orange County. He had some informal conversations with members from Aliso Viejo-based Octane’s team in 2017, but it didn’t coalesce until 2020. Octane acted as the catalyst and facilitator, bringing in Sustain Socal. Elevation Ventures was formed.
Octane already has a track record in investing. In 2016, it partnered with Visionary Ventures, a VC firm that backs ophthalmology and aesthetic startups, which have a strong presence in Orange County.
The organization has both for-profit and nonprofit branches and serves SoCal’s general technology and medical technology ecosystems—connecting people, resources and capital. One of its initiatives is a four-month accelerator program called LaunchPad that gives local founders access to a slew of advisors and resources.
Sustain SoCal is a hub of climate, sustainability and environmental experts, with a presence at UC Irvine’s innovation center, The Cove. The network comprises thousands of experts; most have been involved with clean tech and/or climate tech for 20 years or more.
Elevation expects to make 15 to 20 investments from this first fund, over the next two to three years, Rickner said. Even before the first close of the first fund, expected this summer, Elevation is already writing checks through a type of investing known as a special purpose vehicle. Typically set up as an LLC or limited partnership company, SPVs make a single investment into just one company.
Rickner, Octane CEO Bill Carpou and Sustain SoCal CEO Scott Kitcher put together a mission statement for their new venture firm in the fall.
”The three of us bring together the core ingredients for a VC fund to succeed,” he said. “And, we complement each other well. We have different networks and skill sets, but we’re mission-aligned and collectively-aligned.”
The team hopes to raise around $20 million by the summer. It’s raised just over $10 million so far, Rickner said.
“The first commitments are all from SoCal and know Octane or SoCal well,” Rickner said, adding that they’re targeting high net-worth individuals and family offices.
Elevation recently also brought on longtime climate technology investor Rachel Payne and former Seeder Clean Energy co-founder Alex Shoer.
Early Investments
Elevation’s first investment, for which it raised more than $1 million, was in Los Angeles-based Veloce Energy. The startup runs a software platform and installation system to enhance the move to a decentralized, distributed energy grid that enables anyone to trade electricity on its networks.
Rickner said companies like Veloce can accelerate the shift to these decentralized power systems “faster and cheaper” than enormous electricity providers.
In late April, the firm made its second investment (also through an SPV) in Carbon Collective.
The Alameda-based startup enables employees to use their retirement funds to fight climate change by divesting from companies that contribute to climate change and to re-invest in companies working to combat the climate crisis.
“Venture deals move quickly,” Rickner said, in explaining why he opted to raise money quickly via SPV rather than waiting for the fund to close. “These first two deals were great opportunities. We had special access, and we didn't want to pass them up.”
Rickner declined to disclose the amount of either investment.
Photo by Tyler Casey on Unsplash
Next Industrial Revolution
It wasn’t an easy decision to leave Silicon Valley.
“Part of the allure for me was [the opportunity to] work on something I’ve been passionate about for a long time,” Rickner said.
He credits the pandemic and lockdowns that followed with inspiring him, like many others, to reflect on what was important.
“A lot of people woke up and decided we had to take better care of our environment, that climate change was happening,” he added. ”When you take time, you realize there are more floods and fires and extreme events, and it became personal to a lot of folks."
Elevation will have plenty of opportunities to invest close to home, Rickner noted. Orange County is home to some of the biggest names in electric vehicles, including electric pickup truck maker Rivian Automotive, which is headquartered in Irvine.
But it will also have local competition. Laguna Beach-based Keiki Capital launched in 2017 to invest in climate tech startups at the pre-seed and seed level.
Rickner sees the time we’re living in as a transition into the next industrial revolution—and he sees opportunities.
“90% of the world economy, as measured by country GDP, has committed to net zero,” he said, referring to several nations’ pledges to move to power sources that are carbon neutral.
More than half of the world’s corporate and financial institutions, as measured by revenue and assets under management, have committed to a net-zero approach, he added.
“The previous industrial revolutions produced many billionaires,” Rickner said. “And this one will do the same.”
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
Don’t Call It a Comeback: Riot Games Names Co-Founder Marc Merrill President of Games
06:13 PM | February 17, 2022
Image courtesy of Riot Games
More than four years after stepping down as co-CEO, Riot Games co-founder Marc Merrill has been named the L.A. video game developer’s president of games—putting him in charge of franchises including the studio’s blockbuster “League of Legends” title.
After Riot CEO Nicolo Laurent broke the news on Twitter Thursday, Merrill responded that he “can’t wait to jump in… on super secret projects,” tagging several Riot executives and developers. Since he and Riot co-founder Brandon Beck relinquished their co-CEO roles at the end of 2017, the pair have served as co-chairmen of the company.
Riot Games President of Games Marc Merrill.
Image courtesy of Riot Games
According to Polygon, Merrill has played a more informal role in producing various projects for Riot Games in recent years—such as commemorating the 10-year anniversary of “League of Legends” in 2019 and producing Riot’s 2021 animated Netflix series “Arcane.” Now, Merrill is turning his focus back toward overseeing gaming content for the publisher.
“Marc is one of the key visionary leaders who helped create Riot, build ‘League of Legends’ into a global phenomenon and drive Riot’s mission to become the most player-focused game company in the world,” Laurent said in a statement provided to dot.LA. “We have ambitious goals for Riot’s next phase of growth—it’s truly just the beginning for our live games and we also plan to enter a few other, very different genres—and Marc is the perfect person to lead our Games teams in delivering those incredible experiences for players
Merill and Beck co-founded Riot Games in 2006; five years later, the company was acquired by Chinese tech giant Tencent. After the pair stepped down as co-chief executives four years ago, Laurent, Riot’s then-president of global publishing, took the reins as CEO.
At the beginning of this year, Laurent laid out his five-year vision for Riot Games—including plans to embrace a more flexible hybrid work model, an emphasis on diversity and inclusion, and designs on more seasons of “Arcane.” Laurent also said Riot will open more development studios around the world to build out its talent base globally.
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
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samsonamore@dot.la
LA Venture: Technology Crossover Ventures’ David Zhang On His Approach to Investing
10:17 AM | February 24, 2023
courtesy of David Zhang
On this episode of the LA Venture podcast, Technology Crossover Venture (TCV) Partner David Zhang discusses his approach to investing.
TCV is a venture capital firm that invests in seed-stage, early-stage, later-stage and growth-stage companies. The multibillion dollar fund is known for its investments in technology giants including Netflix, Airbnb, Peloton, Spotify and Facebook.
“Going public is the start for us,” Zhang said. “Ninety percent of the time we're buying or we're purchasing a bigger stake in the company when it's going public. So, where most traditional venture capital firms will see going public as this sort of, ‘I'm getting out of here’ event, that's sort of like the beginning of the dance for us.”
Zhang is a long-time veteran of the VC world. He has invested in companies including rental and booking services platform Airbnb, expense management services Brex and online payment platform Klarna.
“One of the things that I personally enjoy about private investing is that there is this true long term alignment,” Zhang said. “Both from an investor and company perspective and also there's a relationship element that sort of compounds over time, whereas public market investing is definitely less so.”
In 2019, TCV invested in fintech companies like Brazilian digital banking company Nubank. Zhang said the app has now expanded into Mexico and Colombia.
Zhang said that replicating what's working well in one geography can be difficult, especially in regards to fintech companies.
“There is this element of, you have to account for consumer behavior, cultural norms,” Zhang said. “But you need to very well understand the lay of the land of regulation and infrastructure. Cultural differences tend to necessitate a different product.”
Zhang has been involved with the Nubank boardand is also on the board of the financial advisory and trading platform Wealthsimple.
“I think the function of the board is to allow a CEO and a management team to achieve their full potential,” Zhang said. “We like to think of ourselves as a trusted adviser. I think a lot of what we do also is, or a big part of the value proposition is having consistency in the themes and the values in the messages that we send to companies.”
Zhang said that the qualities of a good trusted advisor is someone who is “calm” and “balanced.”
While Zhang agreed that VC is still a small percentage of all investable capital in the world, he is convinced that, “in our world (venture capital), it's large. It's huge and it makes sense because, in my view, it’s the most exciting place to be, it's where most of the value in dollars should and will shift over time.”
dot.LA Reporter Decerry Donato contributed to this post.
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.
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Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+ Shift.com, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
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