Convective Capital raises $85 million for disaster resilience fund

Convective Capital announced a new $85 million fund on Thursday. The announcement marks an expansion from the firm’s original focus on “firetech”—technology focused on wildfire prevention—to a broader mandate of disaster “resilience,” which is defined as the capacity to recover from or adapt to disasters. The expansion comes amid a rising number of natural disasters in California, including areas near Los Angeles, and around the world, which have drawn increased venture investment from Silicon Valley.

The new fund follows a $35 million fund raised in 2022. While that first fund was mainly backed by wealthy individuals, the latest $85 million fund is largely backed by institutions, including insurance companies and asset managers. Among the early individual backers was Bill Clerico, the lead of Convective Capital, who previously co-founded WePay and sold the startup to JPMorgan for $300 million in 2017. According to Clerico, 79% of the first fund’s portfolio companies have graduated from seed to Series A. The first fund’s portfolio companies have collectively earned $100 million in revenue and are worth a collective $2 billion.

The expansion is driven by the growing economic toll of physical disasters. Clerico noted that there is $60 trillion of real estate at high risk from disasters, and the U.S. spends a trillion dollars a year mitigating and recovering from disasters. “The silver lining is that it’s gotten so bad that the private markets can now take over — utilities going bankrupt, insurers leaving big markets, these are very large economic events, and those create markets for new solutions and products,” Clerico said. He also noted that artificial intelligence is putting a lot of demand on the energy system and water system through data center construction, adding stress to physical systems.

To address these risks, Convective Capital has made its first four investments from the new fund in:

• The Lumber Manufactory, a company building timber mills;
• Drafted, a company using AI for home design;
• Voltaire, a Y Combinator-backed firm building drones for power line inspection; and
• Edge Technologies, a company building insurance hedging products.

These join earlier portfolio companies from the first fund, such as Pano, which builds AI-powered fire detection cameras; Raine, which builds autonomous firefighting aircraft; Burnbot, which builds robotics for brush clearing; Stand, which provides insurance for home hardening; and Delos, a portfolio company in the insurance sector.

Why it matters

Convective Capital is expanding its investment mandate from wildfire-specific technology to broader disaster resilience, capitalizing on the growing economic impact of climate-related disasters on real estate and insurance markets. As traditional insurers pull back from high-risk areas, startups are stepping in to manage physical risks for critical infrastructure and property.