Bill Gates’ Breakthrough Energy Catalyst Halts New Investment, Lays Off Staff
(Bloomberg) — Breakthrough Energy, the climate tech financing group backed by Bill Gates, has stopped making new investments from one of its main funds to scale up emerging green technologies; The market for these very start-ups is being squeezed by President Donald Trump’s attacks on climate policy.
Launched in 2021, Breakthrough’s Catalyst fund has raised more than $1 billion to fund the introduction and scaling up of first-of-its-kind green solutions that often struggle to come to fruition due to unproven technologies and high costs. A spokesman for Breakthrough Energy said it was suspending new investments from the fund after backing 10 startups and spending “hundreds of millions of dollars”.
“Catalyst has transitioned from evaluating new financing opportunities to managing and supporting its existing companies,” the spokesperson said, as the organization learned from its initial investments. “It’s too early to tell what the future of our distribution efforts will look like.” Axios first reported the fund’s change of direction.
There were no immediate plans to raise more money for the Catalyst fund, according to the spokesman, who declined to provide details on what to do with the remaining capital. As part of the ongoing reform, Breakthrough Energy Catalyst has laid off some employees, including its former leader Mario Fernandez. The spokesperson said that “evolving the business requires a smaller team.”
Unlike most project finance funds, Catalyst is structured as a mix of philanthropic and return-generating financing, which adds a layer of complexity to its implementation. This latest move also reflects the broader challenges climate tech investors face in generating financial returns from first-of-its-kind technologies amid political and economic headwinds. In a memo published in January, Gates warned that the market alone could not solve climate change and called for more government support.
The Catalyst fund is among a number of green initiatives that Gates has established in recent years under the Breakthrough Energy banner. Breakthrough Energy Ventures, a venture capital firm, has also funded about 150 climate-focused startups, and about 30 or 40 of them have failed, Gates said in an October interview. He added that “there will be a lot of dead ends” when looking for solutions to decarbonize the world.
Trump’s climate policy reversals have stripped President Joe Biden of hundreds of billions of dollars that would have supported green technologies under the Inflation Reduction Act. This has made it even more important for existing startups to find new sources of cash to support the scaling of technologies. In September, a group of venture firms including Breakthrough Energy Ventures launched the All Aboard Coalition with the goal of raising $300 million for its first round of investments.
The rethinking of the Catalyst fund’s investment strategy comes after Gates was criticized by some climate advocates in October when he said prioritizing climate action above all else risked overshadowing issues such as health and equality. Early last year, following Trump’s return to the White House, Breakthrough also rolled back its public policy advocacy work and laid off dozens of employees in the U.S. and Europe. However, Gates said his views on the necessity of the Paris climate agreement and the need for companies to reduce emissions have not changed.
The organization’s venture arm, Breakthrough Energy Ventures, has raised some of its money from billionaires including Jeff Bezos and Michael Bloomberg, founder of Bloomberg LP, the parent company of Bloomberg News. The catalyst is operated separately and independently financed.
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