A venture firm focused on investments supporting the energy transition is fundraising for hundreds of millions of dollars. Houston-based VC Fuel aims to provide venture capital funding to early-stage companies and to finance infrastructure development to help bring companies to scale, the firm announced June 16. VC Fuel plans to invest in companies in renewable fuels, carbon capture utilization and storage, electric vehicles, electrification, clean agriculture, hydrogen, sustainable manufacturing, energy efficiency and other efforts in the energy transition.
A sister fund, VC Infrastructure, will provide financing for infrastructure projects to support portfolio companies funded by VC Fuel.
The venture firm was founded by CEO Ahmad Atwan, who has more than two decades of experience as an investor and entrepreneur in the energy sector. He previously held energyfocused roles with New York-based investment firm BlackRock (NYSE: BLK) and Morgan Stanley Infrastructure Partners.
“We aim to invest in companies that at scale can remove 500 million tons of carbon per year, which is roughly equivalent to 1% of global carbon emissions,” Atwan said. “We believe this ambitious decarbonization goal goes hand in hand with making highly profitable, sustainable investments.”
Atwan told the Houston Business Journal that VC Fuel began investing in the sector on a deal-by-deal basis in November 2020. The firm officially launched the VC Fuel and VC Infrastructure investment funds this summer, Atwan said.
The Houston-based firm aims to raise $100 million for the first VC Fuel venture fund as well as $500 million for the first infrastructure fund, sources close to the fundraising efforts told the HBJ. Atwan declined to comment on VC Fuel’s fundraising efforts. VC Fuel has made four investments so far, including in Floridabased organic vertical farming company Hardee Fresh. VC Fuel has made multiple investments into Hardee Fresh, including leading an
investment round, said Hardee Fresh President Halton Peters. Peters also serves as a senior adviser to VC Fuel.
In addition to Atwan and Peters, the VC Fuel team includes senior adviser Charles “Chuck” McConnell, formerly assistant secretary for fossil energy for the U.S. Department of Energy from 2011 to 2013. Neil Bush, the son of former President George H.W. Bush and the brother of former President George W. Bush, and Houston energy executive and consultant Rusty Braziel also serve as a senior advisers to VC Fuel. Additional team members are coming on board at VC Fuel in the coming months, Atwan said.
“We have assembled a best-in-class team in Houston, Texas, with expertise in both investing and in the ever-evolving energy transition landscape, and we look forward to actively adding value to our portfolio companies from the get-go,” Atwan said.
Last year, Atwan left Morgan Stanley and was going to join private equity firm H.I.G. Capital before launching VC Fuel, according to media reports. Atwan and Morgan Stanley were previously named in a complaint filed by two Houston-based companies affiliated with billionaire Enrique Razon, which reportedly accused Atwan and other entities of fraud in a real estate transaction, misrepresentation and breach of fiduciary duty. Atwan has called
the allegations “baseless.”
“One of the co-defendants in the lawsuit has just been dismissed, and we are confident that my case will reach a similarly positive outcome shortly,” Atwan said in a statement.
There are several Houston companies focused on business opportunities in the energy transition. For instance, Houston-based venture group Energy Transition Ventures is raising for $75 million to deploy in early-stage startups in North America, the company said in April. In May, Houston-based energy consulting firm Pickering Energy Partners announced the launch of Merge Electric Fleet Solutions, which will work with fleet operators to provide electrification and financial expertise to make the electrification process affordable and scalable.
Original article from: VC Fuel launches investment, infrastructure funds for clean energy deals – Houston Business Journal (bizjournals.com)