Convective Capital raises an $85 million fund to build disaster resilience
Source: TechCrunch
Fire season kicked off early in California this year, with flames already approaching a former nuclear test site outside of Los Angeles. The rising number of natural disasters in California, and around the world, demand our attention — and, in Silicon Valley, venture investment.
Fund Announcement
Convective Capital, an early‑stage venture fund led by Bill Clerico, announced a new $85 million fund on Thursday, following up on a $35 million fund raised in 2022. While the first fund was mainly backed by wealthy individuals (including Clerico, a co‑founder of WePay who sold the startup to JPMorgan for $300 million in 2017), this latest fund is largely backed by institutions, including insurance companies and asset managers.
Original Mission and Portfolio
Convective’s original mission was to develop the idea of “firetech,” investing in firms such as:
- Pano – AI‑powered cameras that spot fires early.
- Raine – Autonomous aircraft that dump water on fires.
- Burnbot – Robots for clearing brush and grasses.
- Stand – An insurance company that helps homeowners harden their homes against flames.
Expanded Mandate
With the new fund, Convective is broadening its thesis beyond wildfire to a resilience focus aimed at “providing risk management in the physical world.”
“There’s $60 trillion of real estate at high risk from disasters, the U.S. spends a trillion dollars a year mitigating and recovering from disasters, we need a new approach to this,” Clerico told TechCrunch. “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.”
First Investments from the New Fund
- The Lumber Manufactory – Builds timber mills to make forest management more economical.
- Drafted – Uses AI for home design.
- Voltaire – A Y Combinator‑backed firm building drones to inspect power lines.
- Edge Technologies – Develops an insurance product to hedge against volatile commodity prices.
Performance of the First Fund
Convective’s first fund has invested in companies that have collectively generated $100 million in revenue and are valued at $2 billion. Clerico noted that 79 % of the portfolio companies have progressed from seed to Series A, a rate that exceeds typical industry benchmarks.
Industry Context
The field remains nascent, and Convective spends considerable effort helping founders connect with traditionally hard‑to‑engage customers such as utilities, insurers, and government agencies. A major conversation revolves around convincing insurers to invest directly in technologies that mitigate disaster impacts. Clerico says this is beginning to happen, partly thanks to insurance startups Convective has backed, like Stand and Delos.
“There’s like a wave of new insurers that are stepping into the void left by the incumbents,” Clerico said. “That’s a really amazing opportunity for us as investors, but also it’s provoking a response now from the incumbents, and they need to change the way that they’re doing business.”
AI’s Role
Clerico highlighted that AI tools are making early‑stage teams more productive and enabling new ways to spot fires with sensor data or model fire behavior in simulations. At the same time, the industry’s rapid expansion of data centers is increasing demand on energy and water systems—stressors that create market opportunities for Convective’s portfolio.
“[AI] is putting a lot of demand on the energy system and water system through data center construction,” he said. “It’s not just something in our portfolio, but it’s actually creating market opportunity for our portfolio by adding additional stress to our physical systems.”
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