A San Francisco-based VC with a booming portfolio of sustainable startups recently landed a chunk of state money with the hopes of driving climate tech investments in New Mexico.
New Mexico's State Investment Council approved a $20 million commitment to At One Ventures II LP, the second fund out of At One Ventures, during its monthly meeting Tuesday. The commitment came out of the Council's New Mexico private equity program, which takes a small percentage of New Mexico Severance Tax dollars and puts them into funds with the expectation that those funds find viable investments in the state.
At One Ventures, a climate-focused VC, was launched by Tom Chi — an astrophysicist who's worked at large tech companies like Google, Microsoft and Yahoo — in 2020. Chi is a managing partner at the firm, alongside Laurie Menoud and Helen Lin.
Despite getting off the ground only a few years ago, the firm's portfolio includes nearly three dozen companies across four different sectors, according to its website — agriculture and food; buildings, construction and manufacturing; energy and transportation; and ecosystem restoration.
Among that portfolio is Cuby Technologies Inc., a property technology company headquartered in Delaware that's developing mobile "micro-factories" to more sustainably build modular single- and multifamily homes. Aleksandr Gampel, one of Cuby's co-founders, said one of the company's first factories could land in New Mexico, and Cuby has previously received backing from Albuquerque boutique VC GOS Capital.
Chi himself has a previous link to New Mexico, as well. He worked with Crosslink Capital, another San Francisco-based VC that's also received investment from the State Investment Council.
"Similar to the other funds that you've seen us bring for the New Mexico program, we view this fund as being complementary to the research being generated at various institutions in the state," Richard Pugmire, a private equity advisor to the Council, said about At One Ventures during the Council's Tuesday meeting. "We hope that that will lead to New Mexico-based investments."
At One's tagline is "to help humanity become a net positive to nature," Chi told the Council. The VC does that by investing money in companies that have what he called the "triad" — "disruptive deep tech which ushers in radical better unit economics paired with radically better environmental economics."
An example, he said, is a company that developed a textile machine with operating expenses about three times better than other options. That's an important part of At One's investment thesis, too, is finding companies that can be cost-competitive with existing alternatives.
Aside from his work with Crosslink and At One's connection to Cuby, Chi told the Council during its meeting Tuesday that he has "a bunch of experience with the national labs." While at Google, for instance, he helped the tech giant scout for high-tech talent at labs and top universities around the world, including those in New Mexico.
"To me, there's a good amount of continuity here and a good amount of familiarity in terms of the kind of breakthrough research that happens in your state," he said during the meeting.
While At One is targeting around $375 million for its second fund, Chi said the fund is "massively oversubscribed," meaning there isn't extra room for additional commitment amounts. He added that the VC previously increased its second fund's cap size but doesn't want to bump it up again because of At One's focus on early stage investments. Its average deal size is around $30 million, according to the venture website PitchBook.
"We size commitments in the New Mexico program relative to a reasonable prospect for making an investment in New Mexico," the Council's Director of Private Equity Chris Cassidy said when asked about the $20 million commitment amount during the meeting. "So in this case, we sized it to hopefully one or two investments as part of a larger portfolio."
The Council approved $50 million commitments each to a pair of other out-of-state funds — Arctos Keystone Partners Fund I and TCG Labs Fund I — during this week's meeting, as well. As opposed to the New Mexico-focused program, those commitments came out of the Council's national private equity program, which has a higher bar for a rate of return on Council investments.
Arctos Keystone Partners Fund I is the first fund out of a new strategy by Arctos Partners, a private investment firm launched in late 2019 to invest in professional sports franchises. Its "keystone" strategy targets growth capital and other financing to alternative asset managers, their funds and portfolio companies, per a July press release.
TCG Labs Fund I is managed by The Column Group, a health care and biotech-focused VC with an over 30 company-strong portfolio. Its average deal size over the past five years is around $90 million, per PitchBook.
