New Mexico's State Investment Council on Tuesday approved a $50 million commitment to a climate-focused fund managed by a venture firm out of California's Bay Area.
DCVC, based in Palo Alto, California, is raising up to $400 million for DCVC Climate Select, a fund targeted at mid-stage venture capital investments in climate and deep-tech companies. The State Investment Council approved an up to $50 million commitment to that fund on Tuesday.
Some of the firm's portfolio companies include Long Beach, California-based Rocket Lab (NASDAQ: RKLB), an aerospace firm, and Fervo Energy, a geothermal company based in Houston.
While none of DCVC's portfolio companies are based in New Mexico, Rocket Lab has operations in the state at Albuquerque's Sandia Science and Technology Park, and the Land of Enchantment is a "top priority" for Fervo, according to a DCVC presentation shared with the State Investment Council (SIC).
The Houston energy company has a "major leaseholding" in New Mexico for a 150-megawatt geothermal generation facility, Zachary Bogue, DCVC's co-founder and managing partner, told the council Tuesday.
"Across a handful of our companies, we have partnered with New Mexico already successfully, and we welcome the prospect of partnering further because of the business climate, the political climate, the land use climate and also the workforce," Bogue said. "It's a terrific workforce in both renewable as well as conventional energy, and those are the types of folks who really help us scale businesses here."
Bogue referred to technology out of national labs in New Mexico, like Los Alamos National Laboratory, Sandia National Laboratories and the Air Force Research Laboratory, when speaking about the potential for investments in the state.
"We think there's terrific deep tech that comes out of the national labs," he said. "That's a real asset to have these national labs in your state."
DCVC is a mid-stage investor, what Bogue called the "missing middle" in venture capital investing. The firm typically invests in companies that have reduced their technical risk but haven't started generating material revenue. DCVC, he added, can help companies scale past de-risking their technologies and unlock more later-stage venture capital rounds.
Committing up to $50 million to DCVC means the State Investment Council's investments out of its New Mexico private equity program have topped $500 million over the past 17 months. The New Mexico private equity program is aimed at investing state Severance Tax dollars into promising venture capital funds with the expectation of venture capital dollars flowing back to New Mexico-based companies.
Other firms to land recent commitments out of the SIC's New Mexico program include Menlo Park-based Airbus Ventures, Santa Monica-based Upfront Ventures and Dangerous Ventures, a VC based in Santa Fe.
