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Podcast – How Silicon Valley got into investing in climate tech

Venture capital firms invested a whopping $70 billion globally into climate tech last year, with a big chunk of that cash coming from Silicon Valley. It’s a sector more accustomed to funding internet companies than new battery materials or carbon capture, but both investment strategies share a common denominator: taking on risk.

Zero’s guest this week is Dipender Saluja,a managing director at Capricorn Investment Group and leader of the firm’s Technology Impact Fund, which focuses on climate solutions. Capricorn has funded battery recycling company Redwood Materials Inc., electric aviation startup Joby Aviation Inc. and nuclear fusion firm Helion Energy Inc., among other ventures — and Saluja has been navigating the risks of climate tech for decades. He was a Tesla investor way back in 2006, when the company’s plan to build a large battery for electric cars still seemed preposterous.

“The whole world at that time was obsessed with, ‘How do you get away with the smallest battery possible?’” Saluja recalls. “And along came this company that said, ‘How do you build the biggest battery possible that you can fit into a car?’”

Even more unfathomable: Tesla wanted to build the car itself, and thought it could turn a profit doing so. “We all in Silicon Valley knew that automotive was the industry you stayed away from,” Saluja says.

Saluja, who has been in Silicon Valley for more than 35 years, started his career in the semiconductor industry, and recognized the pattern of falling battery prices that Tesla could take advantage of. He decided he was willing to risk an investment. Today, Capricorn has $9 billion under management and Tesla has become a symbol of both the climate tech revolution and the role Silicon Valley can play in it.

Saluja says much of his decision-making is based on the engineering mindset that first drew him to Silicon Valley, and the fluid and fast-changing nature of the semiconductor space. “We all were starting to think, ‘What impact were electronics and semiconductors having on the rest of the world?’” he says. “We were building technology for technology’s sake. And that can be a lot of fun.” But he wanted to bring his experience scaling technology to bear on more difficult problems, and found himself especially interested in energy. Saluja calls the energy transition “the biggest opportunity in the history of the world.”

On the latest episode of Zero, Saluja talks with Akshat Rathi about his investing experience, how he navigates risk, and clean tech’s expanding roots in Silicon Valley. To hear the full interview with Capricorn Investment managing director Dipender Saluja, listen to this week’s episode of the Zero podcast.