How Amazon decides which climate tech start-ups to invest in -- and what that says about its future ambitions
Matt Peterson, head of Amazon's $2 billion Climate Pledge Fund, explains how the tech giant picks its bets.
Key PointsAmazon has a $2 billion Climate Pledge Fund, which it uses to invest in start-ups building technology that can help it get to its goal of net-zero carbon emissions by 2040.Matt Peterson, head of that fund, explains to CNBC how the company chooses which kinds of start-ups to invest in.
In this articleAmazon bought the naming rights to rename Key Arena to Climate Change Arena.Source: NHL SeattleAmazonis going to achieve its goal of net-zero carbon emissions by 2040, it's going to need to rely on new technology. To spur the process along, the company has a $2 billion venture capital fund to gather and grow climate tech start-ups.
Watching where Amazon is investing is one way to track innovation in the space. It can also give investors a sense of what parts of its own business Amazon intends to prioritize in the future."A lot of what we invest for is three to five years out," headtopics.com
Matt Peterson, the head of The Climate Pledge Fund at Amazon, told CNBC. "We try to look around corners to see where our needs are going to be and where the needs of other companies are going to be. I mean, with with a 2040 time horizon, you know, you can't really afford to look one or two years out, you have to think long term."
The Climate Pledge Fund, which was announced in June 2020, is funded entirely with money from Amazon's own balance sheet. For Amazon, the priority is more about incubating the technologies it will need to meet its own climate objectives — making money is good, too.
"If happens to be that the companies we invest in do well and they become the nextTeslaor they return a multiple of our investment, then that's great. It shows that it's a validation of what it is, but it's not the main focus of the fund relative to the broader strategic goal," Peterson told CNBC.
It's also open to investing in companies at many different stages, and has invested from seed-stage up to series B rounds. "We can invest a million dollars in the company or invest over $100 million in the company," Peterson said. Read more: CNBC »
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