Convective Capital raises $85 million to fund disaster resilience startups

At a glance:

• Convective Capital, led by Bill Clerico, has closed an $85 million fund to back startups that build physical-world disaster resilience, expanding beyond its original firetech focus.
• The new fund's first four investments include The Lumber Manufactory, Drafted, Voltaire, and Edge Technologies — spanning timber mills, AI home design, drone power-line inspection, and commodity-price insurance.
• Backers have shifted from individual angels to institutional players including insurance companies and asset managers, reflecting growing urgency as $60 trillion in real estate faces disaster risk.

A bigger mandate, a bigger check

Convective Capital announced Thursday that it has raised an $85 million fund, more than doubling the $35 million it deployed in 2022. The early-stage venture firm, helmed by Bill Clerico — a co-founder of WePay who sold the company to JPMorgan for $300 million in 2017 — is pivoting from a narrow wildfire thesis to a broader resilience play. Where the first fund concentrated on "firetech," the new vehicle is positioned to "provide risk management in the physical world," Clerico told TechCrunch.

The shift mirrors the escalating frequency and cost of natural disasters. Clerico pointed to $60 trillion of real estate at high risk and the U.S. spending roughly $1 trillion a year on mitigation and recovery. "Utilities going bankrupt, insurers leaving big markets — these are very large economic events, and those create markets for new solutions and products," he said. The fund's backers have changed in kind: while the 2022 vehicle was largely funded by high-net-worth individuals (including Clerico himself), the latest round is anchored by institutional capital such as insurance companies and asset managers.

Where the money is going

Convective's first fund already has a track record worth noting. Portfolio companies have collectively generated $100 million in revenue and are valued at around $2 billion, and 79 percent of those companies have progressed from seed to Series A — well above typical industry benchmarks. That pipeline informs the new fund's deployment strategy.

The first four investments from the $85 million vehicle are:

• The Lumber Manufactory — building timber mills to make forest management more economical
• Drafted — using AI to generate home-design plans
• Voltaire — a Y Combinator-backed firm building drones to inspect power lines
• Edge Technologies — building an insurance product to hedge against volatile commodity prices

These bets stretch across supply-chain infrastructure, generative AI applied to construction, autonomous inspection, and financial hedging — a wider spread than the original wildfire-centric portfolio that included Pano (AI-powered fire-detection cameras), Raine (autonomous water-dropping aircraft), Burnbot (brush-clearing robots), and Stand (home-hardening insurance).

The insurer conversation is shifting

One of the thorniest sales challenges in disaster-tech has been convincing incumbent insurers to invest in or adopt mitigation technologies. Convective has spent much of its operational time helping founders navigate procurement relationships with utilities, insurers, and government agencies — customers that many entrepreneurs consider difficult to crack.

Clerico says that dynamic is starting to flip. Insurance startups backed by Convective, including Stand and Delos, are creating a new wave of "insurers that are stepping into the void left by the incumbents." That influx is pressuring legacy carriers to rethink their own approach. "They need to change the way that they're doing business," Clerico said. The opportunity for Convective's portfolio is twofold: sell to the new entrants and, increasingly, to the incumbents who are forced to modernize.

AI as both tool and market driver

AI is showing up in Convective's portfolio in two distinct ways. First, generative and analytical tools are making early-stage teams more productive — speeding up design iterations, modeling fire behavior in simulations, and processing sensor data to spot fires sooner. Second, the industry-wide push to build out data centers is putting stress on the very physical systems that Convective's companies aim to protect.

"[AI] is putting a lot of demand on the energy system and water system through data center construction," Clerico 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." That feedback loop — AI demand worsening physical-risk exposure while simultaneously providing the tools to monitor and manage it — gives the fund a self-reinforcing thesis.

What to watch next

The disaster-resilience category is still nascent, and Convective is one of the few VC vehicles treating climate-related physical risk as a standalone investment vertical rather than a sustainability appendage. As more institutional capital flows in, the next signal will be whether the first cohort of resilience startups can graduate into later-stage rounds or achieve exits at scale. The fund's broadened mandate also means Convective will be deploying across more sub-sectors — timber, home design, power-infrastructure inspection, and commodity hedging — so cross-pollination and platform effects among portfolio companies could become a differentiator.