In a venture landscape often fixated on software margins and digital worlds, a different kind of thesis is gaining critical momentum, one grounded in the physical realities of a changing climate. Convective Capital, the early-stage firm founded by WePay co-founder Bill Clerico, has announced the final close of its second fund, securing $85 million to invest in technologies that build resilience against natural disasters. This new fund is more than double the size of its 2022 predecessor and signals a significant shift in investor sentiment. The capital is not just a bet on a few clever startups, but an acknowledgement of a stark new economic reality: the systems we rely on for insurance, infrastructure, and safety are failing, and the private markets are now being called upon to build their replacements.

This fund close arrives at a pivotal moment. With traditional insurers retreating from high-risk states and utilities facing existential threats from climate-driven events, a massive protection gap has emerged. For Convective, this gap is not a void but a market opportunity measured in the trillions. The $85 million in fresh capital will empower a new generation of founders to tackle some of the most complex and urgent physical world problems, moving beyond the firm’s initial focus on wildfire and into the broader arena of holistic disaster resilience.

From Firetech Pioneer to Resilience Platform

Founded by Bill Clerico, who experienced the world of high-growth technology firsthand by building and selling payments company WePay to JPMorgan for a reported $300 million, Convective Capital began with a sharp, specific focus. Its inaugural $35 million fund, raised in 2022, was largely dedicated to building out a category it helped define: “firetech.” The thesis was born from the direct threat wildfires posed to communities and economies, particularly in the American West.

The early portfolio from Fund I reads like a tactical response unit to the wildfire crisis. Investments included Pano AI, which uses a network of AI-powered cameras to detect nascent fires with astonishing speed, and Raine, a company developing autonomous aircraft for precision water drops. Convective also backed Burnbot, which is deploying robotics to clear the hazardous vegetation that fuels megafires, and innovative insurance players like Stand, aimed at helping homeowners harden their properties against fire risk. The results from this initial strategy have been compelling. Clerico notes that portfolio companies from the first fund have already generated over $100 million in collective revenue and have reached a combined valuation of $2 billion. Perhaps most impressively, 79% of the seed-stage companies in Fund I have successfully raised a Series A round, a graduation rate that significantly outperforms industry benchmarks and validates the firm’s hands-on approach.

This early success provided the foundation for a much broader vision. The new fund expands the mandate from a single peril, fire, to the entire spectrum of physical world risks. As Clerico states, “There’s $60 trillion of real estate at high risk from disasters, the U.S. spends a trillion dollars a year mitigating and recovering from disasters, we need a new approach to this.”

The Deal: Institutional Capital Endorses a New Asset Class

The composition of Convective Capital’s Fund II is as significant as its size. While the first fund was primarily backed by high-net-worth individuals and family offices, this new $85 million vehicle attracted a powerful cohort of institutional Limited Partners (LPs). The participation of major insurance companies and asset managers marks a crucial turning point, signaling that disaster resilience technology is no longer a niche or purely impact-focused play. It is now being recognized as a critical emerging asset class with the potential for venture-scale returns.

For these institutional LPs, the investment is both offensive and defensive. Insurance carriers, in particular, are on the front lines, facing unprecedented losses that have forced them to abandon entire markets. Investing in a fund like Convective gives them a window into the technologies that could fundamentally reshape risk modeling, mitigation, and underwriting. It is a strategic hedge against their own business models being disrupted by climate change and the very startups Convective aims to fund.

Investment Thesis: Building the Infrastructure for a Harsher Reality

Convective will deploy its new capital at the early stages, writing checks for seed and Series A rounds into companies that provide what Clerico calls “risk management in the physical world.” The strategy is not about incremental improvements but about building entirely new solutions for markets where incumbents are in retreat.

The first four investments from Fund II already illustrate the breadth of this expanded thesis:

  • The Lumber Manufactory: A company building advanced timber mills designed to make proactive forest management and thinning economically viable, directly addressing the fuel buildup that leads to catastrophic wildfires.
  • Drafted: An AI-powered platform for home design, potentially streamlining the process of rebuilding communities after a disaster and incorporating resilient design principles from the start.
  • Voltaire: A Y Combinator alumnus building specialized drones for inspecting power lines, a critical task for preventing utility-ignited wildfires and improving grid reliability.
  • Edge Technologies: An insurance technology company creating novel products to help businesses hedge against volatile commodity prices, a second-order effect of climate disruption on supply chains.

This selection demonstrates a sophisticated understanding of the problem. Convective is not just funding sensors and drones, but also the economic and financial infrastructure needed to support a more resilient society. The thesis recognizes that you cannot solve the wildfire problem without addressing forest economics, and you cannot ensure grid stability without better inspection tools.

A Market Forged by Market Failure

The investment opportunity for Convective Capital is being carved out by the failures of legacy systems. The insurance industry’s withdrawal from states like California and Florida has created a vacuum. Utilities, some bankrupted by wildfire liabilities, are desperately searching for technology to harden their infrastructure. Government agencies, historically slow-moving, are now facing public pressure to adopt new solutions faster.

“The silver lining is that it’s gotten so bad that the private markets can now take over,” Clerico explained. “Utilities going bankrupt, insurers leaving big markets, these are very large economic events, and those create markets for new solutions and products.”

This is the core of the opportunity. The Total Addressable Market (TAM) is no longer a theoretical calculation of future spending, but a present-day crisis budget measured in the hundreds of billions annually in the U.S. alone. Convective’s key advantage is its deep understanding of the unique sales cycles and stakeholder complexities involved. Selling to a utility, an insurer, or a state fire agency is notoriously difficult for a typical Silicon Valley startup. Clerico and his team leverage their expertise to help founders navigate these opaque markets, acting as translators and connectors between the worlds of fast-moving tech and risk-averse institutions.

The competitive landscape is still nascent, but growing. Other climate-focused funds are active, but few have Convective’s sharp focus on adaptation and resilience in the physical world. Many climate tech investors remain concentrated on decarbonization, which, while critical, does not address the “here and now” dangers of the climate change already underway. Convective’s focus on immediate, tangible risk reduction gives it a differentiated and deeply relevant position.

What’s Next: Scaling Resilience

With $85 million ready to deploy, Convective Capital is positioned to become a central node in the disaster resilience ecosystem. The firm will continue to invest in 15 to 20 early-stage companies, seeking founders who combine technical acumen with a gritty determination to solve hard, physical problems. A key theme going forward will be the role of AI, not just as a buzzword, but as a practical tool. AI is enabling new methods for fire modeling and sensor data analysis, while also making small, early-stage teams more productive and capital-efficient.

Ironically, the AI boom is also creating new demand for Convective’s portfolio. The massive proliferation of data centers requires enormous amounts of stable power and physical security, increasing the urgency for grid resilience and protection from physical threats like wildfire. This creates a powerful, self-reinforcing demand cycle for the very technologies Convective is funding.

Clerico sees a wave of new, technology-forward insurers entering the market to fill the void left by incumbents. He believes this will provoke a competitive response from the legacy players, forcing them to finally embrace innovation. By funding both the disruptive insurance startups and the underlying mitigation technologies they need to succeed, Convective is playing the entire value chain. The close of this fund is more than a financial milestone, it is a statement of intent to build the technological arsenal for a world that can no longer afford to be reactive.