From demolition debris recycling to imitation chicken, Congruent Ventures has taken a markedly different approach to investing than many of its social impact peers. Taking a no compromise approach, the San Francisco VC firm is seeking products and ideas that improve people’s lives, with minimal disruption to their habits or standards.
Founded only two years ago Joshua Posamentier and Abe Yokell, Congruent has discovered opportunities in everything from geothermal power to coffee roasting.
The firm focuses on four main sectors: energy transition, food and agriculture, smart cities and mobility, and industrial/supply chain, which also includes advanced materials and efficiency technologies, said Posamentier, who’s also a managing partner at Congruent.
“We are looking at no-compromise solutions to big problems,” Posamentier said. “We are generally not expecting people to change their behavior.”
Posamentier spoke with Karma contributor Mark Shenk.
Mark Shenk: You have invested in a vast assortment of startups. Can you tell me if there’s one that’s especially exciting at the moment?
Joshua Posamentier: Emergy has been cause for a lot excitement internally as it was an alternative meat deal. Unlike Impossible and Beyond, Emergy foods will be competitive outside of the high-end sector here. First-world countries eat a high-protein diet while in much of the world wants more.
People in other countries such as India and China want to consume more protein, with the middle class specifically desiring animal protein, and there’s not enough arable land in the world to support developing regions eating like the U.S. Emergy will be competitive in those markets in addition to domestically.
It’s delicious. It has a lower-cost base than others in the field, has great mouth feel, and looks good on the plate.
Shenk: High-end coffee shops are proliferating. Bellwether Coffee allows them to roast their own beans, beans that are sourced ethically. How does it work?
Joshua Posamentier: Bellwether Coffee has a product that allows a cafe to roast their own coffee. It’s electric and ventless. It streamlines the supply chain so much that it drops both the cost and the carbon footprint. This literally cuts the carbon footprint by half. Bellwether also manages the green coffee supply chain, which allows the company to influence growing practices. And there will be an option for the consumer to tip the grower.
Shenk: There’s a great deal of interest in solar and wind, but one rarely hears about geothermal power anymore. It’s interesting to see that you’ve invested in Fervo Energy, a geothermal startup. What attracted you to this project?
Joshua Posamentier: Fervo, which we just closed a few weeks ago, is exciting. Nobody has heard about geothermal in years. The last significant geothermal startup was Alta Rock, which had limited success.
Fervo is applying unconventional oil and gas technology to geothermal. They’re using horizontal drilling and the other tools developed by the oil and gas industry and leveraging them for geothermal.
Shenk: Bill Gates-backed Breakthrough Energy Ventures also invested in Fervo. Did you pair up with them?
Joshua Posamentier: Yes — we co-led that deal alongside BEV. They’re a unique shop with a really deep technical bench and are one of the few groups that’s not shy about hardware with deep technical challenges in the energy space. We’d expect to do more with them over time.
Shenk: You are very active in the solar sector. The companies you back are in niches I haven’t thought about, not in building the panels themselves. Can you explain what attracts you to these startups?
Joshua Posamentier: Omnidian takes care of operations and maintenance of residential and small commercial solar, while Raptor Maps looks at the other extreme at utility scale arrays, analyzing drone data to identify and diagnose issues on large-scale projects. They both are all about making solar more cost effective.
Shenk: Is there an average amount you invest, a range?
Joshua Posamentier: We focus only on early stage companies and have a typical first-check range of $150,000 to $1.5 million, but there’s not really a typical or average number. We also hold deep reserves. Deals where, for our investment, we’d only own a de minimis piece of a company, are typically out of scope. We want to be a material part of a company — not just a checkbook.
Shenk: Do you often partner with other venture capital firms?
Joshua Posamentier: Because of the breadth of our investment areas, we don’t often overlap that much within any one firm. We’ve co-invested a few times with Closed Loop Fund on some of our circular economy companies. We’ve co-invested a few times with my old shop, Prelude Ventures, given the general alignment. I think we’ve got a couple each with 8VC and Wireframe Ventures.
We’ve syndicated rounds with over 75 funds. One of the things we’re passionate about is building the right investor groups for companies we’re involved with — it can make a huge difference to companies over time.
Shenk: If you bring in partners, who are they? Family offices? Other venture firms?
Joshua Posamentier: If you mean syndicate partners in deals, it’s mostly other venture firms, but also strategic corporate investors and family offices we’ve worked with in the past or have some specific value add in a sector the company is focused in.
Shenk: Your projects all share the aim of sustainability. Do you expect with this ethical-investing strategy you can match the returns of your peers?
We aim to make venture-grade market returns in sustainability. At the end of the day we want there to be more capital and drive the virtuous cycle of investment.