Convective Capital is an early-stage venture firm that backs startups building tools to prevent, respond to, and insure against disasters in the physical world. Its new $85 million fund gives the Convective Capital thesis a lot more weight — especially as California’s fire season starts early, insurers pull back from risky markets, and utilities face mounting pressure to harden infrastructure. Founded in 2022 by WePay cofounder Bill Clerico, the Bay Area firm started as a wildfire-focused investor and is now widening that bet into a broader resilience strategy. The core problem is simple: disasters are getting more expensive, but the institutions supposed to manage the risk still buy technology slowly and painfully.
What does Convective Capital actually do?
At the most basic level, Convective Capital invests in hardware and software companies. It also backs financial services companies that manage physical risk. That started with “firetech” — startups like Pano for early fire detection, Raine for autonomous aerial suppression, BurnBot for vegetation clearing, and Stand for insuring and hardening homes. Fund II expands that same logic beyond wildfire into a wider resilience market.
But this isn’t just a firm that wires money and disappears. Convective has built a support layer around hard-to-sell customers: utilities, state and federal agencies, insurance carriers, emergency management groups, fire departments, forestry services, and land managers. That matters because resilience startups usually don’t fail on vision. They fail when procurement drags on forever.
The firm’s operating model is more hands-on than a typical seed fund. It runs a 10,000-plus person network called Updraft, which has already generated more than $100 million in revenue for portfolio companies. It also convenes the Red Sky Summit, a gathering built to put founders in the same room as the institutions that actually buy this stuff.
That’s the real product here. Convective isn’t selling software. It’s selling access and credibility in ugly, regulated markets where a flashy demo doesn’t get you very far.
Who is behind Convective Capital?
The founding story
Convective Capital launched in 2022, when Bill Clerico took a narrow but timely view of climate tech: wildfire wasn’t just an environmental problem, it was becoming a giant market failure. Utilities were getting hammered. Homeowners were losing coverage. Governments were spending more every year just to react. So Clerico launched a firm built around the idea that resilience — not just decarbonization — could support real venture outcomes.
That thesis has already evolved. With Fund II, Convective is no longer framing itself only as a wildfire investor. Clerico’s updated pitch is to “provide risk management in the physical world,” which is a much bigger mandate and, frankly, a smarter one.
Why Bill Clerico fits this market
Clerico isn’t a longtime fire official or insurance executive. He came out of fintech. He cofounded WePay and led it until JPMorgan acquired the company in 2017 in a deal the source article values at $300 million. Before Convective, that was his biggest calling card.
That background actually makes sense here. WePay sold infrastructure into difficult, trust-sensitive markets. Convective now backs founders trying to do the same thing with governments, utilities, and insurers. Different sector. Similar sales pain.
The broader team helps fill in the domain edges. Partner Kat Mañalac spent more than a decade at Y Combinator building founder programs and networks. Principal Jay Ribakove came from Munich Re Ventures, where he invested in climate and built-environment risk. That mix — startup playbook plus insurance fluency — is a real advantage in resilience tech.
Track record, traction, and the new fund
Convective’s first fund was $35 million. It was mostly backed by wealthy individuals, including Clerico himself. The new vehicle is much larger at $85 million, and the LP base has shifted toward institutions such as insurance companies and asset managers. That change matters more than the headline number. It suggests the people closest to physical risk now think this category is investable, not just interesting.
The first fund has already produced some strong early signals. Clerico said those portfolio companies have generated $100 million in revenue and are worth a combined $2 billion. He also said 79% of the portfolio has moved from seed to Series A — far above typical venture benchmarks.
How Convective Capital stacks up against alternatives
Convective doesn’t compete head-on with Sequoia-style generalist funds. Its more relevant rivals are general climate-tech investors, insurer-backed venture arms, and industrial-tech funds that occasionally back adaptation plays. Most of those firms can fund a resilience startup. Fewer can help it survive a 12-month utility sales cycle or decode how a state agency buys equipment.
The legacy alternative is even rougher. Founders can bootstrap into pilot purgatory. They can chase grants or try to sell directly into bureaucratic buyers without a specialist investor in the room. Convective’s pitch is that it understands those “hard markets” better than mainstream VCs do — and that investors should want a specialist when the customer base includes regulators, carriers, and public agencies.
Why does Convective Capital’s $85M fund matter?
The big story isn’t just that Fund II is larger. It’s that the mandate is broader and more commercially legible.
Convective’s first version was basically a firetech proof-of-concept. Fund II is an attempt to turn that into a wider resilience platform. The first 4 investments show where the firm is heading: The Lumber Manufactory, which is building timber mills to make forest management pencil out; Drafted, which uses AI for home design; Voltaire, which builds drones for power-line inspection; and Edge Technologies, which offers insurance products tied to commodity-price volatility.
That’s a pretty clear map. Forest operations. Housing and retrofit workflows. Grid inspection. Financial hedging.
There’s also a second-order AI angle here that’s more interesting than the usual “AI makes startups efficient” line. Clerico said AI tools are helping small teams move faster, but he also argued that the data center buildout is straining energy and water systems — and creating demand for the kinds of services Convective’s companies provide. As he put it, “[AI] is putting a lot of demand on the energy system and water system through data center construction.”
And then there’s insurance. Clerico said there’s “a wave of new insurers” stepping into markets incumbents have partly abandoned, and that shift is starting to pull traditional carriers toward resilience tech. If that continues, Convective won’t just be funding startups. It’ll be sitting at the intersection of who pays for risk and who reduces it.
Why are investors betting on disaster resilience now?
Because the numbers have gotten too big to ignore.
In the U.S. alone, 2024 saw 27 separate weather and climate disasters that each caused at least $1 billion in damage, with total losses around $182.7 billion. Over the last 10 years, the country has been hit by 190 billion-dollar disasters costing roughly $1.4 trillion. That kind of loss frequency changes investor behavior. It turns adaptation from a policy conversation into an asset allocation question.
The global insurance picture looks just as ugly. Natural catastrophe events caused about $310 billion in economic losses in 2024, with insured losses at roughly $135 billion. And the insurance market has now endured 5 straight years with catastrophe losses above $100 billion. That’s why resilience tech is starting to look less like a niche and more like core infrastructure.
Clerico’s own framing is even broader: $60 trillion of real estate sits at high risk from disasters, and the U.S. spends about $1 trillion a year mitigating and recovering from them. You can argue over the edges of those numbers. The direction is the point. Physical risk has become a giant operating cost for homes, grids, utilities, municipalities, and insurers.
That’s why the timing works. Climate tech spent years chasing carbon accounting, batteries, and generation. Now adaptation is catching up — not because it’s trendy, but because somebody has to pay when the grid fails, the forest burns, or the carrier exits the zip code.
Should you watch Convective Capital closely?
Yeah, probably.
A lot of climate funds talk about resilience. Convective Capital has built a fund around it, then backed that thesis with portfolio traction, a bigger second fund, and an investor base that now includes institutions with actual catastrophe exposure. That doesn’t guarantee venture-scale returns — these markets are still messy, political, and slow. But if Fund II can keep turning specialist access into real customer revenue, Convective may help define what the next generation of disaster resilience investing looks like.
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FAQ
– What did Convective Capital raise?
Convective Capital raised an $85 million second fund. It follows a $35 million debut fund from 2022, and this time the backers are much more institutional, including insurance companies and asset managers instead of mostly wealthy individuals.
– How does Convective Capital work with startups?
It backs early-stage companies building resilience tools across hardware and software. It also invests in financial services. The firm helps founders reach buyers through its Updraft network and in-person events, which is a big deal when customers include utilities, government agencies, and insurers.
– Who founded Convective Capital?
Bill Clerico founded Convective Capital in 2022 after building WePay and selling it to JPMorgan in 2017. He now runs the firm as managing partner, with support from operators and investors including former Y Combinator partner Kat Mañalac.
– Why is disaster resilience becoming a venture category?
Because disaster losses are now huge, recurring, and impossible for incumbents to absorb cleanly. When the U.S. can rack up 27 billion-dollar disasters in a single year and insurers keep retreating from high-risk markets, startups that reduce physical risk start to look like real businesses, not side bets.
