Embracing a Purposeful Journey

Fernando Lelo Larrea
5 min readJun 5, 2023

From Traditional VC to Impact Investing for Climate

“And now that you don’t have to be perfect, you can be good” — John Steinbeck

In life, there comes a moment when we are called to align our values with our actions, and leave behind what does not add to this objective. For me, that moment arrived when I witnessed the urgency of the climate crisis and the profound impact it will have on future generations, on my children’s future, when I experienced a profound awakening as I wrote here. It became clear that a paradigm shift was necessary, not only in how we approach business and investment but also in how we view our responsibilities as stewards of the planet.

Scientific data reveals that our planet is on the brink of irreversible damage if we don’t take immediate action. The concentration of carbon dioxide in the atmosphere has reached a record high of 416 parts per million (ppm), the highest level in over three million years. This stark reality prompted a transformative journey, a new rumbo, shifting my focus from traditional venture capital to impact investing for climate action.

As a venture capitalist, I was no stranger to the thrill of discovering disruptive technologies and investing in innovative startups. However, it wasn’t until I delved deeper into scientific research that the urgency of the situation compelled me to reevaluate my role in shaping the future, prompting a shift in focus toward investing in climate technologies that can make a tangible difference.

Transitioning from traditional venture capital to impact investing for climate was not a decision made overnight. It required introspection, research, and a deep understanding of this new path's potential risks and rewards. The scientific community warns that we have a limited window of opportunity to limit global warming to 1.5° C above pre-industrial levels. Beyond this threshold, the consequences will be catastrophic, with increased frequency and intensity of extreme weather events, rising sea levels, and irreversible damage to ecosystems, particularly in vulnerable areas like Latin America. What fueled my conviction was the realization that, beyond financial gains, impact investing allows us to harness the power of purpose and actively contribute to a more sustainable future. It offers a unique opportunity to align profit with planet, people, and purpose.

At first, I was hesitant to label what I was putting together as an impact investment fund. I was still carrying that baggage of a highly competitive, hustling, aggressive pursuit of returns mindset, with all the misconceptions and stereotypes, and an obsession with a positioning associated with recognition and an incomplete understanding of success. It was only when I started spending time with people who have devoted their lives to impact investing that I advanced my understanding of admiration, purpose, of success. And I knew I needed that evolution for myself and my career.

The birth of Rumbo Ventures, our Climate Tech Fund, represents the culmination of this reorientation towards a lifelong transformative journey. It is an embodiment of our commitment to channel financial resources towards groundbreaking technologies and solutions that address the challenges of climate change head-on.

What sets us apart is our unwavering focus on Latin America — a region with untapped potential and a burgeoning ecosystem of climate tech innovation. Scientific analysis indicates that Latin America possesses vast renewable energy resources, including ample solar and wind power potential. For example, the region has an estimated solar photovoltaic potential of over 580,000 terawatt-hours per year, equivalent to nearly double the world’s current electricity demand. By harnessing this immense potential, we can not only address the climate crisis but also drive economic growth and job creation in the region.

Rumbo Ventures takes pride in being the first and leading fund specifically targeting climate technologies in Iberia and Latin America. This pioneering position allows us to influence public policy, drive systemic change, and shape the region’s transition to a sustainable, low-carbon economy. By actively engaging with policymakers, industry leaders, and stakeholders, we aim to foster an enabling environment that supports the growth and adoption of climate technologies across the region.

Latin America, with its diverse economies and rich natural resources, holds immense potential for climate tech innovation. However, without a supportive policy framework, unlocking this potential can be challenging. Our fund recognizes this critical gap and is committed to working closely with governments, regulatory bodies, and local communities to advocate for policies that promote clean energy, sustainable infrastructure, and environmental stewardship.

By leveraging our expertise and partnerships, we aim to shape public policy to incentivize climate tech investments, streamline regulatory processes, and foster collaboration between the public and private sectors. Our goal is to create an ecosystem where entrepreneurs, scientists, and innovators can thrive, leading to sustainable economic growth and a brighter future for Latin America.

The climate tech sector in Latin America presents tremendous opportunities for both financial returns and positive impact. The region’s abundant renewable energy resources offer a fertile ground for investment and innovation. Additionally, the pressing need to address climate challenges, coupled with growing public awareness and support, creates a favorable environment for the growth of climate tech startups.

Our fund will actively seek out and invest in promising ventures that are pioneering breakthrough technologies, sustainable solutions, and scalable business models, around the world, through Iberoamerican talent. By nurturing these companies and providing them with the necessary resources, we aim to catalyze their growth and accelerate the transition to a low-carbon future in Latin America.

Studies have shown that investments in climate tech can yield substantial benefits. According to a report by the Global Commission on the Economy and Climate, investing $1.8 trillion annually in green infrastructure can generate $7.1 trillion in net economic benefits by 2030 and create 65 million new low-carbon jobs (source: The New Climate Economy, 2018).

We have started by putting together a discovery portfolio with a broad set of business models, technologies, and geographies, evidencing the depth and broad scope of what is already happening in our regions, from seaweed solutions provider Thalasso to rock weathering with Silica. From carpooling leader Hoop, to carbon-capture breakthrough technologies with Parallel Carbon. From cell culture for new ingredients Brazilian pioneer Cellva, to natural capital pioneer Cultivo.

The launch of our Rumbo Ventures Fund I marks a significant milestone in our pursuit of a more sustainable future in Latin America. As the first and leading fund in the region, we are positioned to influence public policy, drive systemic change, and shape the trajectory of climate tech innovation. Through strategic investments, active engagement, and collaboration with stakeholders, we are determined to create an ecosystem that supports and accelerates the adoption of climate technologies across Latin America, while delivering top-decile returns to our investors.

I invite you to join us on this transformative journey, to be part of a movement that is reshaping economies, protecting our planet, and leaving a lasting legacy for future generations. Together, we can pioneer change, drive impact, and forge a sustainable future for Latin America.

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Fernando Lelo Larrea

Venture Capital Investor. Entrepreneurship. Economics. Seeking Innovation & Impact.