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Microsoft Climate Innovation Fund
Microsoft Corporation develops software products. It was established in 1975. The products include operating systems, server applications, and productivity...
Microsoft Climate Innovation Fund
Microsoft Corporation develops software products. It was established in 1975. The products include operating systems, server applications, and productivity applications. It provides consulting services, product support, and sells the X-Box console.
General information
Firm type
Generic
Year founded
2020
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Redmond
Corporate office
One Microsoft Way, Redmond, WA, United States
Principals
Satya Nadella
Chairman and CEO, Microsoft
Sector focus
Frequently asked questions
Who runs investment decisions at the Microsoft Climate Innovation Fund?
Brandon Middaugh leads the fund's strategy and market development. She reports into Microsoft's corporate treasury organization, which holds final investment authority for balance-sheet commitments. The executive sponsor is Microsoft President Brad Smith.
Is Microsoft's Climate Innovation Fund structured as a traditional venture capital fund?
No. It operates as a balance-sheet vehicle within Microsoft's corporate treasury, not as a limited-partner fund. This means it does not raise external capital or operate under a fixed 10-year fund life, and its investment committee sits inside the company rather than as an independent GP.
Does the Climate Innovation Fund participate in fund commitments or only direct deals?
The fund focuses almost entirely on direct equity investments, project-finance debt, and offtake agreements. It does not operate a fund-of-funds program that allocates to external venture or growth-equity managers.
What investment stages does the fund target?
The Climate Innovation Fund deploys across growth and late-stage venture, project finance, and structured offtake contracts. It has backed scaled businesses like Rivian and emerging industrial-tech companies such as Climeworks, and it also pre-purchases carbon-removal credits to provide revenue certainty to early-stage projects.
How is the fund's performance measured?
Microsoft evaluates the fund on decarbonization impact and scalability of the technologies it backs, not on net IRRs or distributed-to-paid-in capital. The vehicle exists to help Microsoft meet its 2030 carbon-negative target — financial return is a secondary outcome, and the treasury does not publish unit-level fund returns.
Does the fund have a fixed capital pool, or will it continue raising money?
Microsoft initially allocated $1 billion over four years beginning in 2020 and later expanded the commitment. The company does not raise external LP capital for the fund, so future increases are balance-sheet decisions made by Microsoft's treasury and executive leadership.
How does the Climate Innovation Fund relate to other Microsoft investment vehicles?
The Climate Innovation Fund is distinct from Microsoft's corporate venture arm, M12, which focuses on broader enterprise software and AI deals. It operates under the treasury function and is tied directly to the company's environmental-sustainability targets, whereas M12 runs a standard venture-capital portfolio separate from the decarbonization mandate.
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Corporate structure
Part of
Microsoft