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Third Derivative
Third Derivative is an open, collaborative climate tech ecosystem that accelerates startups and moves markets. It is building an inclusive, global ecosystem...
Third Derivative
Third Derivative is an open, collaborative climate tech ecosystem that accelerates startups and moves markets. It is building an inclusive, global ecosystem that rapidly finds, funds, and scales climate tech innovation and transforms markets. By guiding and supporting climate tech entrepreneurs, it helps startups go to market faster with breakthrough ideas and create real impact.
General information
Firm type
Private Equity
Year founded
2020
Location
Region
Africa
Country
Kenya
City
Nairobi
Corporate office
Nairobi, Kenya
Sector focus
Frequently asked questions
Is Third Derivative structured as a venture capital fund, an accelerator, or both?
Both. Third Derivative operates a climate-tech accelerator that provides technical assistance, mentorship, and corporate introductions — housed under RMI's nonprofit structure — while making direct equity investments through a separate for-profit vehicle. This hybrid structure means startups receive non-dilutive support during the cohort program alongside an equity investment from Third Derivative's fund. The firm explicitly designed this architecture to address the "first-of-a-kind" financing gap that conventional venture funds are often too rigid to fill.
Which sectors does Third Derivative focus on, and are there any it explicitly avoids?
The firm's mandate covers the full decarbonization spectrum: renewable energy, grid storage, green hydrogen, carbon capture, electric mobility, sustainable agriculture, and industrial-process innovation. Third Derivative does not invest in fossil-fuel extraction, petroleum refining, or any technology whose primary commercial application increases emissions intensity. The firm's relationship with RMI — a 40-year-old clean-energy transition organization — makes this exclusion constant and structural rather than marketing commentary.
How does Third Derivative's RMI relationship affect its governance and investment decisions?
Third Derivative is a joint venture between RMI and New Energy Nexus, and it operates under RMI's 501(c)(3) umbrella. This means the accelerator's cohort operations and technical-assistance programs can be funded with philanthropic and catalytic capital — keeping them non-dilutive to founders — while the venture investment vehicle operates at arm's length with a for-profit mandate. RMI does not have veto power over individual investment decisions but shapes the firm's overall thesis, emissions-impact methodology, and sector boundaries.
Where does Third Derivative deploy the majority of its capital geographically?
The firm has invested across sub-Saharan Africa, South Asia, and North America, with the densest concentration in East Africa — particularly Kenya — where its Nairobi headquarters sits inside one of the world's most active off-grid and distributed-renewable-energy markets. Portfolio companies such as SunCulture (Kenya, solar irrigation) and Zypp Electric (India, last-mile EV fleets) illustrate its geographic footprint. The corporate-partner strategy allows portfolio companies to pursue deployment across multiple continents within a single cohort cycle.
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