Third Derivative

Third Derivative runs an open global call for applications — typically receiving over 1,500 submissions per cohort cycle — and supplements this with direct referrals from its network of 200-plus co-investors, corporate partners, and RMI's global energy-policy networks. This funnel is filtered through techno-economic vetting by in-house engineers and market specialists before final selection. The corporate-partner network, which includes Microsoft and Shell, further matches selected startups to pilot and offtake opportunities, making corporate demand a direct input into sourcing.

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.

Third Derivative targets the seed- and early-stage bracket, specifically the gap between prototype validation and a full Series A. Its thesis is built on a belief that climate hardware and deep-tech ventures require more patient, technically informed capital during the scaling phase than generalist VCs typically provide. This means the firm will write first institutional checks and follow on selectively through early commercial traction.

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.

Named corporate partners include Microsoft, Shell, Norsk Hydro, and Wells Fargo, among others (per the firm's official communications). These partners provide pilot deployment opportunities, offtake agreements, co-development projects, and domain-specific technical mentorship to selected portfolio companies. The corporate network also serves as a proprietary sourcing engine: partners flag internal innovation needs, which the firm uses to steer its cohort selection 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.

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.