Breakthrough Energy has decided to cease new investments from Catalyst, its first-of-a-kind project finance arm, marking the latest setback for climate tech start ups trying to scale up in an already difficult market.
“The fact that Catalyst is disappearing is a huge blow,” said Lara Pierpoint, managing director for Trellis Climate at Prime Coalition, which deploys philanthropic capital to early-stage climate tech, in an interview with Latitude Media. “There isn’t a replacement for what Catalyst was doing.”
The Bill Gates-backed fund launched in 2021 with about $1.5 billion in capital. That’s far more cash than most specialized project finance funds, all dedicated to a single purpose: carrying nascent green technologies from pilot phase to their first commercial project, a financing gap known as the Valley of Death because so many startups flounder when it comes to commercializing a technology that they’ve successfully demonstrated in the lab.
Catalyst’s “blended finance” model raised capital from philanthropy, corporations, and governments, and was aimed at derisking projects viewed as too risky by larger, institutional infrastructure investors.
Catalyst set a goal to mobilize a total of $15 billion in project finance for technologies like green hydrogen, sustainable aviation fuel, direct air capture, long-duration energy storage, and low-carbon cement and steel. Now that the fund is suspending new investments, it will likely fall short of that goal — right at the same time that the Trump administration has canceled billions of dollars in loans and grants for climate tech projects.
“With the initial portfolio established, Catalyst has transitioned from evaluating new funding opportunities to managing and supporting its existing companies,” Breakthrough Energy said in a statement to Latitude Media. “We are actively working with our partners to gather lessons learned and case studies from Catalyst’s groundbreaking work, and in the months to come will have more to say about how we apply those lessons to the long-term challenge of funding and deploying new energy infrastructure.”
The group didn’t comment on how much money Catalyst has spent since 2021 or the number of employees who were impacted by the shift in strategy, which was first reported by Axios. Breakthrough Energy told Latitude that the evolution of its work means that the company “requires a smaller team”; Bloomberg reported that Catalyst’s former leader Mario Fernandez was laid off.
Fernandez, on a January 2025 episode of the Catalyst podcast, said that his team had the energy, infrastructure, and investing expertise — plus more flexible capital — to help shepherd climate tech to their first commercial project.
“There is such a rigid criteria for infrastructure investors,” Fernandez said. “You have to have a long-term track record for the technology. You have to have hours of operation. You have to have a really solid EPC scheme to build it. You have to have a long-term contract and you have to be able to not only invest in a small one-off project, but you have to be able to invest hundreds of millions of dollars from that fund into that technology.”
For more on Mario Fernandez’ thoughts on first-of-a-kind financing, listen to his interview on the Catalyst podcast:
Catalyst’s investment roster included thermal battery maker Rondo Energy, which in October 2025 switched on a large commercial project at Holmes Western Oil’s facility in California, as well as DAC startup Heirloom, which now has several commercial projects underway.
Catalyst is one of several Breakthrough Energy initiatives focused on financing. The flagship Breakthrough Energy Ventures arm has raised more than $3.5 billion across three funds between 2016 and 2025. It emerged from a 2016 sustainable financing commitment from investors worth a combined $170 billion, with Bill Gates at the helm. Catalyst has always operated separately from BEV.
However, under the second Trump administration, the parent organization Breakthrough Energy has shifted dramatically. In early 2025, the group disbanded its climate policy teams in the U.S. and Europe. And in October, Gates penned a highly controversial letter arguing that some climate finance was “diverting money and attention” from efforts that could have more impact on preventing human suffering, like global health work in poor countries.
Meanwhile, the Trump Department of Energy canceled hundreds of individual awards totaling billions of dollars for projects across green hydrogen, DAC, distributed energy resources, and reducing methane emissions from oil and gas operations — including several Catalyst-funded companies such as Heirloom.
Pierpoint said that the withdrawal of funding from DOE, coupled with Catalyst ceasing fundraising, will inevitably have ripple effects for her work with philanthropists. Her clients want to invest in technologies with a plausible path to success that will make an impact on slowing climate change. That is becoming harder now that two major avenues for project finance have dried up.
“Many philanthropists who are willing to step up are looking around and saying, ‘DOE is stepping back and Catalyst doesn’t exist. I can’t solve this on my own,’” Pierpoint said.
