Tom Steyer’s Galvanize is targeting venture debt, focusing on lending to early-stage companies, but avoiding the private credit market as it swells to about $3tn, according to a report by Bloomberg.
Venture debt has been recovering since the 2023 collapse of Silicon Valley Bank, which caused a 20% fall in volume. Chris Creed, who joined Galvanize this year from the US Department of Energy, said the firm is avoiding most of the private credit market over concerns about covenant strength and pricing, but sees three- to five-year start-up loans as an area capable of delivering double-digit returns.
Galvanize, co-founded by Steyer and Katie Hall and joined last year by John Kerry, launched its credit platform this year with a focus on energy transition and climate resilience. The strategy is anchored by a $1.3bn commitment from a major institutional investor.
Creed said demand for solutions addressing physical climate risks is growing, driven partly by insurers. The firm is targeting companies building climate-resilience technologies and expects borrowers to graduate quickly into broader capital markets.
