Convective Capital led by Bill Clerico announced an $85 million fund to address growing natural disaster risks. The fund expands beyond wildfire-focused investments to broader physical risk management. This follows the firm's $35 million 2022 fund, which backed companies developing AI-powered fire detection, autonomous firefighting aircraft, and home hardening solutions.

The new fund marks a shift toward institutional backing from insurance companies and asset managers, contrasting with the first fund's individual investors. Clerico points to $60 trillion in real estate at high risk from disasters and $1 trillion in annual U.S. disaster mitigation spending. This economic disruption creates market opportunities as traditional insurers exit high-risk markets.

Convective's first fund generated $100 million in revenue across portfolio companies now valued at $2 billion, with 79% graduating from seed to Series A—exceeding industry benchmarks. The fund's latest investments include timber mill technology, AI home design, power line inspection drones, and commodity hedging insurance. AI simultaneously enables new disaster detection while creating strain on energy systems that drives demand for resilience solutions.