TPG Rise Climate's Investment in Twelve: First-of-a-Kind Climate Finance

This case study explores the innovative financing partnership between Twelve, a pioneering carbon transformation startup, and TPG Rise Climate, a leading climate-focused investment fund.

Twelve has developed a groundbreaking solution to convert captured CO₂ into sustainable aviation fuel (SAF)—a potential game-changer for decarbonizing air travel. Despite early successes, Twelve now faces the “first deployment challenge” as it seeks capital to build its first commercial-scale production facility. The capital requirements and unique risk-return profile of Twelve’s facility fall directly in the gap between the smaller checks of high-risk high-return venture capitalists and the larger checks of risk-averse debt providers seeking predictable, if smaller, returns.

The case follows TPG Rise Climate’s investment team as it assesses whether to invest in Twelve and conducts due diligence. Students examine how TPG Rise Climate evaluates not only the technology’s commercial viability but also its potential carbon impact—a key metric for the fund’s dual mandate of generating both environmental benefits and financial returns.

At the heart of the case is the creative financing structure that TPG and Twelve ultimately devise—a solution that addresses the startup’s capital-intensive needs while aligning with TPG’s investment parameters. This novel approach represents potential innovation in climate finance that could serve as a model for bridging the deployment gap facing numerous climate technologies.

The case provides insights into the evolving climate finance ecosystem and raises important questions about how financial innovation can accelerate the commercialization of critical climate solutions. This case offers a window into the strategic thinking of leading climate investors and entrepreneurs as they attempt to accelerate the transition to a low-carbon economy while delivering competitive returns.