Climactic Launches Hybrid Fund to Help Startups Scale Production

The new Material Scale project will focus on climate tech startups in the apparel industry.

Published on Feb. 19, 2026

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Climactic, an early-stage venture firm, has launched a new hybrid debt-equity investment vehicle called Material Scale to help startups in the climate tech and apparel industries overcome the 'valley of death' and scale up production. The platform will provide funding and purchase commitments from major apparel brands like Ralph Lauren to help startups with commercial-ready products ramp up manufacturing.

Why it matters

Many promising startups struggle to transition from prototype to full-scale production due to the high capital costs and market skepticism around their ability to scale. Material Scale aims to address this challenge by providing a unique financing model that reduces dilution for startups while also securing purchase commitments from established brands, helping them get over the 'valley of death' that kills many young companies.

The details

Material Scale will initially focus on climate tech startups in the apparel industry. The platform will provide a combination of loans and equity warrants to cover the difference between a startup's production costs and the purchase price committed by a major brand partner like Ralph Lauren. This 'minimally dilutive' financing model allows startups to scale up without giving away too much equity. The deals between Material Scale, the buyer, and the startup will be executed simultaneously, immediately increasing the startup's valuation by securing a major customer.

  • Material Scale was launched in February 2026.

The players

Climactic

An early-stage venture firm co-founded by Josh Felser that is launching the Material Scale platform.

Josh Felser

The co-founder and managing partner of Climactic who noticed the challenges materials startups face in scaling production and created the Material Scale solution.

Ralph Lauren

A major apparel brand that is joining the Material Scale platform as a buyer for the initial launch.

Structure Climate

An investor that is joining Climactic as a general partner for the Material Scale project.

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What they’re saying

“They are chicken and egg stuck.”

— Josh Felser, Co-founder and Managing Partner, Climactic (TechCrunch)

“Software companies sell at a negative margin all the time in the beginning, you know, Uber, Lyft, you can look at lots of different examples. But for materials companies, they they're not allowed to do that. One of the questions I had is, 'why is that?'”

— Josh Felser, Co-founder and Managing Partner, Climactic (TechCrunch)

“We need more novel instruments like this to attack climate change. We want to be nimble and be able to take advantage of opportunities when we we see them and not just be doing the same old thing.”

— Josh Felser, Co-founder and Managing Partner, Climactic (TechCrunch)

What’s next

Climactic plans to eventually expand the Material Scale concept beyond the apparel industry and grow the platform to a nine-figure fund.

The takeaway

By providing a unique hybrid financing model and securing purchase commitments from major brands, the Material Scale platform aims to help climate tech and materials startups overcome the critical 'valley of death' and successfully scale their production to meet growing demand.