Clean Energy Seed Fund raises $26m – a “vote of confidence” in sector

The Clean Energy Seed Fund established just under a year ago as the first investment of the Coalition government’s re-badged Clean Energy Innovation Fund, has this week completed a $26 million capital raising, easily surpassing its $20 million target.

The fund’s manager, Artesian Venture Partners, said on Wednesday that the bumper capital raising included $10 million commitments from cornerstone investor the Clean Energy Finance Corporation (CEFC) and Australian Ethical Investment, and further investments from Hostplus and Future Super.

Launched in September 2016 with a $10 million cornerstone commitment from the $1 billion CEIF, the fund was set up to focus on clean energy sub-sectors including the internet of things, battery storage, biofuels and metering and control.

It aims to provide “pull-model” venture capital support to encourage greater investment and participation in the early-stage cleantech sector and co-investment from a wide range of investors, including high net worth individuals, angel investors, venture capital firms, corporates and institutions.

In the short-term, its goal is to invest at seed, angel and later stage follow-on rounds in 30-50 startups over a four-year investment period.

The fund also draws on the finance and skills of both the CEFC and the Australian Renewable Energy Agency (ARENA), the latter of which was, at the time of the fund’s establishment, facing steep budget cuts.

CEFC investment development director, Blair Pritchard said the $26 million of funds raised would be enough to see more dedicated clean energy accelerators popping up around the country.

“We are delighted with the strong interest from investors, which greatly exceeded our expectations,” Pritchard said in comments on Wednesday.

“It’s a fantastic vote of confidence in the clean energy sector.”

Artesian managing partner Jeremy Colless also described the fund-raising as a “huge vote of confidence,” that put clean energy entrepreneurs and startups at the forefront of the energy revolution.

“Australia has the potential and resources to excel in several innovation verticals, including Clean
Energy, AgTech and Medical Devices,” Colless said.

“By developing strong startup activity in these verticals, Australia can address major Asia-Pacific mega trends including food security, healthcare spending and sustainable energy, creating domestic jobs and building export opportunities.”

“The Clean Energy Seed Fund will play a critical role in helping establish a national clean energy startup ecosystem, encouraging and supporting entrepreneurs, backing accelerator programs, attracting co- investors, and engaging with international, especially Asian, partners and markets,” he said.

David Elia, the CEO of industry super fund Hostplus, said the investment ticked all the boxes for its members.

“Not only are we optimistic in the long-term risk adjusted returns investments like this deliver to our members, but more fundamentally we believe this genuinely addresses the much-needed focus on unlocking Australian innovation that targets clean energy solutions,” he said.