Climate tech fund raises another $100m for electrification, grid and circular economy

Specialist climate investment fund Virescent Ventures has completed a $100 million first close of its second fund, Fund II, securing the support of more than 50 leading public and private investors, including a big four Australian bank.

Virescent Ventures says the fundraising round, led by cornerstone investors Westpac and the federal government’s Clean Energy Finance Corporation (CEFC), is just the first for Fund II, which aims to deploy $200 million into climate technologies.

Virescent’s first fund, the Clean Energy Investment Fund managed on behalf of the CEFC, has deployed more than $270 million across 34 Australian climate tech leaders including, hydrogen electrolyser manufacturer Hysata, EV charging outfit JetCharge and solar innovator SunDrive.

Managing partner Ben Gust says the investor response to the new fund – including the backing of Australia’s oldest bank – reflects confidence in Virescent’s approach as well as in the opportunities presented by the net zero economy.

“Fund II combines the CEFC’s deep decarbonisation capability, experience and connectivity, with Westpac’s leading market insights and financial expertise, to help supercharge the growth of emerging climate tech companies,” Gust said on Tuesday.

Virescent says the new fund will prioritise strategic investments in innovative technologies and solutions critical for the global transition to net zero, including electrification, grid management and fostering a circular economy.

“This is a generational opportunity for innovation, growth and impact,” adds Virescent managing partner Kristin Vaughan.

“Australia has abundant natural and renewable resources, deregulated energy markets, world-class universities and researchers, and government support for advancing clean technologies and industries.”

Westpac COO Peter Herbert says the strategic relationship with Virescent will give the big bank an opportunity to partner with leading specialists in fast moving and highly specialised sectors.

“Through this investment we’ll also have the opportunity identify emerging climate leaders and potentially work with them to provide leading solutions for our customers,” Herbert says.

CEFC chief Ian Learmonth says the strength of the other investors participating in the raise reflects Virescent’s “outstanding track record” and its experience in climate tech investing.

“As Australia’s largest specialist climate tech investor, the CEFC created Virescent Ventures to continue leading the market in developing a thriving climate tech eco system,” Learmonth said on Tuesday.

“In this critical decade to decarbonise, Australia must continue to back our homegrown climate tech pioneers and their groundbreaking solutions.”