Ben Gust
As climate ambitions around the world converge on net zero emissions targets, demand for disruptive climate technologies and businesses that can help with this transition is growing.
Stepping into the field to direct capital towards clean tech start-ups with a planned $200 million capital raising is specialist fund manager, Virescent Ventures. Focusing on key areas that drive emissions reduction, energy transition, the circular economy, smart cities and mobility as well as food and agriculture, the fund was created earlier this year with the support of the world’s largest green bank, Australia’s Clean Energy Finance Corporation (CEFC).
Virescent Ventures’ roots lie in Australia’s biggest dedicated cleantech investor, the specialist Clean Energy Innovation Fund, which has invested approximately $150 million into 21 early-stage clean technology companies in just five years. Investee companies include e-bike start-up Zoomo, lithium tech company Novalith, agritech soil carbon specialist Loam Bio and electric vehicle charging company JET Charge.
“The Innovation Fund has been instrumental in helping innovative and entrepreneurial cleantech businesses develop and grow their companies and attract capital from both domestic and international investors,” says Virescent Ventures joint managing partner Kristin Vaughan, previously an investment director at the Innovation Fund. “Virescent Ventures was established this year in response to what we saw as the enormous market interest in the commercialisation of innovative technologies in the cleantech sector. Our goal is to build on the work of the Innovation Fund, raising additional capital from strategic investors, superannuation funds and large family offices to accelerate the growth of cleantech start-ups.”
“Our goal is to build on the work of the Innovation Fund, raising additional capital from strategic investors, superannuation funds and large family offices to accelerate the growth of cleantech start-ups”
Virescent has also been appointed to manage the Innovation Fund investments on behalf of the CEFC.
“Our investment experience through the CEFC and now with Virescent comes with a level of expertise that is particularly critical for early-stage companies, who need not only financial support to get them to the next stage of growth, but also strategic guidance through the challenges start-ups are likely to face as they set out,” says Kristin.
“It’s important too, that businesses have strong ideas and ambition for what their company can achieve, have the awareness of what they need to succeed and what challenges they’re likely to face along the way. As investors, it’s crucial to work with businesses that understand their key strengths and challenges.”
Virescent Ventures co-managing partner Ben Gust led the Innovation Fund for the CEFC. “The Innovation Fund invests in companies that have strong commercial potential, an attractive business model and great management skills that champions innovative clean technology. Through our time at the CEFC we built the Innovation Fund business to invest in companies ranging from seed to Series B rounds across a range of sectors. At a fundamental level, we are looking to use the same lens to invest for Virescent, to continue to grow pioneering technology that supports a low carbon future.”
A case in point is homegrown Australian alternative proteins company All G Foods, riding on increased consumer trends for plant-based foods, which closed a $16 million seed capital raise in 2021 with support from the CEFC.
“Investing in companies like All G foods make sense – they have high quality products that consumers want and have the potential to drive sector growth and lead the way for Australia to become leaders in the field,” says Ben. Having recently announced further capital injection from W23, the venture capital arm of one of Australia’s largest retailers Woolworths, All G foods is continuing to take their alternative protein business to the next level.
Samsara Eco is another Australian business supported in an early capital raise by the Innovation Fund. Samsara Eco has big ambitions to radically challenge the world’s mounting plastic pollution crisis. Adds Ben: “We’re very focused on engaging with companies that can hyper charge the transition to a zero-carbon future. Samsara is a great example of a technology solution with a real-world impact – earlier this year they partnered with the Australian Open, collecting thousands of plastic bottles, demonstrating how their technology allows for potentially infinite plastic reuse.”
Investment in new technology within existing industries such as solar also highlights how innovators and start-ups can disrupt established sectors – as demonstrated by the Innovation Fund investment into lightweight flexible solar panels developed by Sunman. “Sunman’s innovative technology has the potential to make solar more cost competitive and functional, enabling the use of solar on buildings unsuitable for traditional heavy glass and metal panels. Market demand for improved technology will always exist. Our investees seek to shakeup established sectors with improved solutions and demonstrate the ongoing value of the VC space,” says Ben.
As to the plans for Virescent Ventures, Kristin says the fund brings dedicated, deep sector experience to growing the market and scaling up businesses.
“We’re looking for companies that are in the early stages of building their businesses and are looking to scale up and grow rapidly. We are seeing really exciting opportunities with businesses of amazing calibre. There’s great potential and diversity across the cleantech space, there are businesses out there that have the potential to have a real impact on sustainability in the national and global arenas, while achieving outstanding commercial returns,” Kristin adds.
