TLDR
ArcTern Ventures has successfully raised US$335 million for its third climate-focused fund, attracting investments from several big-name institutions. The Toronto-based venture capital group aims to invest in early-stage climate technology companies in North America and Europe that have the potential to reduce emissions in fields such as renewable energy, low-carbon mobility, circular economy, sustainable food, and industrial decarbonization. Despite a difficult year for the cleantech sector, ArcTern’s latest fundraising round indicates a renewed interest in cleantech opportunities.
Key points:
- Toronto-based ArcTern Ventures has raised US$335 million for its third climate-focused fund from major institutions, demonstrating strong interest in cleantech opportunities.
- ArcTern is seeking investments in early-stage climate technology companies that can help reduce emissions in various sectors, including renewable energy, low-carbon mobility, circular economy, sustainable food, and industrial decarbonization.
- The new fund has already made investments in eight companies in Europe and the United States.
- ArcTern’s fundraising success positions it as one of the largest players in the climate venture capital space globally.
- ArcTern invests outside of Canada and its new fund is not financed by government funds, setting it apart from many Canadian-based venture capital firms.
- The cleantech sector faced challenges in 2023 due to high interest rates and surging supply costs, causing fundraising difficulties for venture capital firms.
- Despite the challenges, ArcTern’s managing partner, Murray McCaig, is pleased with the total raised, which is approximately twice the size of its second fund.
- Mr. McCaig believes the sector will start moving in the latter half of the year and sees the next six months as a great time to invest in climate tech.
- Investors in Fund III include TD Bank Group, OPTrust, CPP Investments, Church Pension Fund, and Credit Suisse.
- ArcTern is targeting first-time investments in startups in the US$5-million to $10-million range, with further contributions potentially reaching up to US$35 million.
- The fund is looking for investment opportunities in Canada but has yet to invest in Canadian companies through its latest fund.
- ArcTern’s previous investments include Sheertex, Hydrostor Inc., electric vehicle maker Harbinger, Clir, and more.
