ArcTern Ventures, based in Toronto, announced on Monday that it secured $335 million from TD Bank and other institutions for a climate technology fund.
The fund’s focus is to support industries such as renewable energy, clean transport, and others addressing climate change.
Additional investors in the fund, which is ArcTern’s third, include the Church Pension and Swiss lender Credit Suisse, now part of UBS.
The new fund will concentrate on upcoming companies that have the potential for rapid growth and immediate impact, ArcTern Managing Partner Murray McCaig said, given the urgency to reduce emissions within the next decade to meet global climate objectives.
ArcTern specifically targets software and other industries that can quickly scale and require less capital, steering away from projects heavily reliant on significant funding for success.
“It’s really tough to make those investments and rely on someone downstream writing a half-billion-dollar check for a new project that’s highly risky,” McCaig said.
“I wish I could tell you we’re investing in the hottest new sector like space-based solar or something, but the reality is, you know, the things that get us really excited are things like the mobility world,” and the global roll-out of electric vehicles, he said.
In the 12 months leading up to September, the demand for investment in climate tech, encompassing firms developing innovative methods to decrease greenhouse gases, declined by 40%, according to calculations by consultants PwC.
Nevertheless, this performance was more favorable compared to the broader venture capital industry, which experienced a 50% decrease.