Virescent Ventures, a climate tech venture capital firm in Australia, has announced that its specialized portfolio has exceeded $260 million. The venture capital giant has backed a total of 33 innovative climate tech businesses, signaling a substantial contribution to the nation’s ambitious net-zero goals.
Established in 2022 by the Clean Energy Finance Corporation (CEFC), Virescent Ventures initially managed the Clean Energy Innovation Fund Fund I. Its success has positioned the firm as a leader in channeling crucial investments into a diverse array of Australian businesses poised to play a pivotal role in achieving Australia’s net-zero objectives.
Virescent Ventures is now eyeing the launch of a new fund, Fund II, with a target of approximately $200 million. The primary objective is to further stimulate private sector investment in Australian climate tech opportunities, specifically targeting sophisticated and wholesale investors. The CEFC is expected to be a cornerstone investor in Fund II, maintaining a similar investment mandate.
The goal of Fund II is to deploy an additional $200 million or more over the next five years. The investment strategy will focus on four key thematic areas addressing global climate transition and decarbonization challenges.
As of January 23, 2024, Virescent Ventures’ managed CEFC portfolio is distributed across the following thematics:
Clean energy transition: ~$115 million (44 percent of the portfolio)
Food and agriculture: ~$28 million (11 percent)
Circular economy and industry: ~$53 million (20 percent)
Mobility and smart cities: ~$48 million (18 percent)
The remaining approximately 7 percent of the portfolio, totaling $18 million, includes exposure to specialist seed funds and incubators.
The portfolio encompasses a broad spectrum of sub-sectors, technologies, and processes, addressing decarbonizing transport, electricity generation, sustainable food and agriculture, enabling technologies, decentralized grid management, green hydrogen, circular economy, and resources.
Recent investments include $2.6 million in the battery recycling startup Renewable Metals, supporting the scaling and commercialization of its lithium-ion battery recycling technology. The funds will be utilized to establish a pilot plant in Perth, WA, accelerate the construction of a larger demonstration plant capable of recycling up to 1,500 tonnes of battery waste per year, and expand the team for global outreach.
Virescent Ventures believes that the burgeoning Australian climate tech industry presents an attractive opportunity for investors to achieve outsized returns and portfolio alpha. The firm’s focus on Series A or seed stages, coupled with an active investment philosophy, aims to add significant value to founders and teams, aiding in the growth and scaling of their solutions.
Kristin Vaughan, Managing Partner of Virescent Ventures, expressed pride in building a robust portfolio and emphasized the importance of the CEFC’s support in advocating for climate transition and decarbonization solutions. Vaughan also highlighted the excitement about doubling the portfolio size with additional support from local and global institutional and private investors for Fund II.