Many startups hit a wall after their first rounds of funds, growing too big for enterprise funds, but still need money. For specialized beginnings in industrial scale hardware, which includes many climate technology companies, the problem is particularly sharp because capital requirements are so high.
Infrastructure funds have long filled that gap, but many have been reluctant to dive into climate technology.
One firm thinks this provides for opportunities, however. Ara partners recently set up an $ 800 million infrastructure fund focused on reducing carbon emissions in industrial sectors, which have historically been difficult to decarbonize.
The field initially targeted $ 500 million, the firm told Techcrunch, but had strong support from new and existing investors, including pension funds, insurance companies, funds, foundations and sovereign funds from around the world.
The new fund has already made three investments, including in an Ireland -based organic household waste recycles and a biofuel terminal developer. The fund’s decarbonization strategy focuses on the burial of existing assets for new low carbon developments.
This significant fundraising reaches a time of political uncertainty over decarbonization in the US but increasing clarity about its economy. Many companies have been able to reduce the costs of low and zero carbon technologies in recent years, making them cost competitive with existing approaches.
Ara, for example, previously invested in divert through one of its private capital funds. The company donates food that is still good and, for food that is not edible, turns waste into biogas that can be sold or used to generate electricity and heat in the country. Compared to the alternative – sending waste to a landfill where it generates methane pollution – Divive access has a lot of environmental and financial meaning.
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The investment firm said it will announce its fourth investment under the “soon” strategy.
