Artesian Venture Partners recently announced the launch of a $20 million seed fund that includes a $10 million cornerstone commitment from the new $1 billion Clean Energy Innovation Fund.
The Clean Energy Seed Fund – the first of its kind in the Australian clean energy space – will focus on unearthing and financing emerging innovations and start-ups in clean energy.
The $10 million cornerstone commitment is the first project to be financed through the new Clean Energy Innovation Fund, which draws on finance and skills from the Clean Energy Finance Corporation (CEFC) and Australian Renewable Energy Agency (ARENA).
What does this mean for clean energy start-ups?
Funds available through the Clean Energy Seed Fund will be invested in clean energy start-ups in partnership with established clean energy accelerators. Funds will also be invested in ventures sourced from the broader Australian start-up ecosystem, including other incubators, university programs and angel groups.
The Clean Energy Seed Fund will invest at seed, angel and later stage follow on rounds in 30 to 50 startups over its four to five year investment period. The fund has been designed to appeal to corporate, institutional, high net worth and impact investors looking to gain diversified exposure to Australian clean energy startups.
The fund is seeking registration with Innovation Australia as an early stage venture capital (VC) partnership (ESVCLP) to provide investors with tax-free returns and will therefore be compliant with the Significant Investor Visa (SIV) Program.
It is targeting additional private sector equity investment of up to $10 million to complement the $10 million commitment from the Clean Energy Innovation Fund.
What specific goals is the fund aiming at?
As well as targeting high returns for investors, the Clean Energy Seed Fund has a number of key strategic goals which include:
- Providing opportunities for partners in the seed fund to make larger, later stage investments
- Increasing the supply of clean energy start-ups in Australia by investing and collaborating with a range of accelerators, incubators, universities, angel groups, VC firms and corporates
- Providing ‘pull-model’ VC support to solve specific problems in the clean energy sector, encouraging greater investment and participation in the early stage clean tech sector and co-investment from a wide range of investors, including high net worth individuals, angel investors, venture capital firms, corporates and institutions
“The Clean Energy Seed Fund will target scalable, high growth potential startups, fueling innovation and creating opportunities in the development of clean technology,” said Artesian Managing Partner Jeremy Colless.
“It will look across sectors such as the internet of things, energy storage, biofuels, alternative energy generation (solar, wave, geothermal, wind), metering and control, green building and biomaterials, transport technologies, water and waste”.
The Clean Energy Innovation Fund became operational on 1 July 2016, with the goal of investing $1 billion over 10 years in eligible innovative clean energy projects.
What does this mean for Aussie clean energy?
“We have moved quickly to support innovation in the clean energy sector since the creation of the Innovation Fund. The Clean Energy Seed Fund is set to play an important role in building a vibrant and sustainable early stage clean energy venture pipeline in Australia,” CEFC CEO Oliver Yates commented.
“The Seed Fund builds on our ability to accelerate investment across the clean energy sector, channeling finance where it can support the transformation of innovative ideas into business realities.
“The co-investment fund model employed by Artesian Venture Partners encourages collaboration between a wide range of accelerators, incubators, angel groups and university programs along with the strategic and financial inputs of HNW, corporate, institutional and impact investors.”
“This will ensure CEFC finance can be used to support innovation in energy efficiency, low emissions and renewable energy technologies that fit within our Investment Mandate for clean energy,” he summed up.
ARENA CEO Ivor Frischknecht said: “Today marks an exciting milestone for clean energy innovation in Australia as we announce the first project to be funded through the Clean Energy Innovation Fund.
“ARENA and the CEFC have a long history of successfully working together and the new Fund provides us with an additional way to commercialise innovative clean energy projects.
“Going forward, the Clean Energy Innovation Fund is well placed to build on the continuing efforts and complementary skills of ARENA and CEFC to accelerate clean energy solutions, emissions reduction and renewable energy technologies.”