CEFC gives green light for specialist fund manager

Australia’s Clean Energy Finance Corporation (CEFC) on Friday launched specialist venture fund manager Virescent Ventures which is targeting a $200 million capital raise as it looks to lift investment in clean energy technologies and businesses.

Already Australia’s largest specialist cleantech investor, through its $200 million Clean Energy Innovation Fund, the CEFC will own 30% of the newly created Virescent Ventures. It is co-owned by its founders, formerly senior executives with the Clean Energy Innovation Fund, including executive director Ben Gust and investment leads Kristin Vaughan and Blair Pritchard.

The CEFC said the creation of Virescent follows the early success of the government-owned green bank’s Clean Energy Innovation Fund which has invested almost $150 million with direct investments in 21 companies and indirect investments in 100 another companies via three cleantech accelerator and incubator programs.

The latest of those investments is $6 million for Melbourne-based EV charging company Jet Charge.

The CEFC announced earlier this week it had increased its investment in Jet Charge, investing $6 million in the company’s $25 million Series B funding round. The CEFC said it has invested $9.5 million in JET Charge to help accelerate its growth.

To date, each dollar of investment from the CEFC’s innovation fund has attracted an additional $3.07 in private sector investment.

CEFC chief executive Ian Learmonth, who now sits on the Virescent board, said there has been “enormous market interest” in the commercialisation of innovative technologies and business models which can accelerate the transition to net zero emissions.

“The success of these companies can benefit our economy and our environment, while enabling Australian innovators to play a leading role in the sustainable economy of the future,” he said.

“In creating Virescent Ventures, we are continuing to lead the market in seeding a new Australian venture manager with an outstanding track record to facilitate additional private sector investment and growth in the cleantech sector.”

The CEFC also confirmed it will outsource the management of its innovation fund to Virescent Ventures, but will remain the owner of those equity positions and would continue to make its own investments.

“The CEFC will continue to invest in cleantech companies where our capital can make a difference,” Learmonth said. “With reserving for follow-on investments in our existing portfolio companies, we expect to deploy more than the notional $200 million originally allocated to the Innovation Fund.  The scale and strength of the CEFC balance sheet means we will be able to continue to invest in the cleantech sector drawing on capital from our core fund.”

Gust said the success of the Clean Energy Innovation Fund has generated very strong investor interest in the cleantech sector.

“Sustainability-focused investors are committed to the success of these innovators, recognising that there is no longer a need to choose between emissions impact and commercial impact,” he said.

“Virescent Ventures gives us a powerful opportunity to tap into this interest, by bringing a specialist fund manager to market.”

Virescent said it will back companies in four key areas within the realm of emissions reductions – energy transition, food and agriculture, the circular economy, and mobility and smart cities.

Vaughan said Virescent will be seeking to invest in Australian-focused cleantech start-ups and early-stage companies, including those seeking to expand into global markets.

“We see great potential and diversity among Australia’s cleantech entrepreneurs and are committed to supporting their commercial success, drawing on the positive gains of the Clean Energy Innovation Fund,” she said.