Eco Investor October 2016

Unlisted Companies

New Cleantech Seed Fund

The Clean Energy Seed Fund has been launched by Artesian Venture Partners to invest in 30 to 50 emerging clean energy startups. The $20 million fund starts with a $10 million cornerstone commitment from the Clean Energy Innovation Fund managed by the Clean Energy Finance Corporation in what is the first investment by the Clean Energy Innovation Fund.

Artesian Venture Partners said the Clean Energy Seed Fund will focus on finding and financing emerging innovations and startups, and their commercialization will be assisted by finance and skills from the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA).

The Clean Energy Seed Fund will also invest in partnership with clean energy accelerators and incubators, university programs and angel groups. It is targeting seed, angel and later stage follow on rounds and aims to make the 30 to 50 investments over a four to five year period.

Artesian's managing partner Jeremy Colless said "The Clean Energy Seed Fund will target scalable, high growth potential startups, fueling innovation and creating opportunities in the development of clean technology. 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 fund aims to raise the other $10 million from 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 limited partnership (ESVCLP) to provide investors with tax-free returns; and it will be compliant with the Significant Investor Visa (SIV) Program.

As well as high returns, the Clean Energy Seed Fund wants to provide what it calls ‘pull-model' venture capital support to solve specific problems in the clean energy sector. It also wants to provide opportunities for its partners to make larger, later stage investments and so encourage greater investment and co-investment in the early stage clean tech sector from a wide range of investors.

CEFC chief executive, Oliver Yates, said Artesian's co-investment fund model will do this, and the Clean Energy Seed Fund can play an important role in building a vibrant and sustainable early stage clean energy venture pipeline.

"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. 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 said.

Artesian Venture Partners (AVP) is an investment manager with a scalable and diversified portfolio approach to early stage venture capital investments that targets both financial and strategic returns.

Artesian said it initially applies a smart-beta/ diversified strategy to build optionality/ pro rata follow on rights and then creates alpha via in-house stock picking expertise deploying larger amounts of capital in growth and pre-IPO opportunities. It says this approach provides investors with a pipeline of pre-screened and de-risked startup opportunities in which to make larger, late-stage investments.

AVP is the investment manager for several early stage venture capital limited partnerships including the Sydney Angels Sidecar Fund, BlueChilli Venture Fund, Slingshot Venture Fund, iAccelerate Seed Fund and the ilab Venture Fund. It is also the investment manager for the Australian Venture Capital Fund of Funds (AFOF).

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