Exclusive: Wave Equity raising $400M for industrial climate fund
Illustration: Rebecca Zisser/Axios
Wave Equity Partners is raising $400 million for the firm's third fund, targeting startups focused on industrial decarbonization and sustainability, a source tells Axios.
Driving the news: The firm has invested $30 million from Fund III already, and it expects commitments to reach $150 million by the end of Q1 2024. It expects a final close in Q3, the source said.
Catchup quick: Wave launched in 2013 while investors were still licking their wounds from the Cleantech 1.0 crash — and managed to scrape together a fund that backed two of the most well-capitalized startups in climate.
Details: The Boston-based firm plans to write initial checks from Fund III of about $10 million, reserving another $25 million for follow-on investment.
- It'll typically back startups raising Series B rounds. It's targeting companies that have built about $1 million in revenue.
- The three companies in the Fund III portfolio are:
- Qio, a U.K.-based energy efficiency provider for data centers; Intelligent Fluids, a German developer of more efficient industrial cleaning; and MayMaan, a Hollywood, Florida-based developer of internal combustion engines that run on water and ethanol.
Of note: Wave has built a track record of finding hardware-centric startups.
- Two of the six startups backed by the firm's first fund from 2013 have since reached unicorn valuations of over $1 billion, per PitchBook: battery maker Factorial and water purification developer Gradiant.
Between the lines: Next-gen batteries and water purification tech were arguably outside the climate investing mainstream in 2013, a period when the biggest venture deals in the space were largely concentrated in renewable energy.
Meanwhile, a company from the firm's second fund from 2021, carbon capture developer Carbon Clean, has a valuation nearing $900 million, per PitchBook.
