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Exclusive: ArcTern Ventures raises $335M for climate fund

Illustration of the earth on a large pile of money

Illustration: Eniola Odetunde/Axios

Canadian climate investor ArcTern Ventures has raised $335 million for its latest early-stage fund, the firm tells Axios exclusively.

Driving the news: ArcTern's Fund III is roughly double the size of the firm's previous fund, and it's the first big climate fund announced in 2024.

Catch up fast: ArcTern is a climate generalist, investing in a wide array of hardware- and software-focused startups.

  • It's become one of Canada's most established climate investors since launching in 2013, with significant backing from institutional investors such as the Ontario Municipal Employees Retirement System and Canada Pension Plan Investments.
  • Early bets include home energy storage developer and energy management provider Palmetto, which have built respective valuations of $700 million and $1 billion, per PitchBook.

The latest: ArcTern's newest fund has drawn backing from TD Bank Group, Church Pension, OPTrust, and Allianz.

  • It's registered under Article 9 of the European Union's Sustainable Finance Disclosure Regulations, meaning its investments will be measured against the emissions they offset.

Details: The Canadian firm plans to back 25 startups through Fund III, writing initial checks of $5 million to $10 million, with another $30 million reserved for follow-on investment.

  • Fund III investments include EV maker Harbinger, autonomous lawnmower developer Scythe, battery inspection developer Liminal, heat pump manufacturer Woltair, retail trade-in and resale provider Trove, home electrification service Soly, food waste startup Winnow, and EV battery health site Recurrent.

Separately: ArcTern co-founder Tom Rand last year transitioned to operating partner.

Editor's note: This story was updated to include Allianz in the list of Fund III investors.

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