London-based venture capital and private equity firm Lightrock has launched its first climate-focused fund.
The €860m (£742m) Lightrock Climate Impact Fund will back companies looking to reduce carbon emissions in Europe and North America.
The VC will make investments of between €10m (£8.6m) and €40m (£34.5m) in growth-stage businesses driving net-zero but has opened the door to investments in early-stage companies which have the “potential to emerge as leaders” within energy transition, decarbonising industries, sustainable food and agriculture and sustainable transportation.
It will also consider start-ups that help facilitate those sectors such as software solutions.
Lightrock has already made seven investments in these sectors, which it says is “warehousing” for the fund.
The funding was raised primarily by Lightrock’s anchor investor LGT as well as several new investors from around the world.
Lightrock, founded by Prince Max von Liechtenstein and headquartered in London but has offices in Switzerland, India, Brazil and Kenya, set up the fund with a target size of €600m (£517.4m) but was heavily oversubscribed.
The raise comes as an increasing number of VCs pour capital into sustainability-centred scale-ups, despite the number of green scale-ups dropping by 10 per cent year on year.
It also follows a $300m (£264m) South American growth fund for start-ups on the continent tackling environmental issues launched by Lightrock in July.
Pål Erik Sjåtil, Lightrock’s CEO and global managing partner of Lightrock, commented: “I want to extend my grateful thanks to our investors for their confidence in and support of our mission. This is Lightrock’s third successful fund close in little over a year and it represents a resounding endorsement of our mission to scale impact investing.”