For Artesian to be named by Climate50 as one of the most impactful global climate investors is wonderful recognition for our innovative portfolio startups, supportive investors, and for Artesian's broader commitment to achieving both impact and financial returns, However, as anyone working to support Climate Tech knows, there is much more to do - we are just at the beginning of a transformational, innovation and technology led, global energy transition.
When I first started working on Artesian’s Clean Energy Seed Fund four years ago, it was the only dedicated early-stage VC Fund in a nascent, relatively immature, Australian clean energy innovation ecosystem. There were small clusters of innovation emerging, evidenced through the launch of accelerator programs like EnergyLab and funds such as the Clean Energy Finance Corporation’s Innovation Fund. Clean Energy focused startups, and committed investors, were however, few and far between. Even in much larger international markets, ClimateTech was not a focus for traditional Venture Capital firms, many of whom were burnt by failures during the first wave of Climate Tech investment in the early 2000s.
It was only as recently as 2015 that Bill Gates launched Breakthrough Energy Ventures alongside a number of well-known private investors, reigniting the push towards ClimateTech as both an impact and financial investment opportunity. Just one year later, the Paris Agreement was signed in an attempt to keep the increase in global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels. The drive towards clean energy solutions from world leaders and the scientific community, was compounded by new commitments from governments, countries, cities, business, industries and both public and private investors.
Today, Google has vowed to run its operations on carbon-free energy by 2030, Apple to be carbon neutral by 2030 and Microsoft to be carbon negative by 2030. Joe Biden’s Presidential win and the Democrat’s control of the senate will put a particular light on climate issues over the next four years with the administration targeting net-zero emissions in the US by 2050. In Australia, we are now seeing announcements from incumbent mining and resources players like Andrew Forrest announcing a plan to build the country’s first green-steel pilot plant. Climate Tech is rapidly moving into the mainstream and has matured enormously in the last five years, with awareness creating a global call to action.
According to PitchBook, there has been USD 286 billion invested in Climate Tech companies since 2011, with USD 7.2 billion invested in 2020 alone. During my time in this space, I have seen Australia’s ClimateTech ecosystem space grow, with our country now recognised globally as a launchpad for startups to pilot their technology due to our natural resources, uninhibited land and export infrastructure. Overseas investors and corporates have started looking to Australia for opportunities in this space due to our emerging competitive advantage.
Artesian launched our first Clean Energy Seed fund in 2016, with thought/market leaders such as CEFC, Australian Ethical, Future Super and Hostplus making capital commitments. Over the past four years, the Clean Energy Seed Fund (and other Artesian funds) have made investments in over 60 companies that are reducing the cost of renewable energy, delivering clean energy solutions to consumers via new business models, converting waste to energy or finding new ways to sequester carbon.
Artesian portfolio startups (see illustration below) like rapid solar deployment company 5B, which received investment from US energy corporate AES, and wind turbine monitoring system PING are expanding globally, underlining the demand for Australian technology to solve climate related issues. Evergen’s software is supporting the creation of virtual power plants, with an aim to kill coal-fired power stations in more than 10 countries. Southern Green Gas is piloting their technology at an APA gas hub in Queensland to create renewable methane (being an effective hydrogen carrier) and methanol.
In a short period of time, we have seen the cost of renewable energy reduce drastically, to allow for new innovations. Over the next five years, I expect to be talking about technologies we are yet to name – the pace of progress in this space is building hope.
If you would like to support the efforts of our awesome portfolio companies who are addressing a sustainable energy transition please UPVOTE Artesian on the Climate50 website
About the Author:
Ali Clunies-Ross is a member of the VC investment team at Artesian. She is the Portfolio Manager for Artesian's Clean Tech investments from seed stage through to Series B.
Ali joined Artesian in 2017 and has a Bachelor of Commerce from The University of Sydney and a Master of Business Law from The University of New South Wales.