Many startups have hit a wall after the first few funding. The problem is particularly severe for startups specializing in industrial-scale hardware, including many climate technology companies, as capital requirements are so large.
Infrastructure funds have filled that gap for a long time, but many are reluctant to jump into climate technology.
Some companies believe it writes up opportunities. ARA Partners recently raised a $800 million infrastructure fund focusing on reducing carbon emissions in the industrial sector.
The ARA initially targeted $500 million, the company told TechCrunch, but it saw strong support from new and existing investors from around the world, including pension funds, insurance companies, donations, basics and sovereign funds.
The new fund has already made three investments, including Ireland-based domestic organic waste recycling and biofuel terminal developers. The fund’s decarbonization strategy focuses on reusing existing assets for new low-carbon development.
This important funding arrives at the time of political uncertainty regarding the decarbonisation of the United States, but its economics become clear. Many companies have been able to reduce the costs of low- and zero-carbon technologies in recent years, gaining competitive costs with existing approaches.
For example, ARA previously invested in Divert through one of its private equity funds. The company will donate still good foods and, for non-edible foods, convert waste into biogas that can sell or use electricity and heat locally. Compared to alternatives, sending waste to landfills that produce methane contamination – Divert’s approach makes a lot of sense environmentally and financially.
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The investment company said it will announce its fourth investment under the strategy “soon.”