Despite the tight fundraising environment overall, Canadian cleantech companies continue to secure investments as CarbonCure and Orennia raise over $100 million USD, combined.
Halifax-based CarbonCure, which develops tech to store captured carbon emissions in concrete, announced an $80-million USD investment round this week, as Calgary analytics startup Orennia closed a $25-million USD Series B round.
CarbonCure’s investment round was led by Swiss firm Blue Earth Capital. It also saw participation from global investors in the cleantech and energy spaces, including Amazon’s Climate Pledge Fund and Microsoft’s Climate Innovation Fund. Samsung Ventures. Breakthrough Energy Ventures, Taronga Ventures, and BH3 Growth Equity, 2150 also contributed.
”The global clean growth race has just begun.”
Investors in Orennia’s Series B financing include Wellington Management, Quantum Energy Partners, NGP, Veriten, and Tupper Lake Partners. Michael DeLucia, sector lead for private climate investing with Wellington, and Jeffrey Harris, partner with Quantum Energy Partners, are joining Orennia’s board of directors.
Orennia, which provides commercial analytics to help businesses with their energy transition, is backed by other firms that invest in sustainable energy, including NGP, Veriten, and Tupper Lake Partners. The startup previously raised an undisclosed amount of Series A funding in 2021.
Orennia and CarbonCure are the latest companies in the cleantech space to secure capital as the sector continues to prove itself to be a bright spot amid the tech funding downturn.
The Canadian Venture Capital and Private Equity Association reported in February that venture capital investments in cleantech and AgTech have remained resilient. Cleantech achieved its first $1 billion year, surpassing the record it set in 2021 by 52 percent. The CVCA forecast that the growth trend will continue throughout the year.
Canada’s approach to fostering growth in the commercialization stage for its clean innovation sector has been met with criticism, however. Compared to the United States (US), industry executives say Canada’s support has been “too narrow or not robust enough.”
US president Joe Biden signed the Inflation Reduction Act (IRA) into law in August 2022. It is meant to reduce carbon emissions and encourage green transition among consumers.
The IRA offers sizable tax credits for clean energy manufacturing and provides incentives aimed at lowering consumer energy costs, such as tax credits on purchasing electric vehicles.
While the US pumps billions into the clean energy sector, experts have argued that Canadian regulators have been dragging their heels, causing homegrown innovation to migrate south.
The Boston Consulting Group found that only 17 percent of Canadian climate tech investor dollars remain in Canada, with the vast majority flowing into the United States.
Canada’s cleantech sector has the potential to meet the global demand, according to leaders in the industry.
RELATED: Canada is falling behind on cleantech as capital and companies flee south
Though the federal government’s 2023 budget presents a “huge win” for the clean economy, including several funding initiatives, Canada Cleantech Alliance’s Maike Althaus and Venbridge’s Bryan Watson wrote in a joint article for BetaKit that “Now is not the time to stop investing in Canada’s clean economy. The global clean growth race has just begun.”
After the IRA was passed, Orennia revealed a partnership in November with FlexGen, which offers controls and energy storage capabilities across the US. Orennia said this continues its market presence expansion, extending its analytics platform to the battery-storage market in the US.
For its part, CarbonCure said it plans to use the “full range of benefits” of the act with its systems installed across the US. “We look forward to collaborating with our many partners—including concrete producers, architects, engineers, contractors, carbon credit buyers, and building owners.”
Featured image courtesy CarbonCure.