Montréal-based venture builder and investor Diagram Ventures has launched a ClimateTech Fund, securing nearly $50 million CAD in commitments as part of its initial closing.
Diagram’s new cleantech-focused venture capital (VC) fund will launch and invest in early-stage technology startups developing solutions to help tackle climate change and reduce emissions. According to Diagram, the fund will help build and back startups developing “capital-efficient digital solutions that accelerate the global transition to a more sustainable future.”
Diagram’s ClimateTech Fund marks the latest in a group of new cleantech-focused Canadian VC funds rolled out in recent weeks.
These commitments put Desmarais family-connected, Sagard-backed Diagram close to its target of $60 million total for the ClimateTech Fund.
The fund is anchored by Sagard and the Québec government, through Investissement Québec. Its other major limited partners (LPs) include Mavrik (the family office of Mark Pathy), Fondaction, and CDPQ-financed Fonds québécois d’amorçage Teralys. The ClimateTech Fund also counts several undisclosed individual investors among its LP base.
The ClimateTech Fund will be co-led by partners Amélie Foz-Couture and Paul Manias. Foz-Couture is a longstanding Diagram partner who has led the firm’s venture creation activities for the past five years. Manias is a cleantech expert who joins Diagram from Climate Innovation Capital, a fund he co-founded that came out of ScaleUp Ventures and focuses on later-stage decarbonization investments. Before that, Manias worked with the Ontario Municipal Employees Retirement System as a managing director in its infrastructure and private equity groups.
The fund will leverage Diagram’s existing venture creation model to identify market opportunities, construct founding teams, and mitigate risks through strategic partnerships. It will also finance early-stage companies sourced through Diagram and Sagard’s network, with a focus on Québec businesses.
Diagram conceives, launches, and backs tech startups by providing capital, hands-on support, and connections to partners. Since 2016, Diagram has launched and invested in 23 companies, including Breathe Life, ClearEstate, Dialogue, Nesto, and Novisto. To date, Diagram has focused largely on FinTech startups. Earlier this year, it launched its latest FinTech with a first close of $100 million.
Diagram’s ClimateTech Fund marks the latest in a group of new cleantech-focused Canadian VC funds rolled out in recent weeks. Last week, BetaKit reported the launch of Active Impact Investments’ third, $120-million climate tech seed fund, while earlier this week, fellow Vancouver-based VC firm Spring Impact Capital announced its own $20-million fund, which will also focus on early-stage firms, with an eye toward cleantech and healthtech companies.
According to Crunchbase, Canada has been moving up the global cleantech ranks this year, and the country is on track to top 2022’s record-setting totals this year.
New cleantech incentives from the Government of Canada and the United States bode well for the ecosystem. Still, startups in the space have not been immune from current market conditions, and the recent Sustainable Development Technology Canada funding pause has made things more difficult for early-stage cleantech companies across the country.
Feature image courtesy Diagram Ventures.