CTC #66 - ArcTern Ventures lands $450M for third climate fund

Hey there,

Welcome to another issue of Climate Tech Canada! One upside of this week’s cold snap - the Rideau Canal finally opened for skating again. I got to dust off the skates for the first time since unseasonably warm weather cancelled last year’s season.

A quick plug for any future hardtech founders - check out Action // Potential by my friend Rami Alhamad. Engineer turned startup founder, Rami breaks down the world of patents and shines a light on hidden gems coming out of research labs.

This week in climate tech:

• ArcTern Ventures landa $450M to deploy climate solutions

• B.C. plans for the future with $36B grid investments

• Nexii looks for a sale after cash crunch

Let’s go!

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💰 Funding: ArcTern closes $450M fund to drive near-term impact

Climate tech veterans ArcTern Ventures raised $450M for their third climate tech fund, the largest raise for a Canadian venture fund in recent years. The fund is backed by large institutions like TD Bank Group, Church Pension Group, Credit Suisse Asset Management and others.

Unlike other VC funds that focus on new technologies going from 0 to 1, ArcTern’s thesis is all about deployment and impact. They back companies that combine existing tech, materials or know-how in new ways.

The reason for this thesis? A laser focus on driving down emissions, aiming for impact that “happens over the next 10 years”.

Portfolio companies include HydroStor, a compressed air long-duration energy storage company, Clir, a renewable energy intelligence platform, and most recently Soly, a Netherlands-based solar installation startup.

Other funding

🛫 Azure Sustainable Fuels received $13.4M in funding from the Canada Infrastructure Bank and Natural Resources Canada to develop a production site for their sustainable aviation fuels.

☀️ Recurrent Energy, a subsidiary of Canadian Solar, landed a $500M equity investment from BlackRock’s Climate Infrastructure business. The investment represents 20% ownership. Recurrent is Canadian Solar’s project development arm, and the funding will help it transition to also be a long-term owner and operator.

📈 Milestones & growth

🚫 Nexii Building Solutions entered creditor protection and is pursuing a sale, citing significant liquidity constraints. Nexii was valued at $2B less than two years ago, but now owes more than $109M and is unable to raise additional capital after expansion efforts in the U.S.

🍱 Reusables.com is powering a reuse initiative with Metro, Sobeys, Walmart Canada in Ottawa to demonstrate the viability and scalability of reuse models.

🛠️ Rise, an online marketplace for sustainable home renovation materials, is aiming to raise $3.8M in angel and VC funding. Rise hit break even in its second year with $3M in revenue.

💨 Deep Sky added Germany’s Greenlyte Carbon Technologies as a project partner and will install their direct-air-capture technology at Deep Sky’s Alpha Lab facility in Quebec. Greenlyte captures CO2 with salts and turns it into concentrated CO2 and hydrogen.

🧪 Future Fields produced the first-ever prolactin protein derived from a commercial fruit fly expression system. The hormone can be used to develop cultivated milk products.

🗞️In the news: B.C. goes big on grid upgrades

What happened: British Columbia announced new investments in the province’s grid totalling $36B over 10 years. That’s a 50% increase over previous plans, and will focus on electrification, low-emissions infrastructure, and accelerating clean energy approvals for industry.

The driver: Grids across the country are facing strains, including record energy demands from extreme temperatures, a growing population and housing, and industrial customers that want clean energy. Some provinces have also put off investing in their grid capacity over the years in order to keep electricity costs low.

The new plan includes initiatives like:

• Transit electrification

• New high voltage transmission lines

• Expanding substations near new residential developments

• A “one-window” process to speed up approvals

The industrial switch: The plan has a focus on industrial emissions, as the province tries to manage a switch-over that is happening across the country. Industry makes up 40% of the province’s emissions, so the government needs to drive those down to meet B.C.’s net-zero targets. At the same time, access to clean energy is quickly becoming a key requirement for industry to make new investments as they aim to hit their own emissions targets.

🗞️ In other news:

• Battery producer Northvolt paused work on its new Quebec factory while it waits for a court ruling that could suspend work indefinitely. An injunction was filed due to potential impacts on nearby wetlands.

• The feds announced $59.6 million over five years for existing programs to expedite research work that will help communities adapt to climate change through codes and other tools.

• Buckle up: online climate deniers are changing their tactics, attacking the credibility of climate solutions and experts instead of climate change as a whole.

📣 What’s going on

📅 Sales for Climate Businesses: Hosted by Impact Zero, this in-person event will explore how to prospect, qualify opportunities and close deals for climate companies. Jan 31st, Toronto.

📅 EV Innovation & Technology Conference: A one-day conference bringing together the best and brightest industry leaders who are transforming electric vehicle manufacturing in Canada. Feb 7th, Toronto.

📌 Featured Roles

💨 Senior Software Engineer at Mangrove Systems (Remote)

🏗️ Chief Financial Officer at Intelligent City (Hybrid in Vancouver, BC)

🧪 Formulation Chemist at Lite-1 Bio (Burnaby, BC)

📊 Sales Development Representative at Manifest Climate (Hybrid in Toronto, ON)

➡️ Hiring? List your posting here.

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Justin