Active Impact Investments raises C$70m for Fund III

Canadian VC firm Active Impact Investments will target investments in sustainable food and water start-ups for its third fund.

Active Impact Investments, a Canadian climate-focused venture capital fund manager, has raised more than C$70 million ($51 million; €47 million) for its third fund.

The Vancouver-based firm said that new investors in the vehicle include co-anchor Northleaf Capital Partners through its Canadian venture capital strategy, Co-operators Corporate Venture Capital Fund and Deloitte Ventures.

It has also secured re-ups from existing investors Fondaction and the University of Victoria for the fund, which has a target of C$120 million.

AII was founded in 2018 and focuses on early-stage investments in North American climate tech start-ups. The firm said in a statement it has invested in 31 companies to date, all of which are still operating, and has exited three of those via acquisitions, with a fourth exit pending.

Its latest third fund will continue its strategy of investing in those types of companies, with the aim of making a further 20 investments. In particular, it is searching for investments in the sustainable food and water sectors, alongside other target sectors including the circular economy, clean energy and transportation, infrastructure and carbon solutions.

Mike Winterfield, founder and managing partner of AII, said in a statement that he was pleased with the success of the fundraise so far given wider fundraising challenges.

“Many funds aren’t raising right now because of the difficult market and the economic pinch many are feeling. Our ability to fundraise in these tough conditions is beneficial for our investors since it helps us get access to more deals at better valuations, and from the founders’ perspective, it makes a bleak environment more hospitable for growth,” he said.

“But most importantly, the climate doesn’t care that markets are down. Climate change is accelerating faster than ever and continuing to fund solutions is both necessary, and a huge wealth creation opportunity. Just because something is hard doesn’t mean it isn’t worth doing.”

Daniel Sinclair, vice-president of corporate development and head of Co-operators Corporate Venture Capital, said in a statement: “We see climate change as a direct and imminent threat to our ability to deliver on our purpose. We are excited to collaborate with a partner like Active Impact that prioritizes resilience alongside profitability and is driving climate action through strategies we support in our other investments and operations like circularity and sustainable food systems.”

Fondaction said it saw the investment as a chance to “amplify our impact” as the fund’s investment priorities overlapped with its own, while Northleaf Capital Partners said it believed the fund “can deliver attractive returns while having a positive impact on our planet.”