S2G launches $300m venture credit vehicle

Fund principal Andrea Woodside said there is need for ‘a different type of capital’ in climate tech to complement VC and private equity.

Venture capital specialist S2G Ventures has launched a $300 million credit vehicle that will invest across the capital spectrum through debt, equity and hybrid investments.

The Special Opportunities fund will target food, agriculture, ocean and clean energy companies that sit under the ‘climate tech’ umbrella.

The fund has flexibility around risk profile, tenor, structure and focuses on businesses with assets, cashflows, contracts, or leases to provide downside protection.

“The transition to a more resilient and efficient economy will require significant investments in capital-intensive and asset-oriented businesses,” said S2G senior managing director and chief investment officer Sanjeev Krishnan. “Instead of a friction to scale, we see this as an opportunity to ringfence risk, create value for investors and provide a solution the market increasingly needs.”

Special Opportunities fund principal Andrea Woodside added: “There is a need for a different type of capital in the climate tech market to complement venture capital and private equity. “The Special Opportunities fund is grounded in helping companies with creative financing solutions to support them in scaling as efficiently as possible.”

The vehicle has already made six investments, one of which is into Service 1st Financial – a financial technology and training company that provides home comfort services such as heating and cooling.

“This capital allowed us to make high-value investments in our operating infrastructure, as well as efficiently fund our rapidly growing portfolio of consumer lease contracts on energy-efficient home comfort equipment” said Anuj Khanna, founder and CEO of Service 1st Financial.

S2G added that the fund has also “invested in a number of portfolio companies and themes across asset finance. Some of these strategies include next-generation infrastructure financing through controlled environment agriculture and renewables development projects, natural assets investments that support conservation, investing in the gray-to-green transition by helping incumbent companies decarbonize their supply chains, and opportunities to take creative views of collateral.”

The vehicle has also backed low-density polyethylene recycling company Circulus, which converts plastic waste into post-consumer resins for use in commercial and industrial applications.

S2G has $2 billion in assets under management. The firm closed its Oceans and Seafood Fund on $100 million in 2020.