About the Fund
Fund summary
The MaRS Cleantech Fund is privately-backed $30 million fund that provides early-stage funding to companies developing next-generation cleantech breakthroughs with deep IP, global markets and a capital-lean business model. We have developed a strong pipeline of opportunities through our strategic relationship with the highly successful MaRS Discovery District.
We have invested in next-generation biofuels, grid-scale energy storage, home energy automation, waste recycling, distribution grid sensors and next-generation lighting substrates.
Opportunity and challenge
In a market economy, if you solve a big problem you get a big reward. We target solutions to some of the most significant global challenges of this century. The global demand for clean and sustainable technologies will grow, fueled by rising energy prices, the need to rapidly constrain carbon emissions, and resource scarcity.
Within this sector, the greatest investment opportunity lies in providing early-stage capital for emerging companies. However, few funds have the ability to capitalize on early-stage deals because the resource commitment per deal is too high, and it’s difficult to generate a large enough pool of opportunities from which to select tomorrow’s winners. The Fund unlocks this opportunity through its experienced management team and its relationship with MaRS.
About MaRS and MaRS Cleantech
MaRS is a globally recognized innovation centre located in the heart of Toronto’s technology community. MaRS has served over 1,200 companies since its launch in 2006. The MaRS Cleantech Practice currently serves several hundred clients, of which a select portion can be classified as strong investment opportunities.
Advantages of the MaRS Cleantech relationship
Our relationship to MaRS Cleantech provides an unmatched pipeline of deal flow and ongoing support to market. MaRS Cleantech attracts the majority, if not all, of the most promising cleantech startups in the region, and is able to quickly evaluate technologies and determine those with the strongest commercial potential.
MaRS Cleantech sits at the centre of a global cleantech network, which includes major corporate partners, utilities and later-stage investors. This gives us good visibility into downstream finance and market risks, which we mitigate with relevant milestones and strong strategic partners. By investing in emerging deal flow from MaRS Cleantech, the Fund will be able to overcome many of the challenges associated with early-stage investing.
Investment strategy and execution
The Fund will focus on early-stage cleantech companies that meet the following criteria:
- Capital efficient
- Able to reach a meaningful milestone with an investment of $1–3 million
- Have strong intellectual property and a large global market opportunity
- Strong management teams or a willingness to build a strong team
- Have strong gross margins and a rational valuation
The investment team will identify these companies early in their development and will use this advantage to move quickly on relationship-building with entrepreneurs, due diligence and investment decisions.
The investment team will seek to act as lead investor in these early-stage companies, and will take a hands-on management approach with portfolio companies to mitigate early-stage risks.