Toronto-based venture capital firm ArcTern Ventures has successfully raised $335m for its Fund III, exceeding the initial target of $300m.

The announcement highlights the firm’s appeal to major investors dedicated to addressing climate change and sustainability challenges globally. Flagship limited partners, including TD Bank Group, Allianz, Church Pension Group, OPTrust, Credit Suisse Asset Management, and other significant institutional investors, have joined in the funding.

This accomplishment reinforces ArcTern’s position as one of the largest climate tech venture funds globally, with offices in San Francisco and Oslo. The oversubscription of Fund III underlines investor confidence in ArcTern’s mission to invest in breakthrough technology companies contributing to climate solutions.

Focused primarily on North American and European markets, ArcTern emphasises deploying funds to maximise greenhouse gas (GHG) emission abatement over the fund’s lifespan.

The firm conducts meticulous evaluations of potential environmental impacts before committing to investments. Specifically targeting early growth-stage companies, particularly those undergoing Series A or B funding rounds, ArcTern selects ventures with the highest potential for GHG avoidance.

Arctern Ventures co-founder and managing partner Murray McCaig said: “We are investing across North America and Europe in mission-driven founders who understand that if you’re not rapidly scaling revenue, you’re not having climate impact, and the world needs scaleable decarbonisation solutions today, not decades into the future.”

As part of its commitment to transparency and accountability, ArcTern’s Fund III is registered as an Article 9 fund under the European Union’s Sustainable Finance Disclosure Regulations. This designation subjects the fund to a set of climate impact criteria, ensuring quantification and verification of investments’ offset emissions.

Fund III’s investment focus will centre on technology companies driving innovation in renewable energy, clean mobility, circular economy solutions, sustainable food and agriculture, and industrial decarbonisation.

ArcTern Ventures managing partner Marc Faucher said: “Spanning diverse geographies and industry verticals, we keep a close eye on the world’s most promising climate startups to ensure that we’re maximising the utility of our funds.

“As former founders and operators ourselves, we partner and collaborate with bold and innovative startup teams that align with our impact-driven mission.”