A whole lot of money is pouring into green infrastructure these days, including the Biden administration’s $1 trillion, climate-focused infrastructure bill in the United States and the $22 billion green infrastructure plan in Canada. Some of the world’s biggest investment firms are angling for a piece of that market, but so are a lot of smaller, newer players.
The latter group includes Spring Lane Capital, a private equity firm that finances sustainable infrastructure solutions across a handful of industries. Founded in 2017 and headquartered in Boston and Montreal, Spring Lane specializes in a “Catalytic Project Capital” approach that pairs start-up equity for small-scale projects with additional growth capital to support partners at the corporate level.
The idea is to help newer companies and products transition to bigger (and cheaper) sources of capital that tend to favor mature, scalable platforms.
Its most recent round came in November when it raised about $151 million for its second private fund. That followed an inaugural private fund in November 2019 that raised $157 million.
For its second fund, Spring Lane hopes to raise a total of $400 million. The money will be used for a couple of different purposes: to back entrepreneurs and project developers in sustainable infrastructure sectors, and allow Spring Lane to expand its team and geographical footprint.
“We believe the sustainability market for private equity has never been stronger, and that there’s significant interest from a wide array of institutional investors,” Spring Lane Capital Co-Founder and Partner Rob Day said. “In our opinion, investors are eager to find sustainable solutions to our biggest infrastructure and climate challenges that are designed to offer an attractive risk/reward profile.”
Most of the capital raised in Spring Lane’s first fund has already been committed. The fund’s first four investments – Atlas Organics, Aries Clean Energy, Cambrian Innovation, and 7 Generation Capital – are heavily weighted toward the sustainable waste sector. Here’s a look at what the companies do:
- Atlas Organics collects and composts food and other organic waste and turns it into a soil amendment to promote sustainable agriculture and landscaping.
- Cambrian Innovation designs, builds, installs, owns, and operates wastewater treatment solutions on behalf of industrial customers.
- Aries Clean Energy designs, builds, and operates gasification systems that sustainably dispose of organic waste, generate clean energy, and produce carbon-rich biochar.
- 7 Generation Capital mobilizes institutional capital to connect fleet owners with electric vehicle technology.
At the end of last year, Spring Lane announced two more investments: Vandalia Growers USA, an indoor farming platform that will grow specialty tomatoes in controlled environment greenhouses; and the launch of a renewable fuels development platform that will convert animal waste into renewable natural gas to be used as an alternative transportation fuel in California.
“Along with the other investments we have made from our first fund, and the strong entrepreneurial activity in the sustainability sector in general right now, our belief is our second fund is coinciding with a period of exciting action around climate and sustainability solutions,” said Christian Zabbal, Spring Lane Capital’s Managing Partner and Co-Founder.