Silicon Valley has gotten fantastically efficient at funding apps, SaaS and developer tools. It turns out, though, that climate change cares a lot less about bits, bytes and stored procedures -- it's a lot more analog than that. Along comes Evok Innovations and its clean-tech fund, aiming to plow money into companies that are working toward decarbonization on the industrial side of things. The fund has closed the first half or so of its $300 million goal.
"We are one of not too many [funds] that have a very specific focus on industrial utility-scale, with a particular emphasis on hard tech," says Marty Reed, founding partner at Evok Innovations. "I certainly think digital [solutions] have the ability to make everything better, but at the end of the day, you've got to produce and distribute power and energy. Generally, that requires steel going in the ground and copper being run and then all of that being optimized. It's a bit of a niche we've carved out and we've been focused on that."
The firm raised money from a veritable who's-who of Canadian financial institutions, including some Reed wasn't able to name on the record. The ones that are announced, however, are Export Development Canada, Royal Bank of Canada and The Toronto-Dominion Bank. In addition, LPs include investors into its previous fund, Suncor Energy and Cenovus Energy.
The fund will target early-stage investments across North America in key industrial decarbonization verticals, including carbon capture use and storage (CCUS), low-carbon fuels, clean energy and grid innovations, mobility, advanced materials and circularity.
Launched in 2016 through a partnership between Suncor, Cenovus and the BC Cleantech CEO Alliance, Evok’s inaugural $100 million CAD fund aimed to accelerate the development of critical energy transition technologies across North America. The fund has made 16 investments in critical decarbonization technologies ranging from clean hydrogen and carbon-to-value to long-duration energy storage.
"[Investment in climate] has started to shift in the last two years. You've seen the rise of funds like Lowercarbon Capital -- I don't think anyone would confuse Chris Sacca for a hard tech investor, and now he's announced not only hard tech, but a very specific subset; a new fund dedicated to direct air capture. You just would not have seen that two years ago."
Evok sees investing in big industrial plays as part of the opportunity; the potential acquirers in this market are titans of industry with deep pockets, which makes the l likelihood of exits a lot greater.
"Think about the large equipment suppliers that have historically supplied utility and energy companies," Reed suggests. "That's what we think will be the very likely acquirers have a big chunk of our portfolio."