Climate investment fund Wollemi Capital raises $220m, enters CBA alliance

Climate specialist investment firm Wollemi Capital has completed one of the country's largest Series A capital rounds of 2023 to date after raising $220 million, underpinned by an equity investment from the Commonwealth Bank of Australia (ASX: CBA).

Named after the critically endangered Wollemi pine tree that is in the same family as Bunya and Hoop pines, the firm was co-founded in 2021 by Macquarie Capital's former global head Tim Bishop and the former Asia head of Boston Consulting Group's corporate venturing unit, Paul Hunyor.

The news comes as Australian climate tech startup founders aim to almost triple raisings across the sector to $1.5 billion over the next 12 months, according to a recent report from Climate Salad.

Wollemi initially had a target to raise $100 million, but a strong market appetite for high-quality climate investment strategies led the firm to more than double that figure.

The firm invests in the businesses and projects vital to supporting the global transition to net zero, with a growing team spanning Sydney, New York, Seattle and San Francisco.

Wollemi’s co-founders see a once in a generation opportunity to build a climate specialist investment firm of institutional quality, global scale and generational impact. The funds will go towards further scaling the team - now comprising 16 staff - in North America and Australia, continued investment from the balance sheet, and accelerated development of a funds management business.

"We are climate specialists. We only invest in businesses that reduce greenhouse gas emissions,” says Wollemi co-founder and managing director Tim Bishop.

"But a key point of difference is our ability to invest in the emerging parts of the climate space. We do that by being hands-on partners to our portfolio companies, bringing technical and operational expertise matched with flexible and patient capital."

Last year Trawalla Group, the investment vehicle of Alan Schwartz AO and Carol Schwartz AO, made a US$35 million cornerstone investment in Wollemi. Alan is also a member of Wollemi’s board, while Carol’s current board roles include the Reserve Bank of Australia and the Climate Council.

For Alan Schwartz and the Trawalla team, investing in climate solutions is not only an urgent global necessity but also “the greatest commercial opportunity we have ever seen".

"We concluded there was a market opportunity for a pure-play climate specialist with a truly end-to- end offering and an integrated strategy," he says.

"So we looked for a world-class team with an established track record. Between Paul’s venture capital experience and Tim’s exceptional career at Macquarie, they are uniquely well positioned to deliver that integrated strategy."

Alongside Trawalla are institutional investor University of Sydney, multigenerational single family office, Cambooya Pty Ltd, and a number of Australia’s most prominent private equity and venture investors.

Bishop says the proceeds from the raise will continue to be invested into thematics the co-founders believe in.

"We are excited by the opportunities that are rapidly emerging in food, agriculture and natural capital, among others. We’re already world-class on natural capital and the decarbonisation of agriculture, so that’s been an early focus for us," he says.

This is reflected in Wollemi’s initial investments, which include Pachama, a nature-based carbon credit platform. Pachama utilises AI, satellite imagery, remote sensing and machine learning technology to measure the carbon stored in forests, bringing a new level of integrity to forest conservation and reforestation projects.

Wollemi also co-led the US$75 million Series B funding round for Loam Bio with Lowercarbon Capital. Loam has developed a biological seed coating for use by crop farmers which not only improves soil health and yield but allows them to bind additional carbon in the soil, creating a second form of income.

"We’re excited to work with Wollemi. In addition to capital, Wollemi bring a genuine depth of knowledge in developing, deploying and scaling climate solutions, which they have already used to help us accelerate our growth," says Loam CEO Guy Hudson.

Most recently, Wollemi participated in the US$16.5 million Series A of agtech startup Pluton Bio, which is focused on unlocking the potential of microbes to create improvements in soil fertility, pest and disease control in addition to greater carbon sequestration.

Wollemi co-founder and managing director Paul Hunyor welcomes the partnership with CBA.

"This alliance is all about bringing together the agility and focus of Wollemi’s specialised climate investment platform with the scale and network of Australia’s largest bank," Hunyor says.

"Corporate and customer demand is driving the net zero transition, and an alliance between CBA and Wollemi helps us better connect emerging climate solutions to that demand.

"A critical element of decarbonisation at scale is bridging emerging climate technologies to corporate and customer demand. The strategic alliance with CBA will allow our portfolio companies, helped by our team of climate investment experts, to connect much more effectively to growing corporate demand for carbon solutions."

CBA group executive for institutional banking & markets, Andrew Hinchliff, says the strategic investment in Wollemi is intended to accelerate the innovation needed to drive Australia’s transition across key sectors, as well as develop carbon markets as an important transition tool.

"It will significantly contribute to the development of CBA’s climate, carbon and biodiversity expertise and our ability to play a leadership role in supporting investments in climate linked businesses as they scale their operations," Hinchliff says.

"This investment will enable CBA and Wollemi to collaborate on a broad range of initiatives aligned to the bank’s commitment to play a leadership role in Australia’s transition and ambition to help our customers reduce their emissions.

"Wollemi’s highly credentialed founders have strong networks and proven track records combining climate impact, private equity and venture capital expertise with experience financing, building and scaling global business across infrastructure, renewables and technology."