Royalty-backed Lightrock packs $834 million into its first climate fund

Lightrock, the London-based backer of neobank Niyo and “wood modification” company Kebony, has secured about $834 million (€860 million) for a new fund focused on climate tech. The private equity and venture firm plans to pump the money into startups in areas such as clean energy, decarbonization and sustainable agriculture.

Lightrock will write checks as small as $10 million, and up to around $39 million, for sustainability focused startups in Europe and North America, the firm said in a statement on the fund. Back in May, it also announced a $300 million fund aimed at startups in Latin America.

Lightrock has ties to royalty through a web of subsidiaries, which means the money it raised likely wasn’t too tricky to find. The firm is owned by LGT, which makes investments for rich people and institutions. LGT’s owner is the royal family of Liechtenstein, which has ramped up its environmental and social impact investments since that really big tax scandal.

LGT promotes itself as being focused on sustainability, and to its credit, the firm has taken steps to limit its climate impact. Still, it hasn’t walked away from fossil fuels.

LGT invests in oil and gas producers, so long as they are “strongly committed to the energy transition and have low revenues from oil and gas production.” LGT’s policies also permit investments in business that earn revenue via thermal coal (limited to up to “5% of their total revenues as of January).

Lightrock says the money for its climate fund comes from investors such as LGT, some of LGT’s clients, the Grantham Foundation and Temasek, which is a holding company owned by Singapore. Temasek’s portfolio includes significant gas and oil holdings, which drive climate change.