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Eight - yr - old Diagram is expanding its startup brooder model into climate .
The Montreal - free-base speculation studio , which launches startup in sign , produce $ 80 million CAD ( $ 58 million ) for its fourth studio investment company , Diagram Climate Tech Fund . The house say the vehicle surpassed its initial $ 60 million CAD ( $ 43 million ) target , hit its hard chapiter , and is the studio apartment ’s first fund focused on clime .
Amélie Foz - Couture , a Diagram cooperator and conscientious objector - promontory of Diagram ’s Climate Tech Fund , told TechCrunch that Diagram blend in deep into different industry , spending several months at a fourth dimension on a category to identify pain in the ass point and a core set of customers for a likely root .
“ Then we bring on founding teams only once the chance is really validated , ” Foz - Couture said . “ There is a eminent bar for what makes it into a company . We invest in the best thought that follow out of that cognitive operation . ”
Foz - Couture said this work is meant to give the startup ’s eventual bridge player - take founding team a point beginning . Diagram formally incorporates these companies and provide capital , akin to a pre - seed round ; a roster of likely customers the house has relationships with ; and some wireframes around the product . After that , inauguration can turn to Diagram for financing and steering but are largely on their own and more like the traditional relationship between an investor and a portfolio troupe .
Now the startup incubator need to practice the manakin to build climate startups . Paul Manias , a Diagram partner and conscientious objector - headland of the firm ’s climate fund , severalize TechCrunch that the timing was right to establish a fund in this category . While the Diagram squad had a passion for climate tech , their LPs started to get interested in the blank , too .
The business firm was able-bodied to rear cap from investors , include its parent fellowship Sagard , Investissement Québec ( a Quebec authorities - backed investment vehicle ) , BDC Capital , and Teralys Capital , among others .
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LP interest in climate remains strong despite overall fundraising headwinds , according to PitchBook data point . clime - focused VCs set a raw fundraising record for the sphere in 2022 , having raised $ 18.7 billion across 64 funds in 2022 . While 2023 notch a obtrusive diminution , $ 3.9 billion was raised in entire , 2024 is on track to outgo last year with climate VCs raising $ 3.4 billion in the first one-half of 2024 alone .
Diagram is focused on building capital - lean digital solution in the climate distance across all climate category ranging from galvanic vehicles to biodiversity and food and agriculture . Manias said that the firm is focusing on software package because SaaS business are a better fit for Diagram ’s speculation example than , say , a inscrutable technical school moonshot project .
He also thinks there is a lot of opportunity in climate software . “ The reality is we require both , ” Manias said regarding hardware and software package mood solutions . “ The way we are pass to tackle one of the most experiential problems we face today is really around allocating cap to all resolution . We require deep technical school solutions for certain , but frankly software solutions are implementable and aid to address a stack of the challenges that companies face on a sidereal day - to - 24-hour interval basis . ”
Diagram has already startle building two startups under its climate thesis . Relion is one that offers a chopine for procedure and maintenance result for EV charging infrastructure . It was founded in 2023 and Diagram has since led the company ’s $ 3 million come rung . The other is of late launched Lyteflo , an electric vehicles sale enablement solution focalize on barrage sprightliness .
Diagram was founded in 2016 as an former - stage speculation arm of global asset manager Sagard . The house has more than $ 400 million in asset under management and has built 25 companies in house in sectors like fintech and web3 . The firm has also discover four way out .
