ETF Partners has closed its third Environmental Technologies Fund at £167 million, aiming to grow the most innovative companies in the UK and Europe.

Since its launch 14 years ago, the London-based firm has backed high-impact, high-potential companies in digitally-led sustainability.

Investing at Series A and beyond, with the capital to support companies as they scale through multiple funding rounds, this third fund has already supported companies in fields such as smart mobility, ethical cyber security, microbiome artificial intelligence software, and energy efficient data centres.

ETF Partners analyses each potential investment through an impact scorecard that, unlike traditional metrics more suited to large established companies, assesses the future impact potential of innovative companies, based on attributes such as alignment with UN Sustainable Development Goals, financial performance and environmental policies.

ETF’s third fund was raised from a combination of existing and new limited partners, including British Patient Capital and the European Investment Fund.

Catherine Lewis La Torre, chief executive at British Patient Capital, said: “Tackling the climate emergency while also sustaining economic growth is critical - we find in ETF Partners a compelling approach to investing sustainably in a way which leverages key trends such as the accelerated adoption of digital technologies."

Patrick Sheehan, managing partner at ETF Partners, said: “One impact of COVID-19 has been to propel us into a new, digital age, another has been to make us think about the world we now want to build, and how to make that world resilient and sustainable to address the challenges of climate change.

"Throughout this crisis, many digital companies have proved themselves to be robust, and they are also ‘scalable’ – able to grow fast in relatively capital efficient ways," he continued, adding: "By harnessing the right digital tools, the world can move quickly to achieve both sustainability and prosperity; that’s where we invest."

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