Corporate involvement is proving to be a foundational building block of the renewable revolution. It is central to providing long-term demand signals through offtake agreements for sustainable aviation fuel (SAF). Many are also actively engaging in the developmental stages by committing capital and industry expertise.

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This is the proposition of Climate Tech Partners (CTP), a Sydney-based venture capital firm set up by Patrick Sieb and Tom Kline.

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The firm’s series A venture capital fund focuses on the energy, transport, industrials and mining sectors. SAF is a core focus area as it sits across both energy and transport.

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“Everything we do has to have a climate-positive lens, but it’s more of a filter, all our investments focused on returns. And that really resonates with people. So we get a broad set of interests. Clearly strategic corporates are interested. We’ve also got institutional money very interested,” Sieb tells SAF Investor.

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The firm has 17 corporate partners which act as the bedrock to their portfolio companies.

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“Involving corporates directly or indirectly through CTP gives a lot of validation and something that later-stage capital sees as a major positive,” explains Sieb.

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The expertise corporates bring to the table helps both investor and founder.

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“The thing that’s really interesting is they [corporates] have made us realise that to get the SAF market up and running, it wasn’t just going to be technology and offtake contracts. You need a whole ecosystem,” highlights Sieb. “You need feedstock, you need energy, you an infrastructure, you need construction, you need financing.”

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Corporates in the SAF space don’t come much bigger than aircraft OEM Airbus and Australian airline Qantas. These act as strong partners for SAF-focused investments for Climate Tech Partners and as such have created a dedicated SAF ‘sidecar’ fund of $15m.

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“It definitely provides us with deep industry validation and insights and access to internal technical and commercial expertise, for example, being able to bring up people at Airbus and understand what it takes to have a new SAF pathway go through,” adds Sieb.

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Both Airbus and Quantas have their own dedicated strategic investment vehicles. Airbus is the anchor investor in the Sustainable Aviation Fuel Financing Alliance (SAFFA), a fund that has $200m committed from seven partners. The company also acts as and advisor to project developers such as DG Fuels in Louisiana, US. Quantas has also established its own A$400m decarbonisation fund, with A$100 dedicated to SAF.

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Being able to have portfolio companies benefit from corporate involvement was critical and informed Climate Tech Partner’s decision to raise for a series A fund.

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“The key element is that they’re sufficiently mature to engage with corporates. That tends to mean that the technology is largely de-risked, so there’s no more science risk. You have a strong founding team in place with the right structures and they tend to have a mature product.”

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Sieb goes on to explain that whilst not directly deciding investment decisions, corporates play a vital role in the due diligence phase. Diving deep into understanding what are the key parameters that are important to customers, how it needs integrate with existing systems and infrastructure and crucially how much they are willing to pay. Fundamentally, the solutions that solve these problems effectively will be successful.

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Post investment, active engagement between the startup and the corporate will aim to develop into potential offtake and customer relationships, which are vital to receiving later stage capital.

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Debt providers will look fondly on projects that have been nurtured by strong corporate engagement. This is exactly what Climate Tech Partners is trying to encourage.

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