With six deals already under its belt, the sustainability focused investment firm Ecosystem Integrity Fund has closed its third investment vehicle at its $100 million target.
Investments in the third fund include EV Connect, an electric charging company; eMotorWerks, the charging demand management software and service provider acquired by Enel; solar mounting company, Pegasus Solar; the water management company, Opti; and Flying Embers, a probiotic adult beverage company.
Investing in disparate sectors like consumer-focused wellness and organic brands and utility-focused software and services may seem like strange portfolio bedfellows, but the portfolio addresses a key issue for early-stage investment firms, which is following where money gets spent.
The San Francisco-based firm, led by managing partners James Everett and Devin Whatley, with partners Geoff Eisenberg and Sasha Brown, formed after the managing partners left their roles at the boutique investment bank Aquillian.
EIF launched its first fund in 2011 with $19.6 million under management and returned 1.84 times the capital invested in the fund with a 34.4% net internal rate of return to limited partners. Its second fund raised $57 million and backed six portfolio companies.
“We seek to invest in areas that have not received sufficient investor attention,” said James Everett, managing partner, Ecosystem Integrity Fund, in a statement. “The movement toward environmental sustainability is making incremental improvements to the largest industries in the world. Sustainability is fundamentally about making things better: more efficient, more functional, less toxic, less costly.”
Overall, sustainability focused investments or investments in clean technology are gaining ground again after years of languishing. Last year, global venture capital and private equity investment jumped 127% to $9.2 billion, the highest since 2010.
And some of the biggest opportunities exist in an investment category that was largely unexplored by the first wave of clean tech investors. In the years since clean technology’s initial boom in the mid-2000s, investments focused on health and wellness and sustainable food production have surged.
Recent examples include the blockbuster public offering for Beyond Meat and that trend is even reflected in the largest dollar value exit for EIF, an over $200 million sale of the beverage maker Kevita to Pepsico.
“What we can do is change consumer preferences,” says Eisenberg. “We can get people to stop eating things that have unsustainable ingredients.”