S2G Ventures – a leading multi-stage investment firm focused on the food, agriculture, ocean, and clean energy markets – announced the launch of a $300 million Special Opportunities fund to provide flexible financing for companies focused on creating positive long-term social and environmental impact. This fund round brings S2G’s assets under management to $2 billion.
S2G’s Special Opportunities fund works with companies to find financing solutions to fit their unique needs. And the fund has flexibility around risk profile, tenor, and structure and enables the firm to invest across a wide spectrum via debt, equity, or hybrid investments with a focus on businesses with assets, cashflows, contracts, or leases to provide downside protection. And the Special Opportunities fund enables S2G to support more mature companies in their scaling journey, providing them with a lower cost of capital that is aligned with their risk profile.
The new funding round benefits from the domain experience across the firm’s existing team and portfolio, which includes over 90 innovative companies across the food, agriculture, oceans, seafood, and clean energy sectors, spanning five countries, and includes companies at various stages of growth, from seed stage to public markets.
Through the management of a historical real assets and credit portfolio and the new Special Opportunities fund, S2G has invested in a number of portfolio companies and themes across asset finance. And some of these strategies include next-generation infrastructure financing through controlled environment agriculture and renewables development projects, natural assets investments that support conservation, investing in the gray-to-green transition by helping incumbent companies decarbonize their supply chains, and opportunities to take creative views of collateral.
S2G has already made 6 investments out of the fund, most recently in Circulus – which is a low-density polyethylene recycler that converts plastic waste into post-consumer resins for use in commercial and industrial applications, enabling the circular economy and making CPGs’ supply chains more environmentally responsible. And through the fund, S2G has also invested in Service 1st Financial, a financial technology, innovation, and training company that is transforming the way home comfort is purchased and sold in the United States. In an example of the opportunities enabled by the fund, Service 1st Financial is going to be able to scale its energy efficiency deployments using debt invested via a special purpose vehicle, allowing the parent company to be capital efficient with its equity dollars.
Along with individual transactions and platform investments, the Special Opportunities fund has the ability to create new companies to take advantage of market white spaces like Clear Frontier, a business S2G helped create to capitalize on the supply-demand gap in the U.S. around organic grain. This fund looks forward to identifying other market white spaces and creating joint ventures and new companies to fill those gaps.
KEY QUOTES;
“The transition to a more resilient and efficient economy will require significant investments in capital-intensive and asset-oriented businesses. Instead of a friction to scale, we see this as an opportunity to ringfence risk, create value for investors and provide a solution the market increasingly needs. The Special Opportunities fund expands our toolkit, builds on the subject matter expertise of our sector funds and enables S2G to work with companies across the broader climate tech market.”
— Sanjeev Krishnan, senior managing director and chief investment officer at S2G Ventures
“There is a need for a different type of capital in the climate tech market to complement venture capital and private equity. The Special Opportunities fund is grounded in helping companies with creative financing solutions to support them in scaling as efficiently as possible.”
— Andrea Woodside, principal, Special Opportunities fund
“When Service 1st began exploring paths to efficiently capitalize the business for growth, S2G’s Special Opportunities fund provided a compelling combination of debt and equity capital. This capital allowed us to make high-value investments in our operating infrastructure, as well as efficiently fund our rapidly growing portfolio of consumer lease contracts on energy-efficient home comfort equipment. We are grateful for S2G’s support and look forward to expanding the relationship in the years to come.”
— Anuj Khanna, founder and CEO of Service 1st Financial
