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Emerging GP joins GIC, Temasek, BlackRock in chemicals deal

Carbon Direct Capital Management joins Singaporean heavyweights for a $350m funding round in a low-carbon chemicals company.

Carbon Direct Capital Management, an emerging GP, has invested in a low-carbon chemical producer in a $350 million funding round led by Singaporean sovereign wealth fund GIC and asset management firm Baillie Gifford.

The investors were joined by Singaporean state-owned investment company Temasek and funds managed by BlackRock in backing Solugen, a Houston-based chemical company. Two venture capital firms, Refactor Capital and Fifty Years, also participated in the round.

Carbon Direct Capital Management is the fund management arm of Carbon Direct, which also includes an advisory business that works with companies, such as Microsoft and Shopify, on managing their carbon commitments. Carbon Direct Capital Management declined to comment on fundraising. The group has announced three other investments so far.

Solugen produces chemicals using processes that are less carbon-intensive than conventional methods. For example, it produces glucaric acid, a chemical used widely as an industrial cleaning agent, using glucose-based feedstocks derived from biomass products such as enzymes. Jonathan Goldberg, CEO of Carbon Direct, told New Private Markets that Solugen’s glucaric acid product can use 80 percent less carbon than phosphate based incumbents while also selling at a competitive price.”

Temasek is an active impact investor. After its landmark $500 million commitment to impact fund manager LeapFrog Investments, a spokesperson for Temasek told affiliate title Private Equity International that it planned to deploy more capital across leading impact vehicles. According to PEI data, Temasek has since invested in Brookfield’s Global Transition Fund and the second fund from Main Sequence Ventures, a deep tech VC with a sustainability bent. Temasek has also invested directly in plant-based meat company v2Food.