Ecotone Partners, a climate-focused advisory firm, has officially entered the investment ring, pulling in an A$25 million first close for its new Planet Fund. The firm is targeting what it calls the "missing middle" of climate tech: capital-intensive companies with proven technology that are often too asset-heavy for traditional venture capital and not yet established enough for private equity or debt providers.

The Planet Fund is carving out a niche as Australia's first combined debt and equity fund specifically for climate ventures.

While many VCs are happy to back software-based climate solutions or deep-tech R&D projects, companies that need cash to build and deploy actual hardware often get left out in the cold. Ecotone argues that these businesses, which have commercially ready tech and a clear path to profitability, are a massive, overlooked opportunity.

"The Planet Fund meets a critical funding gap, between a company’s R&D phase and when they’re operating at scale, profitably," said Ecotone Partner Nicole Kleid Small. "A combination of debt and equity, provided by an investor with specialised understanding of climate tech, is required to help companies cross this chasm".

The fund is backed by a notable list of investors, including Wollemi Capital Group (the family office of Tesla chair Robyn Denholm), Tripple (the Milgrom family office), Understorey Ventures, clients of multi-family office Argus Advisory, and seasoned climate investor John McKinnon. It has also secured support from LaunchVic's VC Support Fund.

The fund's hybrid structure is its core differentiator. It provides equity for a stake in high-growth opportunities like renewable energy and the decarbonisation of transport, agriculture, and waste. Simultaneously, it offers debt to finance capital-intensive hardware, with that debt secured against the company's physical assets.

This model also offers a different proposition for its own investors. Unlike typical VC funds with long lock-up periods, the Planet Fund is open-ended, offering investors half-yearly redemptions after three years and regular cash distributions from interest payments on its debt investments.

"Our anchor investors resonated with our investment product; while we target double-digit IRR, we also give investors an annual cash yield and the ability to redeem their units after 3 years," said Ecotone Co-founder and Director, Amanda Goodman. "Investors value getting de-risked exposure to Australia’s climate tech companies, while retaining flexibility and liquidity".

The Planet Fund has already made its first move, leading a mixed equity and debt investment into the National Renewable Network (NRN). NRN's model is to partner with energy retailers to install solar panels and batteries on homes with no upfront cost to the resident.

The retailers lease the hardware from NRN, selling the cheaper energy to residents and trading any excess power back to the grid. This investment is a textbook example of Ecotone's thesis: a capital-intensive business with physical assets and a clear revenue stream aimed at immediate emissions reduction.

Small also emphasised the urgency driving the fund's strategy, noting the "time value of carbon".

Ecotone Partners itself began four years ago as a firm advising climate companies on raising capital before identifying this specific market gap. The Planet Fund is led by

Key investor Argus Advisory stated its confidence in the team's ability to navigate the complex sector. "In Ecotone we see a fund manager who combines the acumen to identify lucrative investment opportunities... with the commitment to initiatives that will accelerate the transition to a more sustainable future".