(Bloomberg) -- Lightrock, the London-based private equity firm, has closed a €860 million ($835 million) climate impact fund, its first investment pool for companies working to reduce carbon emissions.

The initial €600 million hard cap was oversubscribed after getting demand from backers, including anchor investor LGT Group and its private banking clients, Swedish pension fund Forsta AP-Fonden and the Grantham Foundation, the firm said in a statement. Lightrock’s climate fund will back later-stage startups in Europe and North America.

“The climate strategy was quite a natural thing for us to do because, first of all, we had been doing these type of investments for a number of years,” Chief Executive Officer Pal Erik Sjatil said. “The world now finally takes this appropriately seriously, which means that more and more R&D money is coming in, more and more early-stage money is coming in.”

Venture capitalists are pouring increasing sums into startups that aim to cut emissions, amid rising demand from investors to back sustainable companies. While indexes tracking stocks that meet criteria on environmental, social and governance issues have dropped in line with the broader market this year, Sjatil said one cause for optimism is that investors are now treating sustainability as almost “a separate class.”

Lightrock has raised more than $2 billion in the past year, including this fund. The group closed a Latin American fund in May and raised $900 million for the Lightrock Growth Fund I last year, it said. 

Lightrock previously backed companies including insurance-technology firm Wefox and urban farming company InFarm, according to its website. 

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