Reinvesting in innovation: How TRaCE’s Seed Fund keeps climate startups growing
A $1.7 million Early-Stage Seed Fund launched by the Trailblazer for Recycling and Clean Energy (TRaCE) is giving clean energy and recycling startups the financial support they need to move from lab research to commercial readiness, creating a new cycle of reinvestment and collaboration between universities and venture capital firms.
The Trailblazer for Recycling and Clean Energy (TRaCE) has introduced a $1.7 million Early-Stage Seed Fund aimed at helping startups and scale-ups in the clean energy and recycling sectors take their next steps toward market.
The fund tackles one of the toughest points in a climate startup’s journey — the so-called “Valley of Death”, where high development costs and limited market proof make it hard to attract investors. Many early-stage companies stall at this stage because their technology, while promising, has not yet demonstrated commercial traction. TRaCE’s Early-Stage Seed Fund addresses this by providing targeted investment for activities such as prototype development and early-market testing, helping startups attract later-stage capital and move closer to market readiness.
The fund is part of a broader effort to turn Australian research into viable commercial outcomes. By funding key milestones, TRaCE aims to build a stronger pipeline from discovery to deployment, supporting technologies that could contribute to a cleaner and more circular economy.
The fund is delivered in partnership with venture capital firms Investible and Hampton Capital, bringing together university research expertise and private investment experience. It marks one of Australia’s first examples of a university and VC collaboration designed specifically for climate deep tech startups. As part of this model, TRaCE and its partners co-invest in selected startups through a buy-back mechanism that allows returns to be reinvested into future ventures. This creates a self-sustaining funding cycle rather than a one-off investment approach.
“This partnership not only amplifies our investment capabilities but also enhances the pathways for startups to access vital resources and markets. Together, we are creating a robust ecosystem that de-risks climate technologies,” said Charlie Ill, Chief Executive Officer at Investible.
The fund also represents the first reinvestment seed model for an Australian university, allowing TRaCE to recycle financial returns back into new early-stage companies. This structure aims to build long-term sustainability in how university research translates into commercial solutions.
For startups involved in TRaCE programs at UNSW or the University of Newcastle, the Early-Stage Seed Fund offers a direct opportunity to secure financial backing and advisory support from experienced venture partners.
The initiative is part of the broader $280 million TRaCE program, established by the Australian Department of Education and delivered jointly by UNSW and the University of Newcastle. TRaCE’s mission is to bridge the gap between academic research and commercial outcomes in recycling and clean energy — two priority areas within the national Modern Manufacturing Strategy. By supporting innovation at all stages, TRaCE aims to strengthen Australia’s manufacturing capability and support the transition to a net zero economy.
Applications for the TRaCE Early-Stage Seed Fund are now open to eligible startups and scale-ups developing solutions in recycling and clean energy.
