Climate tech VC fund, Systemiq Capital has today announced a near €70 million first close of its second fund, which is targeting about €200 million. The Fund is dedicated to backing early-stage climate tech entrepreneurs, accelerating the transition to a resilient, clean and just global economy.
The climate tech space might want to cool the planet down, but it’s an area that is hotting up. As governments, global organisations, businesses and local communities all rally together to sway the tide of climate change, climate tech and innovations helping to protect our planet, are a growing priority for investment and it seems the cash is flowing.
Today, Systemiq Capital has announced the first close of its fund at over €69 million. The latest venture by Paul Polman, Jeremy Oppenheim, Systemiq and Irena Spazzapan, Sqystemiq Capital is offering ‘capital for systems change’. Fund II is building on the success of Fund I which was launched in 2018.
Investors to date for Fund II include Lombard Odier, Andre Hoffman, The Grantham Foundation for the Protection of the Environment, Dara Holdings, Deutsche Post Foundation, Stephen Brenninkmeijer, Mark Cutifani, Erik Fyrwald and Chad Holliday.
Building on climate tech expertise
Systemiq Capital is an investment platform that is driving forward impact investment. It operated on a model that goes beyond cash, bringing capital, expertise and network to climate tech founders and innovators – aiming to help them scale at speed and effect real change.
It is led by Paul Polman, Jeremy Oppenheim and Irena Spazzapan – all bridging their own climate background to the fold. Polman led consumer goods giant Unilever until 2019, where he increased investor returns by 300% while ensuring the company consistently ranked #1 in the world for sustainability each year. He also served on the High-Level Panel that developed the UN Sustainable Development Goals. Meanwhile, Oppenheim, a former World Bank Economist and experienced angel investor, built and led McKinsey’s global climate practice for over a decade, and founded the system-change company, Systemiq. Spazzapan, a former Goldman Sachs commodities executive, has built the early-stage investment practice at Systemiq.
While Systemiq Capital is fully independent, it is able to draw on the wider investment and climate tech ecosystem. This enables portfolio companies to access deep knowledge of the trends shaping the sector, gives them enhanced support in navigating complex regulatory environments, and, helps forge strong relationships and connections.
Paul Polman said: “We are finally starting to see momentum for a cleaner, fairer, more resilient economy build across business, in finance, among governments and in wider society, and the big question is how can we accelerate these shifts? Making sure the best climate tech innovations are ready and available is key.”
Climate Fund II
What makes this fund particularly interesting is its promise to go beyond merely cash and contacts – the staple diet of investment funds. There have been plenty of big funds in Europe, but they all seem to be following similar patterns and lacking in substance that can make a real difference to startups – especially for early-stage teams wanting long-term success.
This fund however promises to plug innovators into an unparalleled ecosystem of global business leaders, policy-makers and climate experts, to deliver outsize financial returns and climate impact. It is dedicated to backing early-stage teams that have the vision and capability to build the systems underpinning a healthier planet and stronger economy.
It has an inherently Europe focus and will link fast-growth climate change innovators with its global network of corporates, policy-makers, and follow-on investors to allow early market adoption. It supports companies which, if scaled, can drive systemic change in four areas at the heart of the fight against climate change: sustainable food and materials, clean transport, climate intelligence and finance, and climate restoration.
Existing portfolio companies include those working in synthetic biology and regenerative land use, new chemistries driving low carbon materials; direct and indirect electrification of transport; AI, geospatial analytics and next-gen computing solving for climate; carbon removals and biodiversity restoration.
Paul Polman explained the unique approach of the fund: “From developing the home chargers that are essential for getting people into electric vehicles, to pioneering short haul hydrogen flights, these are the start-ups that can catapult our climate ambitions while securing exceptionally healthy returns. But in order to grow, these businesses need more than ‘cash and contacts.’ Systemiq Capital offers its entrepreneurs, it’s investors and humanity a tremendous alignment. In sectors where you have established demand from the market, established need for the planet, and governments and regulators are setting the direction of travel, we bring capital, acumen, expertise and connections. All driven by a shared hunger for systems change”.
Time is now for climate action
It has been widely acknowledged that every aspect of the global economy will need to undertake an unprecedented, rapid transition to more sustainable ways of operating over the next decade in order to avoid the worst effects of the climate crisis. The United Nations Intergovernmental Panel on Climate change has warned that there are less than 10 years to halve global GHG emissions in order to stay under two degrees Celsius. To implement this, it’s estimated that trillions of euros in investment into decarbonisation are needed this decade alone to get on the road to net zero.
However, the innovation is there. Startups across Europe are pioneering new innovations and ideas to help accelerate a climate revolution and it’s exciting to witness. Funds like this one are part of the puzzle in helping us get to a healthier, more sustainable planet.
Irena Spazzapan said: “The level of talent and innovation among climate tech entrepreneurs right now is immense but we know that, as they face the challenges of commercial scale up, their network of experts, advisors, peers and policy-makers can be as vital as the financing. Systemiq Capital is uniquely placed to identify outstanding early-stage companies and position them in this wider eco-system for success. We are thrilled at the appetite we’ve seen for Fund II. This is capital for systems change, and the strong message from our backers is that we’re filling a major gap in the investment landscape, and it is overdue.”
Track record of success
From changing the course of the aviation industry to mapping and monitoring businesses’ impact on biodiversity and enabling the futureproofing of physical assets against climate change risk, portfolio companies from Fund I are already creating fundamental systemic change for the benefit of the planet.
Portfolio companies include the likes of ZeroAvia, which is pioneering short-haul hydrogen aviation to displace aircraft powered by fossil fuels. Systemiq Capital supported the team to secure their first R&D grant from the UK government and attract further investment across the US and Europe. There’s also Nature Metrics, which established the world’s largest environmental DNA database enabling businesses to better monitor the impacts of their work on biodiversity and the natural world. It was supported to become the lead monitoring partner for the UN-led Global Fund for Coral Reefs and brought into a consortium to participate in the Xprize Rainforest.
Jupiter Intelligence is an additional portfolio company that’s scaling fast. The startup, which helps industries understand and mitigate the risk climate change poses to their physical assets, was supported with its impressive European and Asian expansion and the launch of a free model for developing countries.
Rich Sorkin, founder and CEO of Jupiter Intelligence said: “Systemiq Capital became one of Jupiter Intelligence’s premier strategic investors 3 years ago. We’ve benefited immensely from Systemiq’s network and introductions to new corporate clients on both sides of the Atlantic. The Systemiq team was also instrumental with the Jupiter Promise, helping us frame the story and funding our services to help low-income countries better quantify, and ultimately address, their physical exposure to climate risk. The team is a joy to work with.”
