As the European Investment Fund commits €250 million with five equity funds to mobilize €2.5 billion of climate action and environmental sustainability investment across Europe, early-stage investment firm Antler VC has revealed a record year of climate investment. Climate tech is now firmly on the European investment agenda.
The omnipresent climate crisis continues to loom over us and every single day we are hearing about more dire consequences and implications that are affecting people each second. From extreme weather patterns which impact lives and businesses to fuel and food shortages, people and habitats are already suffering.
As the world’s population tops 8 billion, we have to face the facts (facts which we should have faced a long time ago) – our society isn’t sustainable. The way our economy operates and society functions contribute to this climate catastrophe and we have almost run out of time to stop the worst effects. An urgent change in how we fuel our homes and cars, how we eat and produce food and how we generally approach life needs to be taken.
It’s very easy to say ‘let’s take action’, though, and a much different thing to actually do it. As global leaders met this month for COP27 and discussed how to work together to tackle this ballooning problem and protect our planet, innovators across Europe have been hustling and developing tech-based solutions that might just be the key.
European VC prioritizing climate tech
In this context, Europe’s VC and startup community have been working collaboratively to bring about innovative and promising solutions – and recent reports are showing record-breaking commitments to climate innovation.
EIF to support €2.5 billion of climate action investment
On the back of COP27, Europe has clearly placed climate tech at top of the priority list, and it seems that money is being put on the table. What we want to know, is how and where this money will be spent.
The EIF has committed €250 million with five equity funds to mobilize €2.5 billion of climate action and environmental sustainability investment across Europe. It’s going to the following funds:
- €28 million to the Growth Blue Fund I, a private equity fund focusing on the blue economy, and sustainable economic activities relating to the oceans. It will mainly invest in Portuguese small and medium companies across all sectors.
- €30 million to PureTerra Ventures, a water technology early growth fund, which invests in small and medium enterprises across the European Union scaling game-changing technologies to radically alter the usage, conservation and treatment of water. PureTerra is the first-of-its-kind specialist water-focused fund in Europe and the first water-focused investment in the EIF’s venture capital portfolio.
- €39 million to the Zintinus Fund I, a venture capital fund focused on growth-stage investments in sustainable food innovation across Europe, in particular alternative proteins, functional food, clean nutrition and food waste reduction.
- €75 million to the SUMA Capital Climate Impact Fund III, an infrastructure fund targeting greenfield energy transition and circular economy projects predominantly in Spain.
- €75 million to the Eiffel Transition Infrastructure Fund, an innovative fund designed to provide equity bridge financing for renewable energy infrastructure assets in Europe.
It’s certainly a strong signal of support supporting climate tech innovation and promising developments that can make a real difference to our planet and society. Freeing up such extensive amounts of capital to visionary entrepreneurs is a positive step forward, and the approach of disseminating amongst various climate-focused VC funds is a promising way to encourage growth of the wider ecosystem and ensure the money is managed and spent correctly. We’ll definitely be keeping an eye on the funds going forward.
EIF Chief Investment Officer Alessandro Tappi said: “Contributing to the European Union’s green transition agenda is a top priority for the EIF and the EIB Group. This has become even more important and urgent given the current energy crisis. We are therefore very happy to invest in five equity funds that will make a crucial contribution to the energy transition in a variety of sectors, from water to food and infrastructure. Signing these commitments at COP27 sends a strong market signal that investing in green business models and technologies is possible and vital to our common future.”
Record levels of VC invested in climate tech
Aside from this, there are also private VC firms getting involved in climate action – and it’s been a record-breaking year.
Antler VC: Supporting a new generation of climate entrepreneurship
Antler VC was launched with a vision to support sustainable businesses that solve meaningful problems, drive innovation, and improve lives. It’s just revealed that 2022 has been a record year in terms of its investment into European climate tech and sustainable startups.
Throughout the year, the firm invested in 17 European startups developing tech or products to improve sustainability and address climate change. This is the equivalent to an investment into a climate-related startup every 2.5 weeks throughout the year – making 2022 the first year when Antler has backed climate tech startups more than any other sector.
While climate tech innovation and investment is growing across the entire continent, the Nordics are firmly leading the way – quickly establishing itself as a global hotspot for this space. Antler’s conveniently located offices in Stockholm, Oslo and Copenhagen are helping nurture this ecosystem.
Michael Wiatr, Partner at Antler, said: “Antler has already made a record number of investments into climate tech and sustainable startups across Europe this year – reflecting the rise of a new generation of climate tech founders across the continent. Nowhere is this more pronounced than in the Nordics, which are emerging as a global capital for climate innovation.”
This trend reflects the extent to which the world’s best talent is gravitating towards climate tech and sustainable innovation. Amidst the global context of energy shortages, extreme weather conditions and food shortages, many of the founders supported by Antler have swapped highly successful careers in finance, consulting or within tech unicorns to pursue entrepreneurial ambitions that allow them to prioritize addressing climate change.
Anne Tutar, Partner at Antler, comments: ”We are seeing an unprecedented influx of highly skilled entrepreneurs and inventors dedicating themselves to innovations that will make a difference in the fight against climate change. With demand increasing from consumers and businesses for sustainability, there has never been a better time to become a climate tech founder and create a startup that is directly addressing climate change.”
The portfolio includes startups using space-enabled tech to track carbon (e.g AIRMO), air cooling towers to remove CO2 from the atmosphere (NeoCarbon), and energy companies producing hydrogen electricity (Hydrologiq & HYMETH) or battery storage (Evyon & Geniess). In addition, it has backed startups that are pursuing carbon neutrality – including reusable home cleaning products (Homethings), carbon-neutral beauty and nail products (ARKIVE & Glaize) and sustainable fashion marketplaces (Spun & Sustie).
Climentum Capital: Putting transparency into climate investments
One of the stand out problems with the climate tech space is greenwashing and the prevalence of buzzwords.
It seems that almost every business is ‘sustainable’ and ‘going green’ these days. But how do you actually monitor and check that? There are a range of platforms, and startups, coming up with ways of accurately tracking data around carbon emissions and environmental impact, but greenwashing and false claims and empty promises are still a norm rather than an exception.
Climentum Capital launched a climate tech fund this summer, armed with €150 million. Operating out of the hubs of Copenhagen, Berlin and Stockholm, the fund has put a mass reduction in carbon at the centre of its focus, prioritizing investment sin, NextGen Renewables; Food and agritech; Industry and Manufacturing; Buildings and Architecture; Waste and Materials.
The firm, alongside the capital, introduces the Sustainable Finance Disclosure Regulation (SFDR) to improve transparency in the market for sustainability investing, aiming to prevent greenwashing. As part of the due diligence process, each investment is subject to a scientific climate impact assessment and once onboarded, each venture is closely monitored and evaluated to ensure that the climate impact actually comes about.
Climate tech fastest growing vertical
Through VC funds, government commitments and wider societal advocacy for climate action, the European climate tech ecosystem is lighting up. It’s now doubled its value since 2020 and is worth over €100 billion.
We all know how serious the climate crisis is, that’s something we don’t tend to reiterate. Finally, it seems that action is being taken and not just spoken about. We just hope it’s on time and genuine.
Exciting climate funds we’ve reported on this year:
- Climate.VC: Launched in March to invest €41 million over the next three years. The fund will take an impact-first investment strategy, looking for net-zero founders that are too often overlooked by traditional VC.
- Planet Fund: A venture launched by collaboration between Sky and Founders Factor to champion early-stage entrepreneurs with planet-positive tech, raising about €116 million
- Kiko Ventures: London-based firm launched as a €427 million platform in June dedicated to climate tech innovation, and became a world-first evergreen cleantech venture investor.
- Systemiq Capital: Launched its second fund, targeting €200 million to back early-stage climate tech entrepreneurs, accelerating the transition to a resilient, clean and just global economy.
- Satgana: Launched a new fund with a targeted close of €30 million to support the next generation of impact entrepreneurs.
- Lightrock: Closed an oversubscribed Climate Impact Fund at €860 million in October, planning to back companies fueling innovation that will solve the climate challenge.