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These days climate investing is hot \u2013 if you will pardon the awful pun \u2013 but the days of just raising a fund and calling it \u201cclimate focused\u201d are well and truly over. The market is sorting out the \u201cwheat from the chaff\u201d and if a VC fund can\u2019t prove that it can back-up its thesis with hard science \u2014 I mean, this is about the climate, after all \u2014 then it would be much less likely to see the success or the returns it is setting out for.<\/p>\n
That\u2019s essentially the thinking behind new European climate fund Planet A Ventures<\/a>. <\/p>\n The firm has now has closed its first fund at \u20ac160M to back founders tackling the world\u2018s largest environmental problems. The Germany-based VC aims to take a novel \u201cscience-based\u201d approach. It has engaged a full science team, to which it will hand the power of veto over investment decisions. <\/p>\n The in-house science team will conduct \u201clife cycle assessments\u201d as part of its due diligence into a startup. If startup the fund is looking to back doesn\u2019t have a significant positive impact on the environment, then the deal won\u2019t go through. <\/p>\n Investors in the fund include BMW, KfW Capital (a large development banks), REWE (one of the largest German retailers), the Danish state\u2019s investment fund Vaekstfonden\/EIFO and serial entrepreneurs such as Rolf Schr\u00f6mgens (Trivago), Maximilian Backhaus (HelloFresh) and Rubin Ritter (Zalando).<\/p>\n So far the fund has already invested in 14 early-stage green-tech startups to date.<\/p>\n By comparison, the first fund for Pale Blue Dot (in Sweden) was \u20ac87m, Norrsken VC has \u20ac100m to play with, and 2150 VC launched in 2021 with a $240m fund.<\/p>\n That means Planet A Ventures has come out with one of the strongest offerings in European climate VC to date. <\/p>\n The founders of Planet A are former Angle investors Tobias Seikel and Nick de la Forge, former entrepreneurs Fridtjof Detzner and Christian Schad, and Christoph Gras, who previously co-founded the Tomorrow Bank. Additionally, Lena Thiede is an expert in climate and biodiversity research and policy. <\/p>\n Fridtjof Detzner, Founding Partner at Planet A told me via email: \u201cIt\u2019s early stage and it\u2019s hardware and software. We do we have a full fledged science team on board. We will only do things which are scientifically proven to be better, and we will also publish those findings.\u201d<\/p>\n \u201cWe will look at two angles: The normal VC angle and the scientific angle and only if both sides give us thumbs up will we invest. This will hopefully win us a lot more deals because that evidential approach is obviously also helpful to generalist funds,\u201d he told me.<\/p>\n He says the climate emergency is getting worse: \u201cWe do have an all hands on deck situation right, regarding theclimate. We see there is an enormous opportunity to shape future industry, so we will only invest in companies which will make a really significant difference.\u201d<\/p>\n The in-house science team will look at things such as material flows, emissions, but also biodiversity protection, resource savings, and waste reduction. <\/p>\n \u201cOur scientific assessments allow us to understand how much better an innovation is compared to the status quo. This in turn enables us to identify the winners of the massive economic transformation that we are seeing,\u201d said Lena Thiede.\u00a0<\/p>\n Some sectors Planet A will look at will include agriculture, forestry and food; construction and real estate; energy and heat; manufacturing; transport and mobility; water, waste and remediation. Initial ticket sizes range from \u20ac0.5-3M.<\/p>\n The current portfolio includes Makersite<\/a> (decarbonisation tech, used by Microsoft and P&G; GA Drilling<\/a> (plasma drills); C1<\/a> (green methanol production); 44.01<\/a> (carbon storage technology, backed by Breakthrough Energy Ventures).<\/p>\n<\/p><\/div>\n