Unveiling the Rise of New Climate Tech VC Firms and the Reinvention of Existing Giants
SET Ventures, a prominent Dutch sustainable energy technology firm, has recently closed its fourth fund at a whopping €200 million, twice the size of its previous fund. This new capital injection will be channeled into 20 to 25 European startups dedicated to making renewable energy more mainstream.
The success of SET Ventures can be attributed to its long-standing commitment to investing in climate-focused startups in Europe, coupled with its article 9 status that mandates a dedication to sustainability. This has attracted significant interest from both corporate and institutional investors. However, managing partner Anton Arts is cautious about the potential pitfalls of managing a larger fund, which could lead early-stage startups astray from their core expertise.
To mitigate this risk, SET Ventures plans to focus on making more deals within their niche rather than venturing into unfamiliar territory. Their sweet spot lies in Series A investments, where they typically provide initial funding ranging from €2 to €5 million. One recent example is their investment in German digital heat management startup Vilisto, which raised a €5 million Series A round.
While the size of their investments remains consistent, SET Ventures has evolved its investment thesis to prioritize digital technologies that are crucial for a carbon-free energy system. This strategic shift sets them apart from other climate-focused firms like World Fund, which emphasizes hardware solutions. Arts believes that software innovations are key to achieving urgent climate goals, as they enable automation and scalability.
SET Ventures remains open to investments in hardware-focused companies, provided that the technology is scientifically sound. Their portfolio company, Instagrid, which specializes in enterprise-grade portable chargers, recently secured a $95 million Series C funding round. Arts emphasizes the importance of addressing high-upside challenges in software development, particularly in reaching a broader audience through automation and AI.
The founders of SET Ventures, René Savelsberg and Wouter Jonk, were early pioneers in the clean energy space when they established the firm in 2007. Arts, who joined the team seven years ago, draws parallels between the current energy transition and previous technological advancements he witnessed in his VC and software career since the nineties. He highlights the value of founders with diverse expertise applying their knowledge to climate startups, driving innovation and momentum in the sector.
As the landscape of clean energy startups evolves, SET Ventures has expanded its reach beyond the Netherlands to Germany. With a larger fund at their disposal, they aim to broaden their geographical coverage and support more founders working on sustainable solutions. This strategic approach positions SET Ventures as a key player in the ever-growing climate tech VC ecosystem, poised to make a significant impact on the future of renewable energy.
In conclusion, SET Ventures' investment strategy underscores the importance of focusing on digital technologies to drive sustainable innovation in the energy sector. By staying true to their niche and leveraging their expertise, they are well-positioned to support groundbreaking startups and contribute to the global shift towards a greener future.