Speedinvest launches EUR 80m Climate & Industry Opportunity fund

The fund has held a first close on EUR 45m and expects to hold a final close in Q2 2022.

Speedinvest took the decision to raise the fund in response to the development of its portfolio and the opportunities available to these companies, lead industrial technology general partner Marie-Helene Ametsreiter told Unquote. "We have already been investing in climate tech and industrial tech startups for about three years," she said. "We have a portfolio with some really successful companies – they are raising Series B and beyond, but we can't finance this with our seed fund. We want to continue to invest in the best ones."

Positive environmental impact and ESG are at the heart of the strategy, Ametsreiter explained, given the role that the industrial technology sector plays in both of these areas. "This is not an impact fund, but we feel that industry and climate technology go hand in hand – the industrial sector is responsible for 30% of carbon emissions globally, so it also plays a significant role in fighting the climate crisis."

The VC has been working on its own ESG policies for some time, which feeds into investment due diligence, she added. "We have been establishing our own ESG framework and we see this as a duty for seed investments in young portfolio companies. We give our companies a questionnaire on how they see ESG and how they want to contribute in future as part of our pre-investment due diligence."

Establishing an ESG policy can help startups further down the line, according to Ametsreiter. "We also help our portfolio companies to report ESG data, in partnership with Planetly. If you build this right from scratch, it is much easier later on. We want to prepare our companies for follow-on rounds where investors will ask about ESG data and KPIs."

Speedinvest first invested in Planetly in 2020; the company provides a platform for businesses to analyse, reduce and offset CO2 emissions, collecting data via an automated process.

Like Speedinvest's other funds, the vehicle will target returns of 20% IRR.

Investors
US-headquartered New Enterprise Associates is a cornerstone investor in the fund, having backed its flagship Si2 and Si3 funds.

Beyond this, the fund's LP base mainly comprises industrial companies, Ametsreiter told Unquote. "They have an interest in getting access to these startups. The LPs help us with due diligence: we can see if the startups are really addressing a pain point, if the market is big enough, and if they are prepared to pay for these services. Startups are happy to get access to potential clients, and it's also a competitive advantage for us to get the best startups."

These companies include industrial automation business Knapp; plastics and foam supplier Greiner; and paper producer Heinzel Group, according to a statement.

The vehicle currently has around 26 LPs and expects to have up to 40 at its final close.

Investments
The fund will use around 80-90% of its capital to make co-investments in funding rounds alongside Speedinvest's existing funds, investing in portfolio companies with a climate and industrial technology angle or a positive environmental impact.

Although the fund will invest in companies with an industrial and climate technology angle, the vehicle will not invest in companies that solely produce hardware, Ametsreiter said.

The fund will invest EUR 3m-5m per deal, backing 12-14 companies and generally participating in Series B rounds.

To date, the fund has invested in two deals: a Series B round for Poland-headquartered recycled packaging producer Packhelp; and electric mobility startup Tier Mobility's Series D round.

In addition, the fund can participate in later-stage rounds alongside other VCs, focusing on companies assisting with digitalisation, decarbonisation and sustainability performance in the industrial sector. Speedinvest reviews around 1,500 climate and industrial technology startups per year, but invests selectively, Ametsreiter told Unquote.

"In industrial technology and climate technology you have slightly longer funding cycles," Ametsreiter told Unquote. "If you sell to enterprise customers, there is a complex decision process to go through until you sell your product. These are also often deep-tech companies with technology that needs to fit a defined market over a long period of time, and you need enough data over a certain period of time to get relevant results for this."

However, these companies continue to have capital needs that can be met with vehicles such as Speedinvest's Climate & Industry Opportunity Fund. "Usually, they want to expand geographically with a global roll-out, including building up sales teams, and this is where costs come from," Ametsreiter said. "[They also want] scaling of the product, and some energetic growth, as well as consolidation of the markets they are operating in."

Speedinvest's current climate technology investments also include activist investing platform Tulipshare, which allows retail investors to invest in alignment with the promotion of ethical change. In addition, Speedinvest has backed Sylvera, a platform that aims to improve the accuracy, regularity and cost of carbon offset monitoring.

People
Speedinvest – Marie-Helene Ametsreiter (industrial technology general partner).

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