Eurazeo Smart City II Venture holds €80m first close

Alessia Argentieri
11 February 2021

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Eurazeo has held a first close for its Smart City II Venture fund on тЌ80m.

The fund aims at investing to help cities accelerate their transition and enhance their resilience against the pandemic.

"We started our fundraising in March 2020, as the pandemic was beginning to significantly impact most of Europe, but we were able to attract a large number of new and old investors, allowing us to reach our first close very quickly," partner Matthieu Bonamy told Unquote.

The fund is larger than its predecessor, Smart City I Venture, which closed on €140m in 2016 and is currently fully deployed.

Smart City I Venture Fund has already made 23 investments across Europe, Asia and North America. Its portfolio companies include Spanish last-mile logistics specialist Glovo; US-based Volta Charging, a specialist in charging networks for electric vehicles; and China-based Weride, an autonomous transport business.

"Despite the pandemic, our companies are performing very well. Due to the circumstances, cities need to be smarter and more resilient, and this in turn is contributing to the performance of the fund," Bonamy told Unquote.

Investors
The fund has built an investor base composed of longstanding partners that re-upped from the previous fund, as well as new LPs from Europe and Asia.

LPs include French, German and Asian groups, such as car maker Stellantis, electric utilities EDF and Mainova, public transportation operator RATP, energy company Total, logistics business Duisport, Thaï real estate developer Sansiri, institutional investors such as PRO BTP, and family offices.

Investments
The fund invests in energy, transport, property technology and logistics startups worldwide, primarily in continental Europe and the UK, Israel, the US and Asia.

Bonamy said: "The fund benefit is also extra-financial, as we support entrepreneurs who take decisive action to reduce carbon emissions and enable the development of more inclusive and resilient cities. This is crucial today as cities consume 78% of the world's energy and produce more than 60% of the world's greenhouse gases."

The fund plans to deploy around two thirds of its capital in Europe and the UK and one third in Asia and the US.

The vehicle targets early-stage to series-B and -C rounds and deploys tickets in the €2-8m.

"Thanks to our expertise, the fund has a lot of flexibility, both geographically and in terms of investment rounds," Bonamy told Unquote. "Our sweet spot are series-A rounds, but we can also invest in early-stage and later-stage companies."

The vehicle targets technology companies that are supporting the rapid transformation of cities for the benefit of their residents: niches include remote working, shared transport, electric transport, food delivery and renewable energy transition.

"We are currently working on three investments, one in the logistics sector in France, and two in the UK, in the property technology and energy sectors," Bonamy told Unquote.