VC Profile: Future Planet Capital steps up energy security investments alongside new fundraise, acquisitions

The firm is set to strengthen its partnership with one of the world's top-rated research universities in the US through the launch of a new fund, Hansen-Luke said, without disclosing further information. The vehicle will invest in impact innovation companies that will emerge from an accelerator programme run by the institution.

It usually targets funds of USD 40m to USD 80m that follow the typical VC lifespan of ten years, he said.

The firm's dry powder is spread between its newest fund, Blue Ocean Mandate, and its climate change strategy, which focuses on deep-tech seed investing in the UK or university spinoffs and mutual funds, including regional companies in the West Midlands.

The firm is expecting to make the first five investments from the Blue Ocean fund by the end of the year. The vehicle held a final close on GBP 16.7m in March 2022. It aims to build a portfolio of 10-15 high-growth and high-impact startups that are tackling key issues affecting the world's oceans, focusing on series A and B stage, according to Unquote Data.

The firm acquired three VC firms in 2021, namely specialist investment organisation Milltrust Agricultural Investments, Oxford and Cambridge fund RT Capital and Midven. Midven, is supported by blue chip investors including the British Business Bank and European Investment Bank. FPC remains in the market to consolidate and grow through acquisitions, said Hansen-Luke.

The firm is in talks with a number of boutique managers in the university and impact space, he said. Its targets are in North America, the Middle East and India and Southeast Asia, he said, adding that the firm is looking to close at least one acquisition in 2023.

Honing in on opportunities
The firm's deployment strategy remains focused on its five verticals of climate change, education, health, sustainable growth and security, with the latter currently of most interest, he said. Security investments are "hot" at the moment and have almost outpaced climate change dealflow, he said. The firm's focus will range from physical and defence security to energy, food and water.

Although the amount of money earmarked for climate change investing "has only gone up," there is a shortage of really good companies relative to the amount of money going in, he said. To that end, the firm is confident that it is well positioned to target strong players given its years-long experience in the sector.

FPC is also seeing a "huge opportunity" in life sciences. This is one of the market's most discounted segments, he said. "These companies are finding it difficult to get their next round of funding in the current market environment and for investors with dry powder like us, this is the perfect time to target the best companies and get the best value," he said. FPC is focused on companies that need a next round of funding but have already secured their first revenues and might just need support in order to get to profitability.

Of the 13,000 growth companies emerging from the founders and science at the world's top universities each year, 2,500 have been invested in at an early stage by its partner managers, Hansen-Luke said. Within those 2,500, FPC has tracked 1,000-1,200 and has already invested in 150, of which a subset of 50 are dedicated to solving climate change-related challenges. "In some we were the first investor," he said, citing Tokamak Energy, "one of Britain's finest" fusion energy companies.

Real impact
Hansen-Luke said that the firm wants to make sure that it is investing in true value amid the economic downturn. Whether the world is in recession or not, it still needs to save lives and to address climate change or reduce energy costs, he said.

Citing Crunchbase data showing that USD 18.5bn of VC investment went towards "slightly faster grocery delivery" in 2021, compared to USD 3.4bn towards nuclear power, he added that what investors are valuing in an up-market might not have real impact. Looking ahead into 2023, FPC's thesis on impact is about solving some of the world's biggest problems and he expects to see a broader shift away from trend-following sectors.

As it looks to future deployment, FPC is making a small number of selective hires on the investment front, he said. The firm is also making business development hires in the UK for its growing number of global clients, he said.

It has a wide network of investment partners, including leading institutions and research centres, Hansen-Luke said. It sources deals both directly and alongside its university-linked partners.

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