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💸 The Climate Tech VC Ecosystem in Europe

Tech4Climate

Photo by Christian Lue / Unsplash

Table of Contents

Host: Guillaume De Dorlodot
Guest: Danijel Višević | Founding Partner | World Fund
Category: 💸 Investing

Podcast’s Essential Bites:

[5:05] “World Fund is looking for climate tech startups, mainly in Europe, that have the potential to save at least 100 megatons of CO2 or equivalent emissions per year. So it's […] mainly two sectors: energy and food, agriculture, land use […]. So why we are focusing on Europe is because we have a huge investment gap here. We have the best talent, best teams, best tech, most companies, but no funding. And this is crucial to not only save humankind, but also to use this investment opportunity wisely.”

[13:43] “[Europe is] at the forefront when it comes to climate tech R&D. Only on the European Union level, […] in a program […] called Horizon Europe we will have spent 33.4 billion Euros on climate tech R&D until 2027. […] With a program […] called Horizon 2020, since 2014 on a European level 58 billion Euros have been invested into climate tech R&D [already]. So adding to that national budgets in France, Germany, Spain, Italy, and all the other 27 European Union countries, […] hundreds of billions of euros are added on top of that.”

[14:40] “28% of all the climate tech patent applications worldwide are European. A third of all the leading research institutes and universities are European. We have the most climate tech startups if you compare it to China and or North America, but we have least funding. So we are number one in everything […] to build an ecosystem [that’s] perfect for the next […] unicorns, for the next most successful companies and climate tech. But then when it comes to funding in the moment when it's close to really generating revenue and profit, we say that entrepreneurship [is too] risky. […] When you look at the funding in Europe, two thirds in climate tech investments, […] it's not European VC capital.

[16:37] “We have to start to invest as soon as possible and we are behind. We need 100 World Funds, we need 100 Pale Blue Dots […]. So the World Fund’s 350 million Euros […] is only as we say in Germany, a drop of water on a hot stone. Only in Germany, we have a gap per year of 22.7 billion Euros for climate tech companies that are needed in venture capital. It's a study conducted by the German Energy Agency that's part of the German Ministry for Economy and Climate.”

[18:56] “What's missing is new regulations, a carbon price. But what I've learned is, don't wait for politics. Just act. […] What's changing the world is companies like Tesla, it's not subsidies or whatever. […] We hope that political will when we act, also follows, but what we need is three things in the venture capital in Europe. We need bigger funds. We need patient capital. And we need smart capital.”

[29:24] “We believe that every company that will help us to decarbonize will be the most valuable in the next decade. So those climate returns, as we call it, are early indicators for superior financial returns.”

[30:58] “Climate tech needs a lot of money. That's one of the reasons why we started the biggest climate tech VC in Europe. […] Climate tech needs more than 1 million or 2, you need follow on rounds. So we have initial ticket sizes of 1 to 8 million, and we can invest up to 30 million per company and go to more rounds. And we invest with traditional superior VCs. And that's also relevant for signaling that you really have investors besides the World Fund, that […] signals you have connections to the best.”

[35:15] “We are deep diving now into quantum computing. […] Our indications are that this could really leap so many segments. It could give us leaps in terms of developing new batteries, with a new and higher density so that all the goals we have [with] batteries could be […] achieved.”

Rating: ⚡⚡⚡⚡

🎙️ Full Episode: Apple | Spotify | Google (Original Title: "Investing in Startups that Can Save 100 Megatons CO2 Eqv")
🕰️ 48 min | 🗓️ 02/18/2022
✅ Time saved: 46 min

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