{"id":597516,"date":"2023-11-10T10:00:50","date_gmt":"2023-11-10T07:00:50","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/"},"modified":"2023-11-10T10:00:50","modified_gmt":"2023-11-10T07:00:50","slug":"climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/","title":{"rendered":"#Climate tech is set to boom. This VC explains why it\u2019s ripe for investment"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a406f40ab44c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a406f40ab44c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/#Does_it_move_the_impact_needle_and_is_there_a_market_opportunity\" >Does it move the impact needle, and is there a market opportunity?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/#Flight_to_quality_increases_VC_competition\" >Flight to quality increases VC competition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/#Solving_problems_%E2%80%94_why_this_why_now\" >Solving problems \u2014 why this, why now?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/#Clean_technologies_will_outgrow_oil_in_revenue\" >Clean technologies will outgrow oil in revenue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/climate-tech-is-set-to-boom-this-vc-explains-why-its-ripe-for-investment\/#From_physical_assets_to_digital_solutions\" >From physical assets to digital solutions<\/a><\/li><\/ul><\/nav><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/img-cdn.tnwcdn.com\/image?fit=796%2C417&amp;url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2023%2F11%2Fclimatech-e1699523757379.jpg&amp;signature=3eb6300ce28a3dd8835e766701f10838\" \/><\/p>\n<div id=\"article-main-content\">\n                            <span style=\"font-weight: 400;\">Climate tech is receiving a proportionally larger share of what is, undeniably, a muted venture capital investment environment. VC and private equity investment in the sector has, thus far in 2023, <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.pwc.com\/gx\/en\/issues\/esg\/state-of-climate-tech-2023-investment.html#:~:text=Total%20venture%20and%20private%20equity,US%24638%20billion%20in%202023.&amp;text=Private%20market%20equity%20and%20grant,over%20the%20same%20time%20frame.\"><span style=\"font-weight: 400;\">fallen by 40%<\/span><\/a><span style=\"font-weight: 400;\"> \u2014 just as the evidence of the need for more money for potentially planet-saving <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> is becoming increasingly insurmountable.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the total amount for all venture and equity investment was down 50.2% year-over-year. So, while climate tech is far from escaping the current economic downturn unscathed, it is faring\u2026 not as horribly as other tech segments.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Still, the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> earlier this autumn that leading Dutch climate tech VC SET Ventures had raised \u20ac200mn for its fourth fund \u2014 doubling the size of its previous one \u2014 was particularly uplifting. The <\/span><span style=\"font-weight: 400;\">fund<\/span><span style=\"font-weight: 400;\"> will invest in 20 to 25 European companies that are innovating the energy transition.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">TNW sat down for a conversation with SET Ventures\u2019 Managing Partner, Anton Arts, to see what it takes to be a venture capitalist in climate tech, the enormous economic opportunities arising from our move toward net-zero, and how <\/span><span style=\"font-weight: 400;\">startups<\/span><span style=\"font-weight: 400;\"> garner favour in an increasingly difficult investment landscape.\u00a0<\/span><\/p>\n<div class=\"inarticle-wrapper channel-cta\">\n<div class=\"ica-text\">\n<p class=\"ica-text__title\">Get your ticket NOW for TNW Conference &#8211; Super Earlybird is almost sold out!<\/p>\n<p>Unleash innovation, connect with thousands of tech lovers and shape the future on June 20-21, 2024.<\/p>\n<\/div>\n<\/div>\n<p><span style=\"font-weight: 400;\">\u201cIt\u2019s a bit of a funnel,\u201d Arts explains when discussing the process of selecting which companies to back among an avalanche of pitches. \u201cThe first thing we ask is: does this fit into our scope?\u201d\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Does_it_move_the_impact_needle_and_is_there_a_market_opportunity\"><\/span><span style=\"font-weight: 400;\"><strong>Does it move the impact needle, and is there a market opportunity?<\/strong>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">SET has a clear idea about what it wants to invest in \u2014 digital technologies that advance a carbon free energy system. \u201cSo a major question that we try to answer whenever a proposal comes to us is, how does this affect the energy system of the future?\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Arts adds that this is a much more narrow focus than what someone thinking about climate tech in a more generic way would have. However, as energy is linked \u2014 directly or indirectly \u2014 to <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.c2es.org\/content\/international-emissions\/#:~:text=Globally%2C%20the%20primary%20sources%20of,72%20percent%20of%20all%20emissions.\"><span style=\"font-weight: 400;\">72% of global emissions<\/span><\/a><span style=\"font-weight: 400;\">, trying to address those emissions is a \u201cmore than large enough\u201d problem: \u201cWe also ask ourselves, does this really move the needle in terms of impact?\u201d\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe second area that we then focus on is really some of the same questions that all VCs try to answer. Do we think this is a fantastic founder team? Is there a market opportunity that is large enough? Can you truly develop a differentiated and unique offering in that market? And, ultimately, is it going to be financially rewarding to take on that opportunity?\u201d\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Flight_to_quality_increases_VC_competition\"><\/span><strong>Flight to quality increases VC competition<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">After having found an exciting investment opportunity, the process then becomes somewhat of a two-way street. Sure, there is less capital up for grabs as the funding optimism of the past few years has waned (unless you are in generative <\/span><span style=\"font-weight: 400;\">AI<\/span><span style=\"font-weight: 400;\">, that is) \u2014 but the startups that meet the more stringent criteria can instead have their pick among suitors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cIn the current market, there is also a flight to quality, which means that the bar for what is a great company is raised. But for those companies that meet the bar, there is intense competition between investors in order to fund that opportunity,\u201d Arts states, adding that there is also a founder who has to make a decision which investors to go with.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Additionally, Arts says it is a healthy market dynamic, and one that is influenced to a great deal by the fact that climate tech has moved from a relative niche from an investment perspective, to much more of a mainstream market.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Solving_problems_%E2%80%94_why_this_why_now\"><\/span><span style=\"font-weight: 400;\"><strong>Solving problems \u2014 why this, why now?<\/strong>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Another question that always comes up, Arts says, is \u201cwhat problem is this solving? Why this, but also, why now? Because many of these problems are not new. What has changed in the past few years that now there is a solution to an existing problem that wasn\u2019t there before? Maybe it is the technology, maybe it is the people, etcetera.\u201d\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And finally, Arts says, as a VC, you have to \u201cskate to where the puck is going,\u201d meaning you have to be willing to make a bet on something that the rest of the world hasn\u2019t seen yet. Or, as he puts it \u2014 \u201cwhat do you want me to believe that other people aren\u2019t believing yet?\u201d\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When thinking about investing with environmental or <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> impact as a criteria, the question inevitably arises as to whether there are compromises in terms of return on investment versus doing a good thing for the planet. Arts would argue, perhaps unsurprisingly, that not necessarily \u2014 and definitely not when it comes to energy.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe think that this transition to the energy system of the future is really a generational opportunity in magnitude,\u201d he states.\u00a0\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Clean_technologies_will_outgrow_oil_in_revenue\"><\/span><strong>Clean technologies will outgrow oil in revenue<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Indeed, according to the International Energy Agency (IEA), a new energy economy is emerging, pushed forward by policy action, technology innovation, and the increasing urgency of the need to tackle climate change. This, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.iea.org\/reports\/world-energy-outlook-2021\/a-new-energy-economy-is-emerging\">the IEA says<\/a>, provides a \u201chuge market opportunity\u201d for clean technologies.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The agency estimates that, if the world gets on track for net-zero emissions by mid-century, the annual market opportunity for wind turbines, solar panels, lithium-ion batteries, electrolysers, and fuel cells will grow tenfold to $1.2 trillion by 2050. That means that those five segments collectively would be larger than today\u2019s oil industry and its associated revenues.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And that\u2019s \u201cjust\u201d the hardware stuff. The new energy economy will also require digital tools to manage the complex interactions and relationships between things like electricity, fuels, and storage markets. Managing platforms and data will become increasingly important parts of energy efficiency and clean energy innovation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWhat people might need to be reminded of is that you can\u2019t always predict timelines. But that doesn\u2019t mean they\u2019re going to be longer. Sometimes you see changes h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ening very quickly. And for us as investors, we think that if you look at the past, then, of course, we\u2019ve seen a lot of success in software businesses, and, for instance, business-to-consumer internet businesses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cWe think the opportunity of the next decade is really shifting to climate tech as a category, and we are absolutely convinced that we will see similar types of return expectations, as we\u2019ve seen in the tech business in the past.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the reasons for that, Arts says, is that more and more talent is moving into climate tech, having perhaps previously been successful in other industries and looking to make more of a difference. And, a chain is starting to emerge all the way from early stage investment to very large growth equity funds. SET invests across Europe at the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">Series<\/a> A stage, but with the ability to keep supporting portfolio companies through multiple rounds of financing.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"From_physical_assets_to_digital_solutions\"><\/span><strong>From physical assets to digital solutions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Essentially, SET Ventures believes in three things: that the world is changing very fast, and that the energy transition is the biggest trend driving markets in the next decades; that there is too much emphasis on miracle technologies that exist only in the lab and not enough on the business models and applications that will scale what\u2019s right in front of us; and, from a systems perspective, value migration will move from only physical assets, to the collection of digital solutions that together form the energy system.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Among the startups and scaleups in SET\u2019s portfolio are Dutch companies <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sensorfact.eu\/\"><span style=\"font-weight: 400;\">Sensorfact<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.energyworx.com\/\"><span style=\"font-weight: 400;\">Energyworx<\/span><\/a><span style=\"font-weight: 400;\">. The former helps clients reduce industrial energy waste through plug and play hardware, smart software, and dedicated consultants. Founded in 2016, Sensorfact has already scaled to 1,300+ customers in over 40 countries and identified more than 112+ GWh of energy savings. Energyworx is a SaaS provider for energy providers to ingest and manage data across the entire energy chain.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another example of SET\u2019s investment strategy is Germany\u2019s <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/instagrid.co\/\"><span style=\"font-weight: 400;\">Instagrid<\/span><\/a><span style=\"font-weight: 400;\">. The company has built a 20kg 230V portable power system for professionals to work off-grid. On a full charge (2.5 hours), an industrial vacuum cleaner can run for 105 minutes, you can brew 1,200+ cups of professional catering espressos, and high quality projectors can run on full brightness for five hours.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SET\u2019s latest fund is backed by the European Investment Fund (EIF), Triodos Energy Transition Europe Fund, a.s.r., and Amsterdam-based <\/span><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.carbonequity.com\/\"><span style=\"font-weight: 400;\">Carbon Equity<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0<\/span>\n                        <\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/climate-tech-investment-boom-vc-explains\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Climate tech is receiving a proportionally larger share of what is, undeniably, a muted venture capital investment environment. VC and private equity investment in the sector has, thus far in 2023, fallen by 40% \u2014 just as the evidence of the need for more money for potentially planet-saving technology is becoming increasingly insurmountable.\u00a0 However, the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":597517,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/tnw-blurple?filter_last=1&fit=1280,640&url=https:\/\/cdn0.tnwcdn.com\/wp-content\/blogs.dir\/1\/files\/2023\/11\/climatech-e1699523757379.jpg&signature=bb8af548e78c058e308ad17a7517dc3e","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-597516","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/597516","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=597516"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/597516\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/597517"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=597516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=597516"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=597516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}