Vireo Ventures’ electrification fund secured the backing of a wide range of private, corporate and institutional investors across the European energy system.
Vireo Ventures, a Berlin-based venture capital firm, has announced the final close of its Electrification Fund I after it attracted commitments of €50m from six European energy firms, the European Investment Fund, local German public lender NRW.Bank and more than 80 private investors.
The new fund focuses on investments in European early-stage companies working on technologies that can accelerate the energy transition. These technologies include orchestrating and synchronising generation, grids, storage and downstream applications across the mobility, industry and real estate sectors.
“Grid investments are central to Europe’s future security and competitiveness. Europe’s electrification push is not just a climate imperative but a geostrategic necessity. Startups are uniquely positioned to deliver the speed, innovation, and scalability needed to meet this challenge,” said Felix Krause, managing partner at Vireo Ventures.
European action plan
Vireo, which is targeting investments with ticket sizes of up to €1m in software-enabled startups that are working on scalable technologies, had initially aimed for a final close of €40m, its managing partner, Matthias Engel, told Impact Investor.
The final close comes after the European Commission laid out its Affordable Energy Action Plan in February, aimed at slashing electricity bills, rolling out clean energy sources and diversifying suppliers. The plan, which is part of the Clean Industrial Deal that focuses on growing the clean technology sector, is supposed to deliver savings of up to €260bn a year by 2040 for consumers and businesses.
“This is a bet on electrification, but it is also a bet on the energy transition. We need to rebuild the system, we need to make grids more intelligent. We need to add capacity and storage,” said Engel.
The fund is targeting a return of three times the initial investment over a period of ten years, with a focus on impact potential, scalability and strong leaderships teams, according to Engel.
Follow-on funding
To date, the fund has backed 17 startups all working on scalable solutions in areas like grid optimisation, heat decarbonisation and EV infrastructure. Some portfolio companies have already secured follow-on funding and strategic partnerships.
“Our investment strategy is backing founders and supporting and accelerating the energy transition. This is not about investing into an onshore wind farm or a solar PV plant. We back the technology that will make these assets quicker to deploy and make them more efficient,” said Engel. He went on to say Vireo Ventures wants to grow its portfolio of companies to 30 by 2027.
“Our focus is on direct investments in startups. We have known Vireo’s team for a long time and value their experience in the energy and utility sector and our shared vision of an all-electrified world,” said Crispin Leick, managing director of Germany-based venture capital firm EnBW New Ventures, and one of the investors in the fund.
