The new fund will invest in around 20 early stage companies within climate tech, including in the blue economy, in the European Union and the Nordics.
Momentum Venture Management, a Norwegian venture capitalist with a strong focus on climate and environmental innovation, said the European Investment Fund (EIF) has become a cornerstone investor in its third fund with a NOK295m (€25m) commitment.
Momentum’s third fund, which has a target size of NOK600m, will focus on investments in early-stage green technology firms. Momentum launched its first fund in 2017, raising NOK62.2m, followed by its second fund in 2020, which was NOK381m in size.
Momentum’s third fund is “a continuation of our climate tech and sustainability strategy”, following from the launch of its second fund in 2020, Hilde Støle Pettersen, managing partner at Momentum, told Impact Investor.
“We keep looking for ambitious tech founders with a clear climate profile within food and agriculture, the energy transition and decarbonising industry”, Støle Pettersen said. She added that Momentum will also maintain a strong focus on “solutions with positive impact for the blue economy.”
Investors
Apart from the EIF, Momentum’s investors include Norwegian family offices Farvatn Venture and Ferd Impact, Norwegian pension fund KLP and Investinor, a Norway-based governmental fund-in-fund investor, according to Støle Pettersen.
“All of these showed their renewed trust in us as they all continue to back us in Momentum III, along several other existing and new LPs,” she said. “We are proud of the investment from EIF, and many other professional investors tend to follow their lead as they are well-known for being diligent in their assessments.”
The EIF’s commitment is supported by the European Commission through its InvestEU programme, which provides long-term funding by leveraging substantial private and public funds in support of a sustainable economy.
“To reach its climate goals, Europe needs to double its efforts,” said EIF chief executive officer Marjut Falkstedt. “Clean technology solutions are expected to play a big role in cutting greenhouse emissions up to 2030, and these innovations need the appropriate capital. The EIF is here to support that.”
Climate adaptation
Momentum’s latest fund aims to invest around one-fifth of its capital commitments in other EU countries. The fund, which will have a lifetime of ten to 12 years, will invest in around 20 early-stage companies, with a focus on the seed stage. “We aim for annual net returns of more than 20% to keep up with our track record,” Støle Pettersen said.
“While our main focus is on climate change mitigation, we also see great potential within climate adaptation,” Støle Pettersen said. “Unfortunately, society is not ready for the extreme weather and challenging conditions that climate change has already caused on this planet and that will continue to worsen. Creating more resilient societies is a necessity and probably significantly under-invested as of today.”
