Climate Innovation Fund, APG and Nysnø Climate Investments are among the investors backing the new fund which will invest in European companies working to accelerate decarbonisation
In brief
- Energy Impact Partners’ European fund final closing oversubscribed by €140m
- Eleven investments have already been made in venture and growth-stage companies driving the energy transition
- Portfolio companies benefit from commercial support offered by a collaborative platform of more than 50 corporate LPs
Venture capital firm Energy Impact Partners (EIP) has launched its first European fund to invest in companies across Europe which are working to accelerate the energy transition to net zero.
The fund has closed with €390m, €140m over its initial target, which it raised from investors including Microsoft’s Climate Innovation Fund, APG on behalf of its pension fund client ABP, and Nysnø Climate Investments, a wholly owned subsidiary of the Norwegian Ministry of Trade, Industry and Fisheries.
The fund seeks to invest in around 20 growth and venture investments across the continent, including in high impact tech companies that contribute to safer, more flexible and cleaner energy sources.
It has already invested in eleven companies in Europe, including renewable energy supplier Zolar, subscription provider for sustainable consumer tech Grover, EV charging solutions provider EV.energy, portable batteries provider Instagrid, and ESG data and technology providers Greenly and ESG Book.
Speaking to Impact Investor about the companies they were targeting, Matthias Dill, managing partner for EIP, said: “We are looking at companies that are mature enough to scale and mature enough to be suppliers for some of the corporate LP partners we work with through our collaborative platform.”
EIP has more than $2.5 billion in assets under management and three existing North American funds. Dill said that through its established presence in North America, it would also offer its European portfolio companies the support to expand in the North American market should they wish to, with the help of its North American partners.
“We have a separation by geography, but that’s only on the investment side of things. On the collaborative side, if a European company wants to work with one of our US partners for example, then we try to help them with that,” he said.
A collaborative platform to scale impact
EIP is modelling its European strategy on its North American funds by providing commercial support as well as investment capital through its collaborative platform of more than 50 partner companies committed to transitioning to net zero in the built environment, transportation, industry and finance sectors.
EIP’s research team provides its partner firms with insights and advice and in return, its partners share their knowledge and offer help to accelerate the growth of EIP’s portfolio companies. According to EIP, the platform has enabled over 350 contracts and delivered more than $1bn in sales and business for more than 100 companies so far.
Dill explained the fund’s strategy for sourcing companies for investment and the important role played by the platform: “Probably about a third of the companies we look at have come knocking on our door, but what is unique to our model is our global 10-strong research team and the corporate LPs we work with and whose brains we pick all the time.”
Although the investment team at EIP ultimately make all the investment decisions, Dill said the practical experience of the companies on its platform was invaluable.
“The team at EIP takes the investment decisions, but what we do ask our partners is ‘what are you planning to spend your money on?’, ´what new technologies would you need to decarbonise faster?´ Or ‘what are the most pressing problems you don’t have a solution for yet?’ And through that combined effort we have access to a level of industry knowledge that other funds don’t have.”
Dill said the companies on its platform were keen to provide their expertise because they were looking for solutions to decarbonise their own operations.
“We provide a unique perspective on the future of the energy sector from the lens of the disruptor. We do not need to replicate the work that consultancies like McKinsey do. What we offer is a bottom-up view from the companies we speak to every day. We know how they would want to decarbonise and change their respective sectors and that’s a very different proposition,” he said. “In essence, we provide a view on what the future might look like.”
According to EIP, its portfolio of companies has avoided a combined 2.8 million metric tonnes of CO2 equivalents in 2021 and is predicted to save 6.8 million metric tonnes of CO2 in 2022. The company said that all its measurements were reviewed and verified by a third party.
