Are those green shoots I see?

After a challenging year for European climate tech start-ups courtesy of the pandemic, there are now signs that the money is moving once again, says Dr Heather Johnstone, Enlit Europe Content Director of Initiate.

As in most sectors, the global COVID-19 pandemic has had and continues to have a profound impact on the innovation sector, particularly the start-up community, where over the course of last year deal flows largely dried up and funding rounds were postponed. Hardest hit were hard-tech ventures because unlike their digital cousins they tend to require more investment and over a longer period.

Thankfully, there’s been recent signs that investor confidence is returning to the sector and returning in a big way. Over a two-month period – March and April of this year – there’s been a flurry of climate tech funding deals, including:

  • Amsterdam-based Dexter Energy, which offers an AI forecasting and dispatching solution to help energy companies optimise their portfolios, secured a €2 million Series A investment.
  • LiveEO, an Earth observation asset monitoring start-up based in Berlin, closed a Series A investment round with venture capitalists btov Partners, Helen Ventures, DvH Ventures and Motu Ventures, as well as deep-tech investor Andreas Kupke that totals €5.25 million.
  • Recognised as a market leader in thermal batteries for financed turnkey energy storage solutions for industrial clients, Norway’s EnergyNest signed an €110 million investment agreement with Infracapital.
  • French micromobility start-up Dott successfully closed a new $85 million Series B funding round, with the Belgium-based investment company Sofina leading the investment.
  • Although the amount wasn’t made public, ESFORIN SE, a German provider of flexibility solutions for the power sector, raised a growth equity round led by SET Ventures and with participation by Christoph Ostermann, founder of sonnen GmbH and existing shareholders.

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What is especially interesting about Dexter Energy’s recent funding success in that Newion is a software fund that does not traditionally invest in the energy domain. Could this, therefore, be a sign that such funds are now seeing energy and climate tech solutions as a good place to put their money?

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Julia Padberg, Principal at SET Ventures, certainly thinks so: “Traditional software funds are now also investing in climates solutions, especially software-based ones. And so for the sector, I think this is great, and it’s only going to accelerate this transition.”

Finally, there also good news for Portugal-based start-ups with last month’s announcement from EDP’s innovation arm, EDP Ventures, that it has €10 million ($12 million) to invest in domestic climate tech start-ups via its EDP Cleantech FCR fund.

So, are these green shoots? Yes, I think they are.