Saving the planet from Climate Change devastation can benefit investors as well as our future, according to a new Venture Capital (VC) trend.
2021 has already seen multiple climate-focused fund launches. London-based One Planet Capital launched a fund for green tech, fintech, and sustainability-based B2C businesses. At the same time, Hollywood ‘Iron Man’ actor Robert Downey Jr has founded FootPrint Coalition Ventures to invest in high-growth, sustainability-focused companies.
Paul Stannard, Co-Founder of The World Nano Foundation and General Partner of Vector Innovation Fund based out of London and Luxembourg, predicts that sustainability, environmental and social governance will shape the next decade in terms of value creation around climate change as well as healthcare.
He said, “You can trackback the pandemic to climate change. More and more of the world’s population live in urban developments. This has had a massive effect on bio-diversity as the natural world has come into contact more regularly with humankind. Over 220 pathogens have come from animals, and only a handful have a clinically approved technological solution.
“We believe you cannot separate what we are doing with carbon emissions and other significant challenges such as the pandemic and future healthcare provision. We think you can make substantial returns on capital and solve climate change, pandemic protection and preparedness by investing in advanced nanotechnologies that can make the world a fairer and safer place.”
Vector Innovation Fund has just launched a $300m sub-fund for Pandemic Protection Preparedness as part of a broader billion-dollar technology fund focusing on enabling technologies that impact healthcare and climate change.
The financial world used to think environmental issues couldn’t generate viable rewards, but another climate-focused fund, Congruent Ventures, believes a tipping point has been passed.
Congruent raises investment specifically for Climate Change solution start-ups and, with $300 million under management after closing its second fund at $175m, managing partner and co-founder Abe Yokell said:
“If you brought up the word ‘cleantech’ to any institutional investor allocating to venture ten years ago, they would do their best to avoid the meeting, but now, there’s a fundamental belief there will be significant financial returns investing broadly in climate tech over time.”
Congruent itself is well-founded, with investors including UC Investments, the Microsoft Climate Innovation Fund, Three Cairns Group, Jeremy and Hannelore Grantham Environmental Trust, and Surdna Foundation, among other institutions, foundations, and family offices.
Regulation A+ crowdfunding companies are also seeing investment, such as Digital Twins market leader Cityzenith, who recently launched their international ‘Clean Cities – Clean Future’ campaign as part of the Race to Zero movement.
Cities worldwide generate 70% of the world’s carbon emissions. Still, Cityzenith’s AI Digital Twin platform technology can help property asset management groups, city planners, and developers reduce emissions and move to carbon neutrality in the next ten years.
Cityzenith CEO Michael Jansen said at the launch of the ‘Clean Cities – Clean Future’ initiative: “We have to help the most polluted urban centers become carbon neutral, and we plan to do this by donating the company’s Digital Twin platform SmartWorldOS™ to key cities, one at a time, after every $1m we raise. We’re able to do this because of the recent surge of investment we’ve had as part of our $15m raise.”
Cityzenith is already benefiting from the funding shift, attracting $2.5m in investment since late 2020 through Regulation A+ crowdfunding and a surge in shares from $0.575 to $1.50 in just five months. The US company has raised $10m to date.
“In the past decade, investors struggled to justify backing Climate Change solutions, but global demand for net-zero carbon by 2050 and a sustainable future means a tipping point has been passed.”
“We’ve seen a significant amount of interest in our current $15m raise from accredited investors in recent months, as there are tangible, financial upsides in the built environment to going climate-friendly, and carbon credits are going to become an enormous part of this in the next few years.”
European-based fund 2150 also launched this year, investing €200m ($240m) into start-ups developing sustainable technologies to lower carbon emissions in Europe’s cities. Co-founder Christian Hernandez has seen a shift in perceptions too:
“There are enough proof points now that those two (profitable investments and investing in climate solutions) can coexist.”
