Recent times have seen the rise of new venture capital firms specializing in climate technology, alongside existing firms that are amassing larger funds. Among these, the Dutch venture SET Ventures, established in 2007, stands out for doubling its latest fund to €200 million compared to the previous one. This fund is earmarked for investing in 20 to 25 European startups that aim to mainstream renewable energy.
Sustainable Energy Technologies, which SET Ventures symbolizes, boasts a reputable history of backing European startups focused on climate, accentuated by its article 9 status that underlines a firm commitment to sustainability. This accolade has drawn unprecedented capital from various corporate and institutional limited partners (LPs). However, managing partner Anton Arts acknowledges the challenges larger funds pose, such as the tendency to lean towards writing heftier checks at later investment stages, which could veer the firm away from its core competency.
To circumvent this issue, Arts mentioned to TechCrunch, SET intends to “increase transaction volumes without diversifying their deal nature.”
Persisting with a focus on early-stage investments, especially Series A rounds, where investments range from €2 to €5 million is SET’s strategy. A recent investment made by SET includes a €5 million Series A funding in Vilisto, a German startup specializing in digital heat management, showcasing SET’s investment strategy.
While the size of the investments remains unchanged, SET has gradually adapted its investment philosophy towards the digital realm. “In our fourth fund, we aim to back digital solutions pivotal for a carbon-neutral energy ecosystem,” Arts shared regarding the evolved focus.
In contrast to the World Fund, whose managing partner Danijel Višević perceives a need for a focus on hardware within Europe’s climate sector, SET, under Arts’ guidance, views standalone hardware as insufficient for meeting urgent climate objectives. However, SET still supports businesses incorporating hardware, provided their technology is scientifically sound, as demonstrated by their investment in Instagrid, a developer of enterprise-level portable power sources, which recently secured a $95 million Series C investment.
For SET, software, especially when aiming to democratize innovation, holds tantalizing prospects for meaningful challenges and significant returns. Automation, largely powered by software, is deemed essential for transitioning from niche to mainstream markets. “The leap to mass market adoption requires automation; therein lies the significance of AI,” observed Arts.
Founders René Savelsberg and Wouter Jonk were pioneers in recognizing the potential of the energy transition when they initiated SET Ventures in 2007 in Amsterdam. Joined by Arts seven years later, he draws parallels with the current energy transition and the technological evolutions he experienced in his earlier VC and software career, highlighting similarities with advancements such as 5G and internet infrastructure. Arts believes in the power of cross-sector insights to fuel innovation in the climate tech field.
As the clean energy sector flourishes, SET Ventures has seen a pressing necessity to expand its reach. Initially operating solely from Amsterdam, the firm broadened its base by opening an office in Germany, reflecting its investment focus predominantly in the Netherlands, U.K., and the DACH region. With the larger fund, Arts anticipates an expansion in their geographical footprint of investments.
Compiled by Techarena.au.
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