World Fund, the European climate tech investor, has closed its fund at €300 million ($320 million) as it prepares to ramp up its investing.
The Berlin-based fund was first unveiled in 2021 and has steadily raised capital for the fund, including from the European Investment Fund.
Now closed, other investors in the fund include KfW Capital, BPI France and PwC Germany as well as a number of pension funds.
Managing partner said Danijel Višević said that raising the capital for the fund was difficult given the broader downturn in tech seen over the last two years.
“The last year was really difficult. Things looked bright [in 2021], it was difficult to start and to have the first investors but as soon as we got them, mainly high net worth individuals, then it was comparably easy to convince even institutional investors like the European Investment Fund to invest,” he said.
“We closed the European Investment Fund, although the war already had broken out in Ukraine, although interest rates had started to climb, the environment was getting harder. The collapse of Silicon Valley Bank, I have to say, was really what hit the whole market.”
With its €300 million fund now closed, World Fund will focus entirely on investing in start-ups that can aid the goal of cutting carbon emissions.
The fund hasn’t limited itself to any particular sectors but will only invest in companies that can significantly reduce emissions in their sector. Some of its investments include backing food start-ups like Planet A Foods and in the quantum computing space with IQM Quantum Computers.
World Fund will invest in seed and Series A stages of companies with a portion of its capital set aside for follow-on investments.
Višević said that World Fund will also address the so-called “Series B valley of death”, referring to a dearth of capital for companies that are at the capital-intensive scaling stage.
“Unfortunately, those challenges are huge, especially in Europe as we still lack two things in European funds. One is the amount of capital, venture capital is too small. That’s also the reason why we started with the first fund at such a size because we just had to. Climate tech dies at Series B if you don’t reserve for follow on investments and don’t have the capital,” he said.
“But the second is also that we in Europe don’t understand that hardware is scalable. We focus very much on software and what we don’t understand we don’t invest in, so we need the engineers and chemists etc., those scientists on board.”
World Fund’s team includes people with experience in engineering and science that can help in vetting investments, he said, as part of a rigorous due diligence process that centers on ability to reduce emissions.
Višević runs the fund alongside Daria Saharova, Tim Schumacher and Craig Douglas. They expect to make between 25 to 30 investments during the lifespan on this fund.
