London-based VC firm A/O has announced the first €100m close of its second fund. It’s hoping to raise €250m in total.
Over the next three to four years, A/O plans to back 20-25 startups working to enable the energy transition within the real estate industry.
How will it deploy the cash?
A/O's new fund will invest in technologies which reduce emissions and help digitise the built world — from design to construction, building operations to decommissioning.
It will invest in startups from seed to Series B, with first cheques of €3m-8m.
Over half the fund (60%) will go to companies based in Europe and 40% will go to companies in North America. 50% of the fund will be reserved for follow-ons.
The fund has already participated in the €19.4m Series A of portfolio company Enter, which provides digital energy assessments for homeowners.
It’s also invested in a company currently in stealth — a trend that more and more founders are jumping onto — which is developing a software platform to solve for skilled labour shortages in the retrofitting industry.
The market
Buildings are responsible for an estimated 40% of global CO2 emissions, according to the World Green Building Council. There is an opportunity for the sector to go through “one of the largest industry transitions of our generation”, says A/O CEO and chief investment officer Gregory Dewerpe.
Recent regulation restricting the amount of carbon that can be emitted in building construction, such as France’s RE2020, and greater investor focus on ESG targets, has driven an industry push towards more technological solutions, according to A/O.
👉 Read: All Article 8 and 9 VC Funds in Europe
A/O also notes that advances in AI and robotics are enabling a range of new products to solve issues within the construction industry. Dewerpe says that “advanced generative AI enables technologies that can reduce the cost and time of building design by 60-80%”.
What is A/O?
A/O, founded in 2019, is Europe’s largest proptech VC firm. Its last fund of €250m, Fund I, invested in 22 companies including UK-based Satellite Vu, a UK-based aerospace startup generating thermal maps of the earth, and Plentific, a SaaS platform providing property management solutions for landlords and property managers.
