Climate tech has taken a larger and larger share of the investment pie in Europe in recent years.
Last year, the carbon and energy sector, which includes climate tech, took the spot as the most backed sector in European tech, according to Atomico’s State of European Tech report.
So is there room for yet another climate investor? Impact foundation Norrsken thinks so.
Its company builder Norrsken Launcher is on track to close a €100m fund next year, Sifted has learnt.
Norrsken launched the company builder in February in a bid to compete with other impact funds by looking for startups that don’t fit the bill for “normal” venture capital.
More venture studios and company builders are emerging in Europe as investors look to entrepreneurs at earlier and earlier stages of their journey. And some also go on to raise funds to back winners from these cohorts. Sifted learned in November that Berlin-based venture studio Merantix is raising a new €100m fund.
More company builder than VC
The new Norrsken fund has also made its first investment, the company confirmed to Sifted.
Erik Engellau-Nilsson, the founding partner of Norrsken Launcher, confirmed the fund’s existence as well but declined to confirm the size. He did say that the LPs are mostly family offices across Europe. According to a person close to the company, more than half the fund has been raised so far.
The idea behind the Launcher came as Norrsken Foundation was coming across a lot of great technology (often through the venture arm of the Foundation, which has backed companies like 1KOMMA5° and Heart Aerospace) that perhaps didn’t have the team to bring it to market.
Those companies would need more help than VCs have the operational capacity to offer, which is what the company builder can do.
“In comparison to VCs, which can invest at a development stage, we want to get in when there is a proven product-market fit but the existing team may not be able to take the company to the next level,” Engellau-Nilsson says.
The first investment in one of the companies that has gone through the programme is a €3m pre-seed investment in Swedish plastic replacement startup PlasticFri.
The startup has developed products to replace plastics, using natural ingredients and plant-based raw materials such as agricultural waste and non-edible plants that are 100% biodegradable within 12 weeks and do not include any toxic chemicals.
So, if it is so good, why do they need Norrsken Launcher?
“The idea behind PlasticFri is to increase sales 100 times in the coming few years. Not a lot of people have seen that level of quick scaling, and to do that you need to build the organisation to manage that demand,” Engellau-Nilsson says.
Early successes
So far, Norrsken Launcher has mainly looked at companies based in Sweden but will be looking at other parts of Europe in the future.
Its early successes include healthtech initiatives ABC Labs and Cellcolabs. ABC Labs became indispensable in Covid testing in Sweden during the pandemic when regional health services didn’t have the technology to successfully manage all the testing needed.
The stem cell manufacturer Cellcolabs wants to make stem cell treatments available for the middle class and currently has treatments available in the Bahamas and Abu Dhabi. Norrsken helped make the research behind Cellcolabs into a company and hire the operational team.
Europe isn’t as strong on company building as the US and cases such as Novo Holdings seed fund, the longevity investor Apollo Health Ventures, the Swedish industrial dynasty Wallenberg’s investment vehicle FAM and Harald Mix's investment company Vargas spring to mind.
The latter two have been an inspiration to Norrsken Launcher. The Launcher’s other partners are Kry cofounder Fredrik Jung Abbou and Ash Pournouri, cofounder of the event Brilliant Minds and former manager for the DJ Avicii, as well as Anna Fredrixon, former HR director at Kry and Johanna Blendow, former head of global strategic initiatives at Norrsken.
