Amsterdam-based VC firm SET Ventures has doubled the size of its last fund with a new €200m pot to back sustainable startups developing digital products to help facilitate the adoption of renewable energy solutions.
The fund — which will invest first cheques of between €2-5m in 20-25 Series A startups across Europe, with the ability to invest up to €15m per company — is backed by LPs including the European Investment Fund, Triodos Energy Transition Europe Fund, Carbon Equity and several European grid operators.
Tackling the adoption problem
SET Ventures has a 17-year history of investing in climate solutions, says managing partner Anton Arts. “We've been focused on this domain throughout the life cycle of the firm, starting off as more of a generalist cleantech investor and turning [to] the digital side with our second fund, when we started to invest in the digitalisation of the energy industry.”
But this fourth fund will focus on startups that are making the adoption of solutions like solar panels and electric vehicles easier and more convenient, rather than companies that are working on the hardware themselves.
“Many of the technologies that we need to achieve a carbon-free energy system are already here — and that's why we believe that it makes sense to focus on scaling what is right in front of us through the right business models and applications, rather than trying to focus on inventing more new technologies,” says Arts.
“It's not just about physical assets and who owns them: the real value is going to be in how we put everything together, how we can optimise and control this energy system of the future,” he says. “The world's going to change to focus on scaling [and] not just inventing, and we expect that most of the value will be generated on the digital side.”
Energy for everyone
The main goal is to reach a future where renewable energy is made accessible — and easy — for everyone, says Arts. “The idea is that it's not only about deploying more solar and wind, but really about solving the question of ‘how do we make everyone an active participant in that energy system?’”
The fund will focus on three main trends to try and tackle that issue.
The first is decentralisation: “[There are] problems around grid congestion and how hard it is to meet the pace of electrification with a physical power grid. We believe that one of the solutions to that is going to be to make sure that not all energy reaches the grid and that we rely more on distributed generation, distributed storage and distributed use, and that all of that works in an orchestrated way,” he says.
Automating the nitty gritty of using renewable energy solutions is also key, he says — while early adopters may be happy to complete parts of the process manually, getting solutions out to the mass market will require automating some of the complexity and streamlining the user experience.
Alongside making it easier for consumers to access these solutions, the fund will also look for solutions focusing on ensuring both the cybersecurity of the infrastructure, but also the security of the energy source itself. “People have gotten used to an energy system that is always on [and] reliable — we cannot transition to a carbon-free energy system unless that level of certainty of security is replicated.”
Four companies have already received investment from the new fund: smart heat-management startup vilisto, energy renovation advisor Fuchs & Eule, energy management software provider Tibo Energy and e-mobility platform e-mobilio.
