Berlin-based early-stage VC firm Vireo Ventures, which invests in companies working to electrify industries away from fossil fuels, has closed its first fund at €50m.
LPs in the new fund include European energy firms Encevo, Verbund X and EnBW New Ventures.
Vireo wants to back companies working on software that can help transition away from fossil fuels: be it those working on energy production or consumption. Within consumption, the fund is particularly interested in charging solutions for electric cars and trucks.
“We believe it's one of the biggest investment opportunities that we have,” says Vireo partner Felix Krause. “Whether we want to reach Net Zero zero by 2040, 2045 or 2050 or even 2060, we need to invest more than $100tn into electrification, so that is a huge investment opportunity.”
Vireo’s fund is something of an anomaly in 2025. Back in the heady days of 2021 and 2022 — when capital was cheap and the tech ecosystem was abuzz — a flurry of new climate-focused VC funds popped up.
As capital has become harder to come by, and the green transition has dropped down the political agenda, the number of new climate funds being announced has dwindled. Funding for climate tech startups has dipped 71% this year, Sifted data shows.
Fundraising
Vireo’s team met working at Innogy Ventures, the CVC arm of Innogy, a utilities provider which was acquired by EON in 2019. After the merger, the five partners who would go on to form Vireo invested into 19 companies as a private angel syndicate, before deciding to formalise operations into a VC firm.
The firm reached its first close in 2022, primarily from friends and family, and then started talking to LPs.
“It was not a straightforward journey,” says Krause. “We started with the fund a week before Russia invaded Ukraine, then there was the energy crisis at the end of 2022, then we had interest rates going up and the European economy going through some phases of flat growth.”
That meant LPs were often in a difficult position, Krause says.
“Some were lacking the means because they had invested it in other funds and they needed capital sooner than was originally thought. A lot of people needed to refinance property investments because of higher interest rates.”
Valuations
Vireo’s portfolio includes EV charging startup HeyCharge and clean energy sourcing software Granular energy.
The firm writes cheques from €500k to €1.4m. It’s already backed 17 companies from the fund and is targeting a further 13.
Although energy software is often underpinned by algorithms, the sector largely avoids the hyped valuations pure-play AI companies are seeing, Krause says.
“In the sectors we are investing in, in the pre-seed and seed rounds, valuations are fairly reasonable,” says Krause. But in later-stage rounds, he adds, he’s seeing more sector-agnostic funds get involved and push up the prices.
Vireo has seen this dynamic in its own portfolio. German energy software startup Green Fusion, which Vireo had backed at seed stage, secured a €12m Series A round earlier this year and managed to grab the attention of generalists HV Capital and Xange.
