Visionaries Tomorrow VCs Iris ten Have, Sebastian Pollok, Thong Le Hoang
In the first half of 2024 climate tech investment reached $11.3 billion, dropping by 20% compared to the same period in 2023, Statistica reports. Venture capital investment in climate tech has been declining after peaking in 2021; this reflects broader market trends where investors have become more cautious in an increasingly unpredictable world.
But the climate tech investment story doesn’t end there. It’s a sector that is gaining in investment market share as increasing numbers of investors, talent and founders enter the space in a bid to combat climate change.
“At a global level, climate tech is now more than 10% of total PE and VC investments, taking a growing share of a shrinking market,” Namratha Kothapalli, principal at Speedinvest, said. “We see more ambitious operators and academics building climate businesses, and many more investors looking to dip their toes in the climate world—and we fully expect this momentum to continue.”
New climate-focused investment firms entering the market are supporting portfolio companies with networks and partnerships, giving climate innovation an upper hand and further snowballing momentum.
For instance, Visionaries Tomorrow, a European climate tech fund, was recently formed to address the challenging industrial decarbonization sector. It was launched as a new dedicated fund within Visionaries Club - a VC firm focused on bridging the gap between industrial incumbents and the startup ecosystem. The fund’s vision is to tackle tough-to-disrupt industrial decarbonization. Its investors include a large number of unicorn founders and some of the world’s most influential industrial families who not only invest but also link startups to big-industry clients to enable quick growth.
Thong Le Hoang, Co-founder of Visionaries Tomorrow, sees a bright future for the climate tech investment market: "Availability and access to capital, both equity and non-dilutive funding, remain strong. For example, BlackRock and Temasek have just announced a $1.4 billion fund for climate tech, and over $80 billion of climate tech VC funding became available during the past 6 months. We have the Inflation Reduction Act (IRA), the EU Innovation Fund, and more.”
“This is a fantastic time to start a company in this space,” adds Sebastian Pollok, Visionaries Tomorrow Founding Partner. He believes climate tech has reached an inflection point with founders and innovators just as aware of the urgent change needed as incumbent industry stakeholders. This comes alongside massively increased government support through legislation and non-dilutive funding.
“Many of the largest industries still rely on fossil-heavy legacy technologies, but their tech stacks are under intense pressure to evolve. This presents a tremendous opportunity for founders to introduce groundbreaking new technologies and transform the industrial tech landscape,” says Pollok. “Our fund investors, especially substantial industrial companies, are heavily investing in the future and collaborating closely with the founders we back.”
The fund’s investment approach focuses on startups solving core problems for industrial tech decarbonization. They focus on companies with global market potential and work closely with mission-driven founders, investing in very early stages, from pre-seed investments at around €0.5 million to seed rounds ranging from €1.5 to €3 million.
The fund makes just six to seven investments per year, enabling high levels of support for the startups via Visionaries Club industry connections.
The fund’s portfolio currently includes five companies working on groundbreaking technologies: Proxima Fusion: developing a nuclear fusion reactor to supply clean and abundant baseload energy. Cosmic Aerospace: building an all-electric aircraft with integrated electric propulsion and a 1000 km range. SirenOpt: unlocking advanced micro- and nano-materials at scale with a plasma-based material intelligence platform. A startup harnessing flywheel technology as a cost-efficient grid-scale energy storage solution, and a company developing a bio-electrochemical system to produce green ammonia with renewable energy.
“We are seeking ambitious founders with a deep technical background, ideally someone with a STEM education paired with a co-founder experienced in business, sales, or marketing, ” explains Visionaries Tomorrow VC Iris ten Have. “We also look for an intense obsession with solving the problem at hand and a visionary mindset to make a significant impact.”
ten Have recently joined the climate tech venture capital investor talent pool after pursuing a PhD in chemistry where she worked on converting carbon dioxide directly into fuel. It opened her eyes to innovation possibilities: “I wanted to apply impactful inventions in our fight against climate change, while the academic system primarily rewards people for publishing papers. For me, that wasn’t enough. I saw venture capital as a once-in-a-lifetime opportunity to leverage impactful technologies and create meaningful positive change.”
Investors with scientific technical backgrounds are in demand in the climate tech investment scene; traditional non-climate-focused investment firms have sometimes lacked investors with the expertise to evaluate and understand the potential of the plethora of emerging green innovation.
“We’re already seeing tangible changes with the development of carbon markets and the influx of talent and capital into the climate tech space,” says Le Hoang. “Over the next 10 to 20 years, we'll move towards decentralisation, circularity, and technological sovereignty. The change will be massive.”
Coal power plants, fossil fuels used in transportation, and natural gas for industrial heat are prime examples of how the fossil-based technology stack of major industries is ripe for disruption, he adds.
“From an entrepreneurial perspective, this is a massive opportunity to build the next generation of industry-defining companies,” says Le Hoang.
ten Have sees incredible promise in sustainable aviation fuels made from carbon dioxide, she says she’s seeing startups and scale-ups making significant strides in this area.
“The term 'decarbonization' often gets thrown around, but technically, it's about 'defossilizing'—removing fossil fuels from the equation. The world is built on carbon; it's a key building block. If we can replace fossil fuel-derived carbon with carbon from other sources, like carbon dioxide, it would be transformative,” says ten Have.
The promise of replacing fossil fuels with clean alternatives in the foreseeable future is a silver lining for humanity’s co-existence with nature, but the scale of the challenge ahead in a fossil-fuelled world with many incumbents still resistant to change and enjoying government subsidies remains daunting.
“If you look back at history,” says ten Have, “every time something new and groundbreaking was invented, scientists used to think, ‘Okay, that's it, we've done everything, there's nothing new to find out.’ But every single five years, there's a new groundbreaking thing that comes through. It means that in five or ten years, something we can’t even imagine today will become a reality. That gives me hope.”
Climate tech may hold the promise of profit and tremendous investment potential. But for Visionaries Tomorrow Founding Partner, Pollok, it’s personal: “I became a father three years ago, which adds an emotional and personal motivation for me.
“To me, entrepreneurship means looking at problems from different angles and not accepting the status quo, but striving to make a difference.”
