VC spotlight with World Fund

TL;DR

• Europe’s most significant climate tech fund emerged from stealth with a stern belief that companies who help us to achieve a decarbonised world will be the most valuable over the next decade.
• We spoke with Victoria McIvor on the pace of the European market, measuring ESG in portfolio companies and their latest investment — Space Forge.

The quickfire round…

Where are you based?

The team are remote first, but with people on the ground in Berlin, Cologne, Barcelona, Amsterdam and Munich.

What sector and stage do you invest at?

A broad but strict thesis; companies will have to show they can reduce greenhouse gas emissions by at least 100 megatonnes of CO2 annually.

Cheque sizes range from €1–8m to invest in key verticals (as major carbon-emitting sectors) Energy, FALU (Food, Agri & Land Use), Transport & Mobility, Industry & Materials and Buildings within Europe.

What is the background of the partners?

The team has an immense record of building and investing in industry-defining businesses.

Danijel Visevic is a journalist and climate tech thought leader, previously working in the comms team for Angela Merkel, and was the director of communications at Project A Ventures.

Tim Schumacher founded and IPO’d the domain marketplace Sedo, was co-founder and Chairman of Eyeo, and has made over 40 individual investments including CarbonCloud and Ecosia.

Daria Saharova has spent over 15 years investing at leading European venture capital funds such as HV Capital, Sevenventures and Vito ONE.

Craig Douglas has spent 10 years investing in energy tech at SET Ventures and is an Advisor to the Cleantech Group, as well as an ESG & Impact specialist having trained over 50 funds on best practice.

We spoke with Victoria McIvor, who joined from energy-focused VC, SETVentures, motivated by the incredibly diverse founding team driven to make a lasting change.

A deeper dive into Europe’s most prominent climate tech firm…

Besides Pale Blue Dot and 2150, why do you think Europe lacks bigger climate-focused firms than the US?

This is a question we ask ourselves at the World Fund, and is all the more surprising when you consider the political backing and strong research base we have in Europe.

We are not lacking in climate tech startups either. If you hone in on battery companies, from 2019–2020 we had more companies founded here (102) than US and China combined (80). So the investment opportunity exists, but European funding does not. I think the answer is that this problem isn’t a climate-specific issue but the VC landscape in general. We simply have a gap in growth financing in Europe that needs to be addressed.

How has COVID impacted the climate tech scene? For better, or for worse?

I observed a brief dip in investment at the onset of the pandemic. Also, a number of companies I know faced challenges in production or had their sales impacted. However, things have quickly recovered. I have seen an unexpected positive impact in the increased general awareness of the disruptive potential of global events. Climate risk and climate adaptation measures, particularly in supply chains and infrastructure, is now front-of-mind for many organisations. I think the reality of COVID across geopolitical boundaries has a part to play in that.

How are you putting your planet-first values into practice?

Impact and ESG is a key focus of the World Fund. We plan to save 2 Gigatonnes of Carbon dioxide equivalent (CO2e) yearly from 2040 onwards with our portfolio, and take this ambition seriously. Prior to any investment, we make a thorough assessment to get comfortable that the company meets our CO2e savings threshold and post-investment, we do an impact assessment of each portfolio company to establish impact targets. We have linked our carry to meeting these targets — so we put our money where our mouth is.

As for ESG, this is incorporated into every stage of our investment process and our documentation. We work with our portfolio companies to develop concrete ESG action plans and reporting structures, and support them with the implementation. Our internal ESG and D&I Policy also establishes core principles. An example is minimising flights and off-setting them when unavoidable. In that case, we also pay an internal air-fuel tax to NGOs fighting for just air travel taxation.

What do you do outside of work to change the environment positively?

Since joining the World Fund, I have been impressed that everyone does their bit on a personal level, be that through lifestyle choices or initiatives in their free time. It’s very cool to be around.

I try to do my bit through a foundation I have set up in the Netherlands, which includes an event series I have co-founded with a fantastic group and am super excited about — The Climate Lab. We are getting experimental with event structures and audience participation to try to crowdsource solutions to some of the challenges climate tech pioneers are facing, whilst of course, having fun.

What company did you last publically announce investment in, and why did you have conviction around this opportunity?

Our latest investment is into the British company Space Forge, who are building retrievable satellites for in-orbit manufacturing — dramatically reducing greenhouse gas emissions. They are a first-mover with a really promising technology that taps into three major trends; increasingly available and cost-efficient access to space, a need for solutions to current manufacturing limitations (microgravity, vacuum, and low-temperature demands) and a huge and growing energy-intensive semiconductor market. The first launch is expected next year — so watch this space. Read more about the round here.

Impact vs returns at first meeting; how do you think about this trade-off, and what values do you look for in a founder?

Companies do not become successful despite but because of their impact mission. A company cannot reach its impact potential if it doesn’t solve a customer problem and execute successfully; vice versa, we have the strong conviction that the next generation of unicorns will be ‘climacorns’.

We see high climate performance potential as a leading indicator of potential future success. Given that, we are looking for mission-driven and exceptional entrepreneurs who are building a market-leading product, and of course surrounding themselves with an outstanding team.

How optimistic has the COP26 summit made you?

The level of broader public attention it received, as well as the commitments and leadership demonstrated by many European governments, is of course heartening. However, in my view, COP26 has shown more than anything that we cannot rely on governments alone to drive this change.

What value-add do your LPs bring to the table?

We love our LPs; we have more than 120 individuals who have built or invested in the top scale-ups around Europe (our LP base includes >10 unicorn founders). We are also working with some globally recognised financial institutions and corporations. All of these parties recognise the value and potential of the emerging climate tech sector and bring their passion to be a part of it, which is fantastic. We’re very proud that a significant majority are actively involved in deal-flow, knowledge sharing and, in a number of cases, are supporting our portfolio companies directly.

For more information on World Fund, visit their homepage here.

Are you a founder raising institutional funding? Head over to our new resources page, list of funds with fresh capital or get in touch with a team member here!

If you are a VC fundraising in Q1 this year, don’t hesitate to register your interest in attending our next conference later on in the year in Soho.

Read previous VC spotlights with Form Ventures here and Lunar Ventures here.