The European Investment Fund (EIF) announced today it would invest €40mn with Blume Equity. Based out of London, the VC was founded by three women in 2020, and invests into European high-growth climate tech scaleups.
Blume Equity backs companies focusing on decarbonisation as well as broader environmental sustainability. These include carbon accounting platform Normative, sustainable femtech startup Elvie, Matsmart Motatos that looks to combat food waste, and IoT industrial SME data support provider Sensorfact.
The €40mn comes from the InvestEU program as part of the EIF’s mission to support high-growth and innovative SMEs across Europe, along with a regional mandate from the Dutch Future Fund. EIF joins other Blume Equity investors, including Swedish pension fund AP4 and Visa Foundation.
“By supporting Blume with one of the largest investments EIF has made to a first time fund, the European Union highlights its commitment both to the environment and to supporting the growth-stage ecosystem in Europe,” said Clare Murray, one of Blume Equity’s co-founders and partners. “This partnership will help us continue our profit with purpose mission to support entrepreneurs tackling the climate emergency.”
Cutting-edge technology to play a major role in EU green transition
Climate tech investment pace has suffered along with other funding over the past year. However, there is reason for optimism for the sector — ironically, much due to the all-too immediate urgency of tangible climate events, such as the wildfires and floods of the summer.
According to a report published by the Economist last week, VC investment in climate tech has surged over the past decade. Meanwhile, the recent slowing down highlights the need for a diversification of funding sources. This includes government agencies and alternative pools of capital, such as pension funds.
“The green transition must be accelerated to meet our current climate and environmental challenges,” EIF Chief Executive Marjut Falkstedt commented. “Innovation in all sectors of our economy and cutting-edge technology will play a major role in achieving it. With the backing of the InvestEU programme and the Dutch Future Fund, we are very happy to invest in the female-led Blume Equity Fund to support disruptive businesses with a positive impact on people and planet.”
More money for climate tech to grow
Meanwhile, London-based HSBC also announced today it would make $1bn (€940mn) in funding available to climate tech startups globally. The banking and financial services company said it expected the funds to go toward EV charging, battery storage, carbon removal technologies, and sustainable food and agriculture. Indeed, the Economist study identified food and agriculture technology as a sector that is receiving disproportionately little funding compared to its contribution to global carbon dioxide emissions.
Furthermore, HSBC also launched a new climate-tech venture capital strategy, and will invest $100mn (€94mn) in Breakthrough Energy Catalyst, a separate platform that supports cleaner energy source technologies.
“Access to finance is critical for early-stage climate tech companies to create and scale real-world solutions,” said Barry O’Byrne, CEO of global commercial banking at HSBC. They also need ample support in making the jump from early to late stage — a funding gap that is gaining more and more attention.
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