World Fund: New €350M Climate VC Fund by Ecosia

Ecosia's Network Launches €350 Million Climate Tech VC Fund

Previously, Ecosia may have been perceived as a search engine with the added benefit of planting trees with each search. However, the reality is that Ecosia’s founders and associated network are deeply committed to addressing climate change. In March 2020, prior to the widespread impact of the pandemic, this network convened and determined that a new venture capital fund was necessary to confront the climate crisis through innovative means.

Introducing World Fund: Europe's Largest Dedicated Climate Tech VC

Consequently, World Fund, a new venture capital firm specializing in climate technology, is now launching with a substantial €350 million fund. The fund’s objective is to support startups developing technologies capable of aiding in the decarbonization of the planet. World Fund asserts its position as Europe’s largest dedicated climate tech VC.

Rapid Fund Growth

The swift accumulation of this fund size can be attributed to its composition of over 60 investors. These include both current and former European tech entrepreneurs, alongside a limited number of institutional limited partners, facilitating a relatively quick fundraising process.

Investment Focus Areas

Incubated by Ecosia, the fund will concentrate its investments on key sectors including energy, transportation, food and agriculture, manufacturing, and buildings. The built environment, as has been observed, significantly contributes to CO2 emissions, with cities responsible for over two-thirds of global energy consumption and more than 70% of worldwide CO2 output.

Ambitious Emissions Reduction Goal

World Fund has set a mission to mitigate 2 gigatons of emissions by the year 2040. This equates to approximately 4% of all global emissions. While a significant target for a single firm, the overall challenge remains immense, requiring a 50% reduction in global emissions by 2030 to maintain a reasonable chance of limiting warming to 1.5 degrees Celsius.

Climate Performance Potential (CPP) as a Key Metric

A crucial element of their strategy involves utilizing what they term Climate Performance Potential (CPP) as a primary indicator for investment decisions. Each company receiving funding from World Fund must demonstrate the capacity to reduce greenhouse gas emissions by at least 100 megatonnes of CO2 annually, as the firm believes that only companies enabling a decarbonized world are poised to become the most valuable entities in the coming decade.

Statements from World Fund's General Partners

Danijel Višević, general partner at World Fund, stated: “Europe must move beyond its reliance on fossil fuels. This continent possesses the necessary research, innovation, and political awareness to lead the global fight against climate change. However, a lack of venture support has hindered the scaling of these solutions. World Fund aims to be the definitive partner for European tech entrepreneurs who will build the most valuable companies of the next decade while addressing the climate crisis.”

Europe's Potential in Climate Tech

Focusing on Europe as a hub for climate tech investment appears strategically sound.

Between 2019 and 2020, Europe generated 50% more climate tech patents than both the U.S. and China combined. However, up to 2013, European companies received only €6 billion in VC funding, compared to €25 billion and €17 billion invested in the U.S. and China, respectively.

Funding Landscape Comparison

World Fund’s research indicates that North America has 41 funds with assets under management exceeding $100 million, while Europe has only six. Moreover, the majority of specialized European climate tech VC funds manage less than $40 million for backing disruptive technologies.

Notably, between 2019 and 2021, more climate tech companies were founded in Europe (102) than in the U.S. and China combined (80).

Additionally, the European Commission’s Horizon 2020 fund is allocating €33 billion to climate-related research and development.

The World Fund Team

The fund’s team comprises Tim Schumacher, co-founder of Sedo and an investor in Ecosia, Zolar, gridX, Pachama and CarbonCloud; Danijel Višević, a former journalist specializing in climate tech, startups, and venture capital; and Daria Saharova, with experience at SevenVentures and Holtzbrinck. The team is further strengthened by Craig Douglas, formerly of SET Ventures, and Christian Kroll, founder and CEO of Ecosia, serving as a venture partner.

Initial Investments

World Fund has already made investments in three companies: a startup focused on meat alternatives, one dedicated to waste reduction, and Qoa Company, which provides a substitute for Cocoa, a significant source of CO2 emissions in agriculture.

Competition and Collaboration

Other organizations with similar goals to World Fund include Astanor, Pale Blue Dot, and 2150 VC, which recently secured a $312 million fund.

Expertise and Advisory Board

The investment team includes a diverse range of experts, including mechanical and chemical engineers, physicists, and a mathematician. The limited partner base includes Trivago co-founder Rolf Schrömgens, Econos founder Alexander Samwer, entrepreneur Verena Pausder and her husband Philipp Pausder, founder of Thermondo.

A leading scientific and advisory board further supports World Fund, featuring Professor Dietmar Harhoff from the Max Planck Institute of Innovation & Entrepreneurship, Dr Gregor Hagedorn, founder of Scientists for Future, and Simone Kaiser, Deputy Head of Responsible Research at the Fraunhofer Institute.

Final Thoughts from World Fund's Leadership

Tim Schumacher, general partner at World Fund, commented: “My decade of experience investing in technology, including both conventional software and climate tech, has shown me that climate investments consistently outperform others. This is likely due to the high caliber of individuals drawn to solving humanity’s greatest challenge. At World Fund, we recognize that profitable and scalable technology is essential to tackling climate change.”

Daria Saharova, general partner at World Fund, concluded: “There is a substantial opportunity to support startups that are reversing the effects of the climate crisis and transforming entire industries. Startups addressing climate change require substantial funding and unwavering support to realize their full potential, from agricultural innovations to battery technology.”