For leading European VC firm World Fund, investing in climate tech is no longer just about cutting emissions and protecting the environment.
It’s about cutting Europe’s dependency on increasingly unstable global markets and making the continent more self-reliant and resilient.
"Climate tech can be a key part in making Europe more resilient," World Fund Principal Nadine Geiser tells Impact Loop. "I think many people don't see that importance right away because they feel climate tech is more about protecting the environment. But actually, if you look into the areas we invest in, these are technologies that are very crucial in reducing our reliance on external parties and making us much less sensitive to any type of global shifts."
'Now or never' moment for Europe
With a €300m fund, World Fund has established itself as one of Europe’s leading climate tech investors less than five years after it was formally launched. The Berlin-based VC recently issued a white paper dubbed The Importance of Climate Tech for European Resilience, arguing that green technologies are key to cutting Europe’s dependence on raw materials from China, energy from Russia and security aid from the United States.
And that was before Donald Trump’s meeting with Ukrainian President Volodymyr Zelensky in the White House further highlighted that Europe may not be able to rely on the United States as a key ally anymore.
“With the most recent geopolitical developments, it has become even more clear that this is a ‘now or never’ moment for Europe,” Geiser says. “If we don’t prioritise certain topics right now, they might not happen in the future because Europe might look different in the future. We are living in a much more sensitive system now, but we think it's not too late. Now is really the time to revisit the resilience debate and make it a key priority for European nations.”
World Fund has identified four key areas that can boost that resilience: energy sovereignty, food security, access to raw materials and what it calls “frontier” technologies – cutting-edge areas within biotech, fusion, robotics, space tech and other industries.
Those frontier technologies are areas where Geiser says Europe has traditionally excelled at research and development, but then failed to offer the needed late-stage funding for companies to grow – often leading to successful startups having to relocate to the United States.
One of the reasons for that, Geiser points out, is that Europe only spends 0.2 percent of its GDP on venture funding on average, compared to 0.7 percent for the U.S.
So, she says, European investors end up taking a lot of tech risk, without reaping the final rewards.
“We often lose those frontier technologies at the later stages when they are much more advanced," argues the VC. "If we increase late-stage funding we would really enable those companies to keep their footprint in Europe. Of course, if you want to be a successful company, you always need to become a global player. The question is, where are your headquarters and where are your operations and who owns the technology?".
She continues: "We would like to see increased investments in later-stage venture funds in Europe so we can continue backing those companies and make sure they can stay afloat and not rely on parties from other geographies.”
World Fund’s own strategy is based around having the ability to do just that. About two-thirds of its fund is set aside for follow-up investments in its own portfolio companies.
“We recognise that with early-stage investments, we need to support you for a longer time,” says Geiser. “That’s why we constructed the fund so that companies won’t need to close up shop before they even have a chance to grow.”
One example is Planet A Foods, a producer of cocoa-free chocolate, which recently raised €28 million in Series B funding despite a tougher overall environment for climate tech startups.
That’s also a company that Geiser says highlights the importance of decreasing Europe’s dependence on other markets.
“We actually anticipated early on that the cocoa market would be under a lot of pressure, because climate change is destroying or harming cocoa plantations," Geiser says. "Now cocoa prices are up so everybody is looking for alternatives. And many of Planet A’s customers are signing longer contracts because they see that this also brings resilience to their supply chains and makes them independent of the cocoa prices.”
World Fund is expecting to make around five to eight new investments in 2025, Geiser says. While the fund is sector agnostic, it only backs companies that have the potential to save at least 100 megatons of greenhouse gas emissions on an annual basis by 2040.
That said, decarbonisation is not the only criteria it looks for.
“We only invest in companies that have the potential to sell to a climate denier, who will buy it because their product doesn't rely on a green premium but is just cheaper than an existing alternative," Geiser says. "And the performance of that product is even better."
Geiser says World Fund welcomes pitches from founders in any sector, but has this advice to anyone who wants investment.
"No company is perfect. Especially in the early stages, there will always be a bit of a construction site," she says.
She believes the key factor is people and their time allocation. "The one thing you can really think about is, who are the people you hire and how do they spend their time?"
For her, effective talent management signals a promising investment. "The best companies are those where I have an impression that the founders are really trying to make sure there is no misapplication of talent and time."
A core message is that there will inevitably be challenges, but proper prioritisation can help tackle this. "There will always be technical and financial risks, but if we feel they're all working on the right things, then this is a company we would like to see."
