As an anchor investor SmartCap Green Fund invests 20 million euros in 2C Ventures Fund I dedicated to green technologies
Through its “Greentech Fund 2022/09” as an anchor investor SmartCap Green Fund is investing 20 million euros in 2C Ventures, Estonia’s first investment fund focusing on clean technologies. The 2C Ventures fund with a total size of 50 million euros, aims to improve capital accessibility for startups developing clean economy technologies of the future.
“This first fund investment by SmartCap Green Fund as an anchor investor is aimed at diversifying the supply of venture capital for innovative startups in Estonia, strengthening the local venture capital community with a new market player, and establishing the groundwork for successful private capital engagement,” said Sille Pettai, a board member and fund manager at SmartCap.
The new investment fund launched by 2C Ventures is Estonia’s first to exclusively focus on clean economy technologies. With a total size of 50 million euros, the fund aims to solve environmental problems, adapt to climate change, increase venture capital supply for Estonian clean economy companies, and make a climate-neutral economy a competitive advantage for Estonia.
“The life cycle of companies developing research-intensive and generally non-software solutions is usually longer compared to software-based startups, and their capital needs are greater. Attracting external capital has been more challenging for such startups. On the other hand, we see strong teams and ambitious ideas among startups in Estonia and the neighbouring countries, and we want to support them in achieving global success with our fund,” explained Hendrik Reimand, a partner in the fund.
2C Ventures will invest in clean tech startups in the Baltic and Nordic regions, with a primary focus on Estonian-based companies. The investments will target startups in renewable energy, waste reduction, water management, circular economy, and other environmentally sustainable technologies. Investment per startup will range from 300,000 to a million euros, depending on the stage of the startup.
“The need to adapt to climate change and operate sustainably has been a part of everyday life and global agreements for a long time, but new technologies and sustainable solutions supporting them have not reached the market at the expected pace. The changes needed can be accelerated through precisely targeted and smart investments, and so the newly established investment fund is highly anticipated in the Estonian market,” said Sille Pettai. “Investments in green technologies could be one of our competitive advantages, and startups funded by such investments have the potential to become leaders in the green economy.”
“The 2C Ventures team has the prerequisites to successfully find promising future technologies in the clean economy in both Estonia and our surrounding region, contribute to technological development, and support the international growth of startups with their previous experience,” added Pettai.
Besides SmartCap Green Fund as the anchor investor, other investors mainly include Estonian entrepreneurs from the technology, energy, construction, and forestry sectors.
2C Ventures’ partners include Herty Tammo, the founder of Startup Wise Guys; Hendrik Reimand, former investment specialist at Livonia Partners and financial director of the technology company Katana; Taavi Veskimägi, former finance minister and long-time CEO of Estonian national TSO Elering; and Martin Koppel, co-founder of the technology company Fortumo and technology investor.
The principal investment objective of the 100-million-euro SmartCap Green Fund is to support Estonian early-stage green technology companies with high growth potential that operate in one or more of the strategic areas (energy, agriculture, food industry, transport and logistics, material and chemical industry, and the environment).
In September 2022, SmartCap Green Fund announced a Call for Expressions of Interest to find up to two private fund managers, who would establish green technology investment funds to which SmartCap Green Fund will make a cornerstone investment of 20 million euros each.
Alongside the investment in the 2C Ventures fund, preparations are underway to complete the investment in the second green technology fund, where SmartCap Green Fund is an anchor investor.
SmartCap Green Fund is funded by the European Union’s NextGenerationEU recovery fund (RRF).