Systemiq Capital announces $70m first closing of Fund II, targeting $200 million, to amplify Climate Tech Revolution

• VC fund steps up “capital for systems change” as it boosts support for early-stage climate tech companies that will accelerate the transition to a resilient, clean and just global economy.

• Founding shareholders Paul Polman, Jeremy Oppenheim, Systemiq and Irena Spazzapan are joined by a coalition of sustainability leaders, including well-known CEOs and investors, to back climate tech’s most promising, market-shifting entrepreneurs, in order to catalyse change.

• Fund promises “more than cash and contacts” as it plugs innovators into unparalleled ecosystem of global business leaders, policy-makers and climate experts, to deliver outsize financial returns and climate impact.

• The fund aims to back the firms that can build the systems underpinning a safer planet and stronger economy. Core investment areas are food and material production; transportation; the way we finance these activities; and how we deal with the impacts on the environment

Climate-tech VC fund Systemiq Capital has today announced the $70m first close of its second fund, targeting $200 million to continue backing the best early-stage climate tech entrepreneurs. This will build on the success of fund I, which launched in 2018 and has since deployed $30m of capital towards leading climate tech companies and achieved three exits.

The Europe-based fund links fast-growth climate change innovators with its global network of corporates, policy-makers, and follow-on investors to allow early market adoption. It supports companies which, if scaled, can drive systemic change in four areas at the heart of the fight against climate change: sustainable food and materials, clean transport, climate intelligence and finance, and climate restoration. Existing portfolio companies include those working in synthetic biology and regenerative land use, new chemistries driving low carbon materials; direct and indirect electrification of transport; AI, geospatial analytics and next-gen computing solving for climate; carbon removals and biodiversity restoration.

Systemiq Capital is the latest venture by Paul Polman, Jeremy Oppenheim, Systemiq and Irena Spazzapan. Polman led consumer goods giant Unilever until 2019, where he increased investor returns by 300% while ensuring the company consistently ranked #1 in the world for sustainability each year. He served on the High-Level Panel that developed the UN Sustainable Development Goals. Oppenheim, a former World Bank Economist and experienced angel investor, built and led McKinsey’s global climate practice for over a decade, and founded system change company, Systemiq. Spazzapan, a former Goldman Sachs commodities executive, has built the early-stage investment practice at Systemiq.

Systemiq Capital, while fully independent, connects its entrepreneurs to this wider ecosystem, where they access deep knowledge of the trends shaping their sector, support navigating the shifting international regulatory environment, and help forging relationships with industry peers as well as partners across government and civil society.

Commenting, Paul Polman said:

“We are finally starting to see momentum for a cleaner, fairer, more resilient economy build across business, in finance, among governments and in wider society, and the big question is how can we accelerate these shifts? Making sure the best climate tech innovations are ready and available is key. “From developing the home chargers that are essential for getting people into electric vehicles, to pioneering short haul hydrogen flights, these are the start-ups that can catapult our climate ambitions while securing exceptionally healthy returns. But in order to grow, these businesses need more than ‘cash and contacts.’

“Systemiq Capital offers its entrepreneurs, it’s investors and humanity a tremendous alignment. In sectors where you have established demand from the market, established need for the planet, and governments and regulators are setting the direction of travel, we bring capital, acumen, expertise and connections. All driven by a shared hunger for systems change”.

It has been widely acknowledged that every aspect of the global economy will need to undertake an unprecedented, rapid transition to more sustainable ways of operating over the next decade in order to avoid the worst effects of the climate crisis. The United Nations Intergovernmental Panel on Climate change has warned that there are less than 10 years to halve global GHG emissions in order to stay under two degrees Celsius and $32 trillion of investment in decarbonization is needed this decade to put the world on a path to net zero.

Investment into climate tech businesses has increased rapidly over recent years; PWC reported $87.5bn was invested over H2 2020 and H1 2021 – a 210% increase from the US$28.4bn invested over the previous twelve months. Climate tech now accounts for 14 cents of every venture capital dollar; however it’s not just finance that is essential to enable ambitious start-ups to succeed.

Irena Spazzapan added:

“The level of talent and innovation among climate tech entrepreneurs right now is immense but we know that, as they face the challenges of commercial scale up, their network of experts, advisors, peers and policy-makers can be as vital as the financing. Systemiq Capital is uniquely placed to identify outstanding early-stage companies and position them in this wider eco-system for success.

“We are thrilled at the appetite we’ve seen for Fund II. This is capital for systems change, and the strong message from our backers is that we’re filling a major gap in the investment landscape, and it is overdue.”

Investors to date for Fund II include Lombard Odier, Andre Hoffman, The Grantham Foundation for the Protection of the Environment, Dara Holdings, Deutsche Post Foundation, Stephen Brenninkmeijer, Mark Cutifani, Erik Fyrwald and Chad Holliday, with investors from Fund I increasing their commitments to Fund II. Having raised $70m of the targeted $200 million to date, the final closing of the fund is anticipated within a year.

From changing the course of the aviation industry to mapping and monitoring businesses’ impact on biodiversity and enabling the futureproofing of physical assets against climate change risk, portfolio companies from Fund I are already creating fundamental systemic change for the benefit of the planet, supported by Systemiq Capital expertise and networks:

• ZeroAvia, which is pioneering short-haul hydrogen aviation to displace aircraft powered by fossil fuels who Systemiq Capital supported to secure their first R&D grant from the UK government and attract further investment across the US and Europe with over $100m of funding raised to date
• Nature Metrics, which established the world’s largest environmental DNA database enabling businesses to better monitor the impacts of their work on biodiversity and the natural world who were supported to become the lead monitoring partner for the UN-led Global Fund for Coral Reefs and brought into a consortium to participate in the Xprize Rainforest. They have recently raised a $15m Series B.
• Jupiter Intelligence, which helps industries to understand and mitigate the risk climate change poses to their physical assets who were supported with their rapid expansion across Europe and Asia and the launch of a free model for developing countries, with $88m of funding raised to date.

Companies within the Fund I portfolio have raised $350m in additional capital and over a third of them have a female co-founder or CEO.

Rich Sorkin, founder and CEO of Jupiter Intelligence said:

“Systemiq Capital became one of Jupiter Intelligence's premier strategic investors 3 years ago. We've benefited immensely from Systemiq's network and introductions to new corporate clients on both sides of the Atlantic. The Systemiq team was also instrumental with the Jupiter Promise, helping us frame the story and funding our services to help low-income countries better quantify, and ultimately address, their physical exposure to climate risk. The team is a joy to work with.”

Led by managing partner, Irena Spazzapan, the investment team has worked together since launching Fund I in 2018 and consists of investment professionals with a combined experience of over three decades in climate and biodiversity technology. Systemiq Capital is chaired by former Actis senior partner Paul Fletcher with advisors including Matthew Goldstein from M12, George Polk from Vision Ridge and tech entrepreneur and investor James Bilefield.