French-Italian early-stage VC 360 Capital, an investor in French robotics unicorn Exotec and quantum computing startup C12, has closed €140m for a new fund dedicated to climate tech, with plans to reach a final target of €200m in 2025.
Italian corporations A2A, a utility company, and De Nora, a specialist in electrochemistry technologies, are strategic backers of the fund — which is classified as an Article 9 fund, meaning that sustainability must be the objective of all its investments.
It will back startups at Series A and B that focus on the energy transition, the circular economy and urban sustainability — with about half of the fund dedicated to hardware startups. Investment themes will include energy storage, hydrogen, waste reduction and smart infrastructure.
“We believe that for our thesis, software is not enough,” 360 Capital partner Cesare Maifredi tells Sifted. “You have to come up with tech that has a physical dimension.”
Initial tickets will range from €2-10m, and about 40% of the fund will be kept for follow-on investments, which could each reach up to €20m.
With 360 Capital having physical presence in France and Italy, it is likely that most of the dealflow will come out of those two countries, says Maifredi, but up to 40% of the new fund will be deployed in the rest of Europe.
Partnering with corporates
In 2020 360 Capital launched its first fund dedicated to climate tech — a €25m investment vehicle that had A2A, an Italian company that provides gas, electricity, water and waste management services, as its single LP.
Maifredi says that this was a “pilot project” for A2A. “The idea was, for us, to make our way into the ecological transition with a pioneering approach, and for them, to scout for innovation in a less traditional way,” he says.
The first fund is now fully deployed and has backed eight startups in Italy, France, the UK, Switzerland and Austria, including Italian long-duration energy storage startup Energy Dome and UK-based waste analytics platform Greyparrot.
The new fund will back up to 20 startups, and has also seen the LP base widen. In addition to A2A, which committed a fresh €40m, the new investment vehicle includes De Nora, an Italian multinational that specialises in electrochemistry technologies such as electrodes and components for hydrogen production, and which invested €10m.
Financial investors also participated, including CDP Venture Capital, the VC branch of state-owned Italian bank CDP, which invested €44m, and French public bank Bpifrance.
A win-win
Maifredi says that 360 Capital is fully independent from its corporate investors. “The governance of the fund is totally on us, we are the only ones on the investment committee and we make the final decision on the investments we make or not,” he says.
The VC team, however, will work closely with A2A and De Nora to source and make deals.
“It’s a win-win because we benefit from the expertise of these corporations and we can leverage their know-how,” says Maifredi, “and at the same time they have direct access to the startups. For example, for the first fund A2A did the first trials for some of the products of some of our portfolio companies.”
It’s not unheard of but unusual for corporations to partner with third-party VCs to make strategic investments into startups. More often, large companies invest directly in startups through a VC branch that is internal to the organisation.
“In our case you can get more with less because the cost associated with this partnership is less than an internal CVC,” says Maifredi.
The new fund hasn’t made any investments yet but Maifredi says that it is in the process of finalising two deals in Switzerland and Italy.
Read the orginal article: https://sifted.eu/articles/360-capital-200m-climate-fund-news/
