European early-stage (pre-seed to series A) venture capital fund Revent plans to reach a target of EUR€50 million (US$60 million) fund, with an impact focus to benefit startups that focus on environmental and societal issues with a ‘purpose and profit’ motto.
With its headquarters in Berlin and investments in Europe, Revent is looking to invest in companies that are developing solutions around climate change, heath and economic growth.
The founding partners are Otto Birnbaum, who was previously with French VC Partech, but also worked at HelloFresh; Dr. Lauren Lentz, formerly of McKinsey and an expert in impact measurement; Emily Brooke MBE, founder of Beryl, a micromobility startup; and Henrik Grosse Hokamp, who worked previously for Partech’s late-stage fund.
The main investor in the VC firm is Benjamin Otto, part of the family behind the German e-commerce giant Otto Group. Other investors include his father, Michael Otto, Contentful cofounder Sascha Konietzke, N26 cofounder Max Tayenthal, e.ventures partner Luis Hanemann, Urban Sports Club cofounder Benjamin Roth and Project A Ventures partner Florian Heinemann.
Lauren Lentz, founding partner at Revent, who has a background in impact measurement shared that the company is entering into the era of the purpose economy. “It’s no longer about what can be built, but what should we build and what change should we make to the planet and society. Purpose-driven companies will be the most successful companies of tomorrow. They’ll be able to attract the best talent, they’ll be in tune with changing consumer sentiment and they’ll be able to make more money as a result.”
We are entering into the era of the purpose economy. It’s no longer about what can be built, but what should we build and what change should we make to the planet and society. Purpose-driven companies will be the most successful companies of tomorrow. They’ll be able to attract the best talent, they’ll be in tune with changing consumer sentiment and they’ll be able to make more money as a resultLauren Lentz, founding partner at Revent
Commenting on the launch, Otto Birnbaum said that the team isn’t acting as philanthropists. “Instead our aim is to demonstrate that achieving very attractive financial returns is possible precisely because of the positive impact these companies will achieve.”
With raising EUR€20m to back ‘for profit, for purpose’ startups, Revent has invested in Tomorrow Bank, a sustainable challenger bank based in Hamburg; Sylvera, a London-based company that created AI-enabled monitoring of nature-based carbon offsetting projects; Tmrow, a Denmark-based team developing technology products for people to understand and reduce their carbon footprint; and net purpose, an impact data stream for asset managers with an analysis of the quantitative net impact of their portfolio.
Lentz said that the team plans to make around 20 investments out of the first fund, targeting 10% ownership. “We will also save around 60% of its capital to follow on pro-rata and to double down on winners; and may also invest in a handful of later-stage deals to show founders what is possible in this space”.
Revent has a strict assessment process that covers the founders’ motivations and the impact potential of the company. Brooke shared that many founders automatically drop out as they don’t care about impact. “It’s self-selecting; our positioning and thought process resonates with founders who are intrinsically motivated to do this.”
Lentz shared the next stage is called a forecast impact. “Forecasts are always wrong, however they do force you to be structured around your assumptions. What difference will this make for people and the planet, based on the science, based on the literature? What do we think the impact achieved in 8 to 10 years would look like? What do we think the scale and depth of the impact will be? And does it have unicorn potential, could it make EUR€100m (US$121M) ARR [annual recurring revenue]?”
Going forward, Revent is presented with new challenges such as getting institutional investors on board given that they have apprehensions surrounding if it is a good time to invest in an impact fund.
Measuring its own impact as a fund, Revent’s goal is to positively affect the lives of 1 million people and reduce 5 million tons of CO2, tracking this over time.
Otto said that with the launch of this fund, the team aims to create a platform that offers optimal support to founders. “Social and ecological challenges have reached a new level of urgency. We depend on entrepreneurial innovation to find new solutions. With Revent, we want to create a platform for founders to contribute to a change in mindset: Entrepreneurial success and social-ecological impact can reinforce each other.”
In the past few years, several venture capital firms are launching impact funds that help mitigate the effects of climate change. A recent report found that investors are giving money to sustainable funds in record amounts, because in 2019, mutual funds and exchange-traded funds (ETFs) that focus on environmental sustainability, attracted a record-breaking US$20.6 billion in new total assets.
For instance, AgFunder, a VC firm focused on agri-food tech startups based in Silicon Valley and Singapore, started a GROW Impact Fund, a first of its kind to encourage technologies that will perform on environmental, social, and governance (ESG) metrics across the food system.
New York and Singapore-based venture capital firm, Big Idea Ventures recently unveiled a Generation Food Rural Partners (GFRP) fund that aims to strengthen rural economies across the U.S. through alternative protein innovation and other agricultural technologies.
Even Hollywood is understanding the potential of venture funds focussed on sustainability with actor Robert Downey Jr forming a new venture fund FootPrint Coalition Ventures that aims to ‘catalyze more capital’ to multiply the impact of tech-forward climate solutions and innovations.
Lead image – Revent’s Partners Emily Brooke and Otto Birmbaum. Courtesy of Revent