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Malmö-based venture capital firm Pale Blue Dot has raised €87 million (approx. US$104 million) after a final close of its debut fund dedicated to investing in climate tech startups. The impressive capital close comes just 18 months since the firm began fundraising, testament to the strong interest in sustainability and climate-focused investments in Europe and beyond.
Pale Blue Dot, the Swedish climate investment firm, has closed their fund with €87 million (approx. US$104 million) after bagging an initial €53 million (approx. US$63.7 million) in 2020. The fund will be exclusively dedicated to backing early-stage startups developing climate and sustainability solutions.
Investors that joined the fundraise include Prima Materia, the firm co-founded by Perfect Day investor and Horizon Ventures advisor Shakil Khan and Spotify CEO Daniel Ek. Pirate Impact, a Berlin-based family office focused on impact startups, and founders of big name firms like Delivery Hero, Wise and Contentful also participated in the round.
Pale Blue Dot plans to use the funds to invest in 35 pre-seed and seed-stage companies over the next few years, with ticket sizes varying between €200,000 to €2 million (US$240,000 to US$2.4 million). The latest close comes just 18 months after Pale Blue Dot started raising capital, suggesting the strong interest and demand for ESG-led investing approaches and bullish sentiment for the climate tech sector.
Over the past year, especially in the wake of the pandemic, investors around the world have been turning to sustainable investing approaches that have proven to bring superior risk-adjusted returns.
We’re happy to see the great interest in investing in climate by people who see that a sustainable world is a good investment.Hampus Jakobsson, General Partner, Pale Blue Dot
Some of the firms already in the venture capital’s portfolio include Hier Foods, the app that connects regional suppliers with food companies, and Overstory, the “planet intelligence” startup that uses AI and machine learning to monitor the Earth’s natural resources.
Among the other companies that Pale Blue Dot has backed are Phytoform, a London-based firm developing new sustainable crops using computational biology, and San Francisco’s carbon sequestration platform Patch.
While it will dip its toes into the climate tech space in the U.S., Pale Blue Dot is primarily focused on European startups and is positive on the region’s trajectory given the strong climate ambitions of the E.U. and the strong consumer demand for sustainable products and solutions.
It will invest in companies across a wide range of industries, from clean energy to agri-tech, food upcycling and alternative protein companies, as well as fashion and fintech.
We want to pick the people who will run the future of the world. We have to be hyper responsible.Hampus Jakobsson, General Partner, Pale Blue Dot
“We’re happy to see the great interest in investing in climate by people who see that a sustainable world is a good investment, and to see the backing by influential people from the startup scene makes us optimistic about the future,” said general partner Hampus Jakobsson in an interview with Tech EU. Jakobsson co-founded the venture with Heidi Lindvall and Joel Larsson.
Lindvall explains that Pale Blue Dot is searching for companies “solving big problems” using technology. “Great founders with big ideas can come from anywhere. We’re excited to back future founders who are helping to build the solutions that we so urgently need.”
The founders say that to make a real impact, Pale Blue Dot will hone in on firms that affect systemic change, rather than consumer behaviour. That means fewer companies developing things like a tool to filter out unsustainable products on a website, and more in the direction of actual companies developing sustainable products.
“We have to really figure these things out,” explained Jakobsson, in a separate interview with Sifted. “We want to pick the people who will run the future of the world. We have to be hyper responsible.”
Lead image courtesy of Pale Blue Dot.