Seaya Ventures raises new Article 9 rated climate fund

Madrid-based Seaya Ventures today announced the first closing of a new fund focused on sustainability. The new source of cash will be invested in startups working in four main areas: food value chains, agritech, circular economy, and “green tech,” a confusing term that, for Seaya, covers the technology that enables the production and distribution of green energy.

€130 million has already been committed from investors, including the Spanish energy company Iberdrola, the Spanish government-backed fund ICO Next Tech and Nortia Capital. The fund, called Seaya Andromeda, has a final target of around €300 million.

Like previous Seaya Ventures funds, Andromeda will invest from Series A, with ticket sizes expected to range between €10m and €15m. The team will primarily focus on southern Europe, but will also look at opportunities across the continent. Seaya’s broader portfolio includes companies such as Glovo, Cabify, Wallbox and Capchase.

The new fund is classified as an “Article 9 Fund” as part of the EU new sustainable finance regulationswhose goal is to hold self-described “sustainable” investment vehicles accountable.

What does article 9 mean for the Seaya Ventures venture capital fund?

Unlike other Seaya funds, Andromeda is selling out entirely to sustainability and is therefore the first to earn Article 9 classification. What does that mean?

“You have to go through a very tough process in front of local regulators. Specifically in Spain it is the CNMV”, says Antonio Giménez de Córdoba, a partner at Seaya. “This is something that has been framed very deeply, and we need to go through the process and measure [KPIs] before the investment, during the investment and post-investment. So this is something we’ve been working very hard on.”

In terms of what those KPIs look like, it varies by subsector, says Carlos Fisch, director and sustainability specialist at Seaya Ventures.

“We have certain specific SDGs (sustainable development goals) assigned to each of the verticals,” he explains. “So for agritech it’s things like life on earth, Zero Hunger, Sustainable consumption. For circular economy startups, it is measured by the amount of resources saved or recycled, so it depends on the business model.”

Some environmental observers have raised concerns that the new EU regulations carry a risk of greenwashing because some funds have received sustainable ratings without changing much in the process.

However, Giménez de Córdoba disagrees: “I think it’s really positive that this framework is quite strict and I think we are really adopting it.”

neither one nor the other

He adds that he doesn’t think there’s a trade-off between high-yield investments and impact opportunities, pointing to some of the success stories from Seaya Ventures’ portfolio, such as car charger start-ups. wall box and sustainability technology platform ClarityAI.

“We have proof points, so it’s not like we say it out loud and we can’t do it. We have done it and that is why we are doing it more systematically with this specific fund”, he says. “We have shown that you can provide very good returns to your investors who invest in these types of companies. We see big tailwinds in the sector, so there will be very good opportunities in this specific space, so we are optimistic.”

Tim Smith is the Iberia correspondent for Sifted. He tweets from @timmpsmith

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