The European Investment Fund (EIF) announced on Wednesday that it is investing €50M into World Fund, a climate tech venture capital fund. This marks one of the largest investments EIF has made into a first-time VC fund.
The latest investment is part of EIF’s mission to support high-growth SMEs across Europe and ensure that at least 16 per cent of its activity is in climate and environment-related projects in 2022.
EIF plans to increase this contribution to 25 percent by 2024. The funds will be deployed across Europe with a partial remit to invest in the Netherlands and Germany.
The financing into World Fund comes from EIF’s new InvestEU programme and regional mandates from across Europe, including The Netherlands (DFF), Germany (ERP Special Fund), and Bavaria (LfA).
The InvestEU programme combines all EU financial tools to support investment by making project financing simpler, more efficient, and more flexible.
The programme has three components:
- InvestEU Fund
- InvestEU Advisory Hub
- InvestEU Portal
According to EIF, the InvestEU Fund is implemented through financial partners who will invest in projects using the EU budget guarantee of €26.2B.
“The entire budgetary guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment,” says EIF.
World Fund: What you need to know
Founded in 2021 by Daria Saharova, Danijel Višević, Craig Douglas, and Tim Schumacher, World Fund invests in startups with the potential to save at least 100M tons of CO2 equivalent per year and tackle the most pressing issue of our time.
The VC identifies potential startups using the Climate Performance Potential (CPP) assessment to gauge their ability to assist in the fund’s goal of reducing emissions.
Through this assessment, the VC has identified and invested in companies like quantum computing firm IQM, spacetech startup Space Forge, and the precision fermentation platform Planet A Foods.
Danijel Višević, co-founder of World Fund, says, “We’re thrilled to have EIF on board as an anchor LP in the fund I, alongside the likes of the UK’s Environment Agency pension fund, PwC Germany and Ecosia. We see this landmark investment – one of the largest EIF has made in a first-time VC fund – as a strong signal that the European Union is serious about tackling the climate crisis. It will help us continue our mission to back the founders that will deliver decarbonisation at scale.”
European Investment Fund: What you need to know
The European Investment Fund (EIF) is part of the European Investment Bank (EIB) Group.
EIF aims to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them access finance.
EIF designs and develops venture and growth capital, guarantees, and microfinance instruments specifically targeting this market segment.
EIF CEO Alain Godard says, “The climate tech VC market in Europe is in its infancy, and World Fund stands out as a fund with a strong track record, network, investment hypothesis, and experience, as well as scientific and commercial expertise within its founding team. These factors, alongside World Fund’s climate performance potential measurement criteria, have convinced us to back their first fund with the European Commission’s support. We look forward to supporting the next generation of high-growth climate startups across the continent.”
Commissioner for the Economy, Paolo Gentiloni, says, “The new InvestEU programme will help European businesses access the funds they need to innovate, grow and create jobs. This agreement is an excellent example of how the programme will help us achieve our green objectives by supporting innovative technology startups. I am pleased to see InvestEU helping European entrepreneurs unlock funds to enable them to achieve their full potential.”