VC 2150 raises €210 million to solve cities’ climate challenges

If you want to solve climate change, there are few better places to start than in cities.

“The city is like this beautiful vampire squid that’s sucking up all the resources,” said Jacob Bro, co-founder and partner at 2150he told TechCrunch. “They collect basically all the prosperity in the world – 80% of GDP – but also 70% of emissions and all other resources, all the waste and all the disadvantages of the good life.”

Many investors have raised large funds to tackle climate change in recent years, with many measuring success by returns and carbon reductions. 2150 does the same, but to find fertile ground for investment, it starts by looking at problems and opportunities in cities, specifically.

“If we look at all the things we consume, all the things we need to make, for the urban well-being platform to function and thrive, you can identify the technologies and the bottlenecks,” said Bro.

The climate angle helps give the fund an edge, he said. “Sustainability, if done well, is just better business, right? It’s cheaper, faster and more independent of geopolitics.”

This dual focus helped 2150 raise a new second capital of €210 million from a range of institutional investors and family funds, including Chr. Augustinus Fabrikker, Church Pension Group, the Danish sovereign fund EIFO, Fund of Funds Carbon Equity, Novo Holdings, Islandbridge Capital, Security Trading Oy and Viessmann Generations Group. The new fund brings the European firm’s assets under management to €500m.

In all, the new fund has 34 limited partners, said Christian Hernandez, co-founder and partner at 2150. “Pretty big checks,” he added.

So far, 2150 has invested in seven companies from the new fund, including AtmosZerowhich manufactures industrial heat pumps. GetMobilan e-waste recycling startup. Metyclea market for scrap and recyclable metals. and MissionZeroan instant air capture start. Three more have yet to be announced.

In total, 2150 is looking to invest in 20 companies in the second fund. Most of the startups he writes checks to will raise Series A rounds, and the checks will total around 5 to 6 million euros, Hernandez said. Half of the capital will be allocated for subsequent investments.

The partners said they will look to a range of startups, similar to before. In particular, however, they are excited by the opportunities in data centers and automation, both of which have been boosted by the recent rise of artificial intelligence. But for them, AI is more than just an opportunity to invest in energy-related companies.

“The impact there is more social than climate related,” Hernandez said. “Europe is expected to lose 100 million people between now and 2040 — just aging people. The Netherlands already has 50% of its population over 50. What is the role of industrial automation in helping these people be productive, but also in generating GDP and funding these people’s pensions?” he said.

Bro said the focus on industrial applications was perhaps obvious in hindsight. “Cities are all powered by big or small industries at the end of the day,” he said.

The focus seems to be paying off. 2150’s portfolio companies cut a megaton of carbon emissions last year, Hernandez said. “The fact that a small venture capital fund can already reach megaton scale in just four years, that level of impact, along with commercial traction, makes me feel like we’re doing the right thing.”