Climate concerns drive fresh capital into Systemiq

Swiss billionaire and philanthropist André Hoffmann is among the investors in Systemiq Capital's sophomore fund, which is targeting $200m.

Systemiq Capital, a London-based venture firm focused on climate technology, today announced that it raised $70 million on the first close of its second fund, which is targeting $200 million. The sophomore vehicle is expected to close within a year.

Fund II’s investors include Swiss private bank Lombard Odier, The Grantham Foundation for the Protection of the Environment, real estate investment firm Dara Holdings, and Deutsche Post Foundation, along with Swiss billionaire and philanthropist André Hoffmann and Willows Investments founder Stephen Brenninkmeijer.

Systemiq Capital’s debut fund, launched in 2018, has deployed $30 million toward climate tech companies and achieved three exits. Companies from Fund I portfolio are said to have raised $350 million in additional capital.

The recent surge in climate tech investing is different to the cleantech boom of the 2000s, which was skewed toward building infrastructure for solar and wind power, Kelly Belcher, managing director of climate technology and sustainability at Silicon Valley Bank, told Venture Capital Journal in May. Investment returns were hard to find in the aughts because oil and natural gas was cheap, and many investors were not prepared for the longer time horizons required for developing hardware solutions.

Now, climate tech is much more focused on greenhouse gas emissions and carbon reduction, and VC investors are investing in later stages than they did with the older-era cleantech investments. VC investors are also seeing more exits: three key climate tech sectors tracked by SVB had 104 exits in 2021, compared with just 24 in 2017, demonstrating that this time around investors are generating return on investment, Belcher told VCJ in the earlier interview.

VCs invested a record $30.3 billion in 614 climate tech companies last year, nearly double the amount they invested in 515 climate technology companies a year earlier, according to PitchBook. So far this year, venture firms have poured about $11.6 billion into 338 climate tech companies (as of July 13), PitchBook reported.

Systemiq Capital grew out of Systemiq, a B corporation focused on solving social and environmental problems. Systemiq founder Jeremy Oppenheim is an adviser to Systemiq Capital and a member of its investment committee. He was previously a World Bank economist and led McKinsey’s global climate practice.

Systemiq Capital is led by managing partner Irena Spazzapan, formerly a Goldman Sachs commodities executive. She is a member of the firm’s investment committee, along with Oppenheim and Systemiq Capital advisers James Bilefield, chair of companies including, MPB and SThree; and Paul Fletcher, previously senior partner at Actis.

“We are thrilled at the appetite we’ve seen for Fund II,” Spazzapan said in a statement. “This is capital for systems change, and the strong message from our backers is that we’re filling a major gap in the investment landscape, and it is overdue.”

Reporting by Lawrence Aragon and Iris Dorbian. Keith Button contributed to this story