E.ON’s venture capital platform, Future Energy Ventures, has established a new, independent Luxembourg-domiciled venture capital fund, Future Energy Ventures GmbH (FEV).
E.On has established a new energy tech fund separate from its ownership. The team are coming from E.ON’s New Energy Ventures.
The new fund is expected to unlock capital raising with more investors and is in alignment with the EU’s SFDR.
The fund is targeted at helping create the new decentralised smart energy system with digital technology as a key enabler.
Independence from the utility giant has enabled the granting of a license from the financial regulator in Germany, BaFin, that gives the fund more freedom to pursue partnerships and investments. It also fulfils the key pre-requisite for FEV to act as an advisor on the management of the Fund.
E.ON will anchor the fund but looks to leverage capital
E.ON will be an anchor investor. The fund will have a total target size of $250 million and is expected to hold its first close in 2023. It has three core investment themes within the energy sector: future energy, future cities, and future technologies. 100% of its capital is intended for sustainable investments, in accordance with Article 9 of the SFDR regulation.
The Fund will focus primarily on Series A and B investments in digital and scalable business models that “aim to transform the traditional energy value chain towards net zero.” Series A and B investments are the first rounds of funding that scale up a business after initial investment.
Fund has a good record for scale up investments
The team moving from E.ON’s Future Energy Ventures platform has a strong track record, including the recent $60 million Series C funding round by Buildots – a construction tech start-up with an addressable market of $1.3 trillion in the U.S. alone.
The vision of Future Energy Ventures, shared by the new fund, is that new players will disrupt traditional energy supply chains and that everything will be interconnected with smart interplays. “Electric cars are not just vehicles, they are also mobile batteries; buildings can also be energy generators; homes and businesses can be smart and connected, regulating the energy they use and when.”
Furthermore, AI and blockchain will have key roles to play in these smart hubs.
“With $30 billion of VC investments into climate tech companies in 2021 and 70% of the global economy committed to achieving net-zero, climate tech has become a primary investment strategy – and rightly so if we are to make any progress towards net-zero carbon emissions by 2050,” said Jan Lozek, Founder and Managing Partner of FEV.