LONDON - Climate-focused venture firm Energy Impact Partners (EIP) has launched its first European fund, raising 390 million euros ($392.03 million) from investors including the Abu Dhabi Investment Authority, its co-managing partner told Reuters.
EIP, which manages around $2.5 billion in assets, said the fund would seek out companies in the region helping drive the transition to a low-carbon economy.
In addition to traditional funding for the start-ups, EIP also offers them a chance to meet and work with a coalition of major industrial companies it has partnered with -- some with an interest in the technologies introduced by the new players.
That coalition of 50-plus companies span some of the heaviest emitting sectors such as energy, transport and agriculture, many of which also backed the new fund, including Fortum, and Galp.
To-date, EIP said the model of connecting strategic investors with start-ups, had resulted in portfolio companies signing over 350 contracts for a combined value of more than $1 billion.
"These incumbents are the ones that own the critical infrastructure, and if we want those to decarbonise, we have to work with them," Co-Managing Partner Nazo Moosa said.
Other companies investing in the European fund include Électricité de France, Shell, EWE AG , Mainova, AGL Energy Ltd, TrønderEnergi AS and Microsoft, through its Climate Innovation Fund.
Other financial investors include Norwegian government-backed Nysnø Climate Investments and Dutch pension fund ABP, through its asset manager APG.
Moosa said the fund will invest between $10 million and $40 million in Series A, B and C funding rounds, and expects to invest the money over the next couple of years in up to 18 firms.
To-date, EIP has invested in a number of European firms including renewable energy supplier Zolar, portable battery provide Instagrid, and environmental, social and governance data provider ESG Book.
Moosa said Europe was leading the world in various aspects of the low-carbon transition, making it a fertile hunting ground for new companies.
Europe aspires to become the first carbon-neutral continent, and regulations are expected to support the goal, creating a likely boost for portfolio companies.
Brandon Middaugh, director of the Microsoft Climate Innovation Fund, said in a statement that it picked EIP as its first fund investment in climate tech as part of the company's efforts to become carbon negative by 2030.
($1 = 0.9948 euros)
(Reporting by Simon Jessop, editing by Deepa Babington)