🌍 Newsletter - December 2023

Dec 01, 2023

Hi everyone,

Welcome to the 1st edition of the AFI Ventures’ newsletter.

As a reminder, AFI Ventures (a fund managed by Ventech) is an impact VC fund that invests in pre-seed/seed startups with a strong environmental ambition & producing a systemic change. We invest once a month in France & Europe tickets ranging from €250k to €500k.

Each month in this newsletter, you'll find fundraisings realised by impact start-ups in France, a summary of 2 articles on the impact ecosystem that have caught our attention, and news from our portfolio 💚

👀What Caught our eye

Main Points from PwC's State of Climate Tech 2023 Report

Global Equity Investment Decline:

Equity investment in climate tech start-ups has declined for a second year amid challenging private market conditions.
Total venture and private equity investment dropped 50.2% YoY, reaching $638 billion in 2023.

Positive Trends in Climate Tech Funding:

Climate tech's share of private market equity and grant investment rose to 11.4% in Q3 2023, with an annual growth rate of 10%.
First-time funders are actively joining deals, and there's a shift toward sectors with higher emissions and greater emissions-reduction potential.

Investment Rebalancing:

Notable positive changes in funding allocation occurred in industrials, accounting for 34% of emissions, with a rise from 8% to 14% in funding.

Funding trends show increasing alignment with technologies' emissions reduction potential (ERP)
Shift towards higher-ERP technologies like carbon capture, green hydrogen, and alternative foods.

Need for More Investment in Hard-to-Abate Sectors:

To meet climate targets, more investment is needed in hard-to-abate sectors like industrials and power.
Challenge lies not only in innovation funding but also in capital for technology deployment, typically from banks and governments.

Challenges in Early-Stage Dealmaking:

Early-stage dealmaking has slowed, potentially impacting the supply of viable climate tech solutions.
Investors cite investor judgment and reluctance of start-up founders to raise funds in a weakened market as reasons.
There's a steady influx of first-time investors in climate tech.
Focus on fundamentals, not just policy-driven buzz, in evaluating climate tech start-ups.
Venture funding alone is insufficient; exploring all possible sources of capital, including government programs, is crucial.

Need for Massive Capital Deployment:

The fight against climate change requires massive capital deployment, not just in venture capital but also in growth capital for rapid expansion.
Shifts in policy, standards, and greater cooperation are crucial for significant impact.

Deep dive on water - Le Plongeoir

We wanted to highlight Guillaume Fourdinier relatively new newsletter Le Plongeoir. For the occasion we summarized the latest edition focusing on the water emergency and the arising solutions.

Global water consumption tripled in 50 years; 2030 estimates show severe stress for half the population. Earth has 2.8% freshwater; 1% is accessible.

Population Growth and Agriculture:

Rapidly growing nations use 10-20 times less water than developed countries.
Agriculture contributes significantly to water consumption.
Global warming affects precipitation patterns, leading to droughts and floods.
2.1 billion lack access to clean water; climate-related water crises contribute to disasters.

Future Water Challenges:

Anticipated water shortages may lead to climate refugees.
Urgent need for infrastructure like massive pipelines to transport water to areas in need.

Understanding Water Consumption and Infrastructure in France:

France consumes 4.1 billion cubic meters annually. 90% used for hygiene, less than 1% for drinking.
Agriculture is the largest consumer (58%), followed by drinking water supply (26%), industrial use (4%), and power plant cooling (12%).
Extensive water distribution networks in France with 20% leakage.
Water costs €0.003 per liter in France.
Economic incentives alone may not drive significant changes, unlike energy.

Challenges with Mega Reservoirs, Meat production and industrial water use

Mega reservoirs face controversies due to environmental impact and altering water flow.
Meat production, especially beef, contributes significantly to water consumption.Shifting dietary habits, reducing meat consumption can alleviate water pressure.
Only 4% of water is used by industries, but over half of water consumption is imported.

Innovations and Solutions:

Various technological solutions and innovations are being explored to address water challenges globally.
Examples include micro water purification stations, data-driven water level monitoring, advanced irrigation technologies, and decentralized water treatment systems.
New technologies explore renewable energy sources for desalination, reducing environmental impact.
Startups are developing technologies to extract potable water from the air.
Some countries successfully implement wastewater reuse for irrigation and other purposes.

Global Initiatives:

Global initiatives aim to increase access to clean water.
Efforts include water purification technologies, data-driven water management, and sustainable agricultural practices.

🍃AFI Ventures - Main Highlights

AFI Ventures’ Public Investments in 2023

Dionymer 🇫🇷 - Low-carbon alternatives to replace petrochemical plastics (PHA)
- Investment rationale:
  - Investing in a patended technology developed by a complimentary team of specialists cracking a massive and growing biopolymer market
  - Clear ROI for bio waste producers which secures the supply and is an independent business unit
Finres 🇫🇷 (€4,1M / Speedinvest, Kima Ventures, Illuminate Ventures) - The future of resilient agricultural investments
- Investment rationale:
  - Investing in a fintech solution helping banks & farmers to prioritize resilient agricultural investments and practices under climate change
Spotlight 🇫🇷 (€6,1M / Emerald, Industrya) - CO2 storage surveillance solution
- Investment rationale:
  - Unlocking more supply in a voluntary carbon credit market shortage through a more agile and efficient certification process using satellite imagery technology
  - Ability to address the long tail of small scale reforestation projects
Resortecs 🇧🇪 (€2,2M / Finance&Invest.Brussels, ScaleFund) - Innovative threads and disassembly for truly circular fashion
- Investment rationale:
  - Investing in a promising technology producing and enabling high-quality textile recycling on an industrial scale thanks to automatic garment disassembly
  - Growing awareness of and demand for sustainability in the fashion industry
  - Legal changes in the EU starting 2024: Extended producer responsibility (EPR), the ban of unsold inventory destruction, etc.
Tilt 🇫🇷 - Energy management and demand response services for utilities and buildings
- Investment rationale:
  - Increasing volume of DER and IOT
  - Increasing electricity price and people awareness
  - Regulatory changes and incentives in favor of renewable and flexibility
Sirona 🇧🇪 (€1M / XAnge, Angels) - Direct Air Capture (DAC) technology
- Investment rationale:
  - Investing in a well-known DAC technology to capture CO2 from the atmosphere led by an execution-driven founding team
  - Rising demand for CDR offsets steadily increasing offset prices and increasing interest in DAC for CDR compared to other carbon removal options
Optimiz Construction 🇫🇷 (€1,5M / Sista Fund, Kima Ventures, Angels) - Minimize wastes on construction sites and make savings optimizing raw materials' orders
- Investment rationale:
  - Investing in a unique solution that can be implemented on any type of standard construction material, having a high impact on the highly polluting construction sector
  - Relying on an inspiring entrepreneur with a strong execution

💰 Early-stage impact rounds in France (€0M to €15M)

Maestro (200K€ / Plug&Play, Hatcher+) The all-in-one solution for your energy renovation projects
Auxo Dynamics (900K€ / Hub612, Angels) Helps companies steer their sustainable transition through data and AI
Sorewards (1M€ / Angels) Innovative gift card as digital and international reward for your incentive programs
Stēto (1,2M€ / BPI) Powered medication for diabetes
Kikleo (1,5M€ / Good Only Ventures, BPI) Reducing food waste in the restaurant industry.
WIND my ROOF (2M€ / Groupe Idec, EIT InnoEnergy) Developing hybrid wind-solar modules
AquaTech Innovation (2M€ / Sud Mer Invest, Sofilaro, Calao Finance) Collect, purify, recycle, regenerate to conserve our water resource
Callyope (2,2M€ / 360 Capital, No Label Ventures) Monitoring brain health through speech
Youzd (2,4M€ / Angels) 2nd hand furniture and home appliances marketplace
Osium AI (YC S23) (2,4M€ / Kima, Singular, Atomico, Sequoia Scout) Speed up materials and chemicals innovation with Artificial Intelligence
Diamidex (2,5M€ / PureTerra, BPI, SATT Sud-Est) Detection and quantification of microorganisms of interest
CarbonFarm (€2.5M / Serena, Climate Capital) : Providing transparency to incentivize sustainable practices in agriculture
Ida (2,7M€ / Frst, Daphni, Motier Ventures, Kima) Eradicate food waste from distribution
Nūmi (ex-MUMilk) (3M€ / Heartcore, Financière St James, Kima, HCVC) Redefine infant health through groundbreaking research
Beev (3M€ / Founders Future, Karista) Car fleet electrification
Ensol (3M€ / Otium Capital) Installation and management of PV pannels for individuals
OncoVITA (3,5M€ / NA) Develops vaccines for oncology
Circle Sportswear (4M€ / Alter Equity) Circular and Responsible French Sport Brand
Stockoss (4M€ / PiLabs, Kima, 50 Partners) Reinventing logistics with innovative solutions
Vizcab (5M€ / A/O PropTech, Altur Invest, Cemex) Designed to help you face the low-carbon challenges ahead
Arkeon Energy Systems (5,5M€ / Team for the Planet, Crédit Agricole) Emission free Energy solutions
Biosency (7M€ / Go Capital) Remote monitoring and prevention for respiratory insufficiency.
Goodvest (10M€ / Ring Capital) Offers responsible savings focused on ethic and transparency.
Le Fourgon (10M€ / Teampact, Id4, La Poste Ventures) Offers milk, water, beer, wine, fruit juice, and sodas.
Hello Watt (12M€ / Starquest, BNP Paribas Solar Impulse Ventures) Helps you reduce your energy bills
Gen-hy (NA) High-efficiency system that covers the entire hydrogen value chain

🤝Our Team

Charles Fourault - Partner - charles@afi.ventures
Mamadou Dembele - Senior Associate - mamadou@afi.ventures
Constantin de Chaudenay - Analyst - constantin@afi.ventures

Don't hesitate to reach out if you if you're an impact entrepreneur or just interested in any of these topics 🍃

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