🌍 Newsletter - February 2024
Welcome to the 3rd 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 and social 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 a summary of 2 articles on the impact ecosystem that have caught our attention, fundraisings realised by impact start-ups in France, and news from our portfolio. 💚
👀 What Caught our eye
2024 Climate Tech Oracle
by CTVC
Will climate tech venture / growth funding increase? ($)
While there is a consensus among the experts that funding will increase, there are differing opinions on the extent of this growth. Some experts believe that funding levels may not reach the heights seen in 2022 but will still show an upward trajectory, driven by the urgency and commitment of funders. Others express caution, citing the cautiousness of investors and the current market sentiment as potential factors that could limit funding growth.
Will there be more flat or down rounds in climate tech compared to 2023?
Experts anticipate more flat or down rounds in 2024 compared to the previous year, with many companies needing bridge rounds to stabilize their runway or adjust valuations to attract new capital in a more challenging environment. However, it is noted that there may also be a counterbalance, with certain companies that have achieved significant milestones being able to raise funds at an uptick.
Will oil & gas companies be the largest acquirers of climate tech start-ups in 2024? (# of acquisitions)
While some believe that these companies will continue to be active acquirers, driven by their deep pockets and interest in areas adjacent to their core businesses, others express optimism that other players, such as tech and corporate entities, will become more active acquirers in the coming year.
Will there be an announcement of a direct air capture (DAC) facility selling carbon removal for under $600 a ton?
While some experts express skepticism about the possibility of a DAC facility selling carbon removal for under $600 a ton, others believe that it is achievable, highlighting the potential for increased scale and improved cost structures.
Will EV sales reach 25% of global new car purchases in 2024?
The conversation also touches on the growth of electric vehicle (EV) sales, with predictions ranging from reaching 25% of global new car purchases to falling short of this target. Factors such as infrastructure, affordability, and supply of EV models outside of China are cited as potential influencers of EV sales growth.
Will a new geologic hydrogen site begin commercial production this year?
There is also discussion around the possibility of a new geologic hydrogen site beginning commercial production in 2024. While some believe that this is on the horizon, others express doubts about the viability of geological hydrogen and raise concerns about it being used as a means to greenwash natural gas production.
Will we see the first flight using 100% e-SAFs?
Lastly, the experts contemplate the possibility of the first flight using 100% e-SAFs (electrofuels). Opinions vary, with some expressing skepticism due to slow market progress and structural inefficiencies, while others mention the potential for expensive PR stunts.
Biodiversity Credits Gain Traction But Questions Persist
Market Growth and Initiators:
The international biodiversity credit market is gaining traction, with France and the UK leading the way. The Kunming-Montreal Global Biodiversity Framework is a key driver, and the market is estimated to reach $69 billion by 2050.
Regulatory Landscape:
England and other countries have introduced rules requiring companies to compensate for environmental harm. An unregulated international market is emerging, allowing companies to source biodiversity units globally.
Comparison with Carbon Offsets:
Similar to carbon offsets, biodiversity credits face scrutiny for greenwashing and lack of clear definitions. Critics point out potential flaws and risks, emphasizing the need for regulatory frameworks. Proponents emphasize a distinction between using biodiversity credits to offset harm and to finance positive environmental projects. There's a narrative that offsets can achieve net-zero, while credits contribute to a net-positive impact. The lack of clear definitions and regulations poses a significant challenge to the credibility of biodiversity credits. Experts argue that the market is not yet ready for a trading system without regulatory clarity.
Potential Flaws and Risks:
Concerns about exploitation, confusion, and unsubstantiated claims echo challenges faced by carbon offsets. The article emphasizes the need for regulatory frameworks to define and oversee biodiversity credits.
Sustainable Finance Developments:
Litigation finance is growing in Europe, driven by new laws addressing ESG compliance. EU legislation allowing class-action lawsuits for environmental violations may expose firms to legal risks. Global banks are making more money from green projects than fossil fuel activities.
The biodiversity credit market is expanding globally, but challenges include concerns about greenwashing, lack of regulatory clarity, and potential flaws. Proponents emphasize the need for clear definitions and regulations to ensure the credibility of biodiversity credits, drawing parallels to challenges faced by carbon offsets. Additionally, developments in sustainable finance, including litigation finance and scrutiny of green-finance claims by banks, highlight the evolving landscape of environmental finance.
🍃 AFI Ventures - Main Highlights
Recent News from our portfolio
Apryl set a partnership with Stella for menopause - link
Kompozite reinforced its partnership with SAMSE (a major actor in the distribution of building materials in France) - link
MORFO was one of the 12 winners of the Trillion Trees: Restoration at Scale Challenge (UpLink - World Economic Forum) - link
Resortecs joined The European Technology Platform for the Future of Textiles and Clothing - link
Spotlight joined the CoqVert community launched by Bpifrance in partnership with l'ADEME and the Ministry of Ecological Transition - link
💰 Early-stage impact rounds in France (up to €15M)
Okomera (€10.2M / Resonance, Polytechnique Ventures, Bpifrance) Accelerates access to improved, precision-based cancer therapies.
Spore.Bio (€8M / Local Globe, BAs) Develops innovative technological tools to help factories manufacture safe products.
Auum (€7.4M / MAIF Impact, Starquest Capital, Founders Future, Foodles) A machine that washes, disinfects, and dries glasses to replace plastic cups.
H2Gremm (€7M / Unexo, Box Invest) Provides a low-carbon energy autonomy solution.
Bcv (€6M / NC) Develops a Class III medical device to optimize minimally invasive endovascular procedures.
Tri'n'Collect (€5M / Colam Impact, Bpifrance, Banque des Territoires) Provides a customized service for sorting, collecting, and recycling building trash.
Carthera (€4.5M / Supernova Invest, EIC, Unorthodox Ventures) Designs and develops innovative therapeutic ultrasound-based medical devices for treating brain disorders.
Susu (€4.5M / Plug and Play, Launch Africa, Five35 Ventures) Makes healthcare affordable and accessible for Africans.
Scienta Lab (€4M / CentraleSupélec Venture, BAs) An AI-powered platform pioneering Precision Immunology.
Carbon Maps (€3M / Daphni, Breega, Samaipata) The first climate management platform for the food industry.
I-VIRTUAL (€3M / Elaia, Malakoff Humanis, UI Investissement) Develops software that allows physiological and emotional values to be measured using the camera of a smartphone or computer.
Cyclair (€2.1M / Crédit Agricole, Business Angels des Grandes Ecoles) Develops technical solutions that keep crop protection and yields intact while reducing the requirement for chemical inputs.
Inalve (€2M / KREAXI, Angelor) Produces fresh micro algae for various fields, such as animal nutrition and health, cosmetics, and nutraceutics.
Velco (€2M / NC) Accompanies professionals with its connectivity solutions for a safer and more reliable urban mobility.
Kleep (€1.8M / BAs) Develops a software that analyzes customers' body shapes and recommends the right size for products.
Dionymer (€1.5M / AFI Ventures, AQUITI Gestion, IRDI SORIDEC Gestion) Creates a method that uses microorganisms to convert industrial organic waste into biodegradable polyhydroxyalkanoates.
HUVY™ (€1.1M / Bpifrance Digital Venture, Région Nouvelle-Aquitaine) Helps detect skin cancers using AI.
EyeGauge (€535K / BAs) Brings digital innovation to Maritime Transportation, Mining and Energy sector and Facility Management.
Remixt (€420K / NC) Prevents critical churn, legal, and reputation risks generated by the lack of Diversity, Equity & inclusion.
BioAZ (NC / BAs) Developing breakthrough innovations for animal welfare and more sustainable breeding.
🤝 Our Team
Charles Fourault - Partner - charles@afi.ventures
Mamadou Dembele - Senior Associate - mamadou@afi.ventures
Constantin de Chaudenay - Associate - constantin@afi.ventures
Kim Godson - Analyst - kim@afi.ventures
Don't hesitate to reach out if you're an impact entrepreneur or just interested in any of these topics. 🍃