🌍 Newsletter - July 2024

Jul 01, 2024

Welcome to the 8th edition of the AFI Ventures’ newsletter.

As a reminder, AFI Ventures (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

Climate solution Seaweed

Seaweed Value Chain :

Breeding and Hatchery: Producing high-quality starter material (e.g. Hortimare or Pure Ocean Algae).
Production:
- Onshore Farming: Controlled environments like ponds or greenhouses.
- Near-shore Farming: Using nets or lines in shallow waters, common but limited in scalability.
- Offshore Farming: Requires more equipment but allows for larger scale.
- Co-location: Utilizing space around wind farms.
- Wild Harvesting: Cost-effective but unreliable and seasonal.

>> Global seaweed output has tripled from 2000 to 2019, with 97% from aquaculture, mainly in China, Indonesia, and the Philippines, and 3% from wild harvesting, led by Chile, Norway, and Japan.

Seaweed as a climate solution :

Low Resource Requirements: No need for freshwater or fertilizers.
Fast Growth: High photosynthesis rates and rapid growth.
Ecosystem Co-benefits: Habitat creation, nutrient absorption, and water purification.

Emissions Reduction via Valorisation Seaweed has diverse applications, including food, animal feed, bioplastics, and bioenergy, with increasing demand for biostimulants and bio-packaging. Scaling seaweed cultivation involves advancements in technology, genetics, and streamlined permitting. Efficient processing and vertical integration are vital for investment and large-scale production.

Carbon Dioxide Removal (CDR) Seaweed can sequester carbon effectively due to:

Durability: Sinking seaweed into the deep ocean can lock away carbon for centuries (e.g. Seafields, Seaweed Generation and Running Tide).
Scale: The ocean's vast area allows for large-scale cultivation.
Cost: Although current costs are high, they are expected to drop below $100 per tonne by 2030.

However, challenges remain: standardized methods are needed to verify carbon sequestration (e.g., Samudra Oceans), potential risks include methane release and ecological impacts, and regulatory frameworks and international consensus are required for offshore sinking.

European Solar Battery Storage

Market Growth

Europe installed 17.2 GWh of new battery energy storage systems (BESS) in 2023, a 94% increase from 2022. This marks the third consecutive year of doubling the annual market.
By the end of 2023, Europe's total BESS capacity was around 36 GWh.
Residential systems led with 63%, followed by large-scale systems at 21%, and commercial & industrial systems at 9%.

Leading Countries

Germany led the market with 5.9 GWh, a 152% increase, holding 34% of the European market share. Italy installed 3.7 GWh and the UK added 2.7 GWh.

Future Projections and Challenges

Market capacity is projected to grow more than sevenfold to 260 GWh by 2028.
Despite growth, the 200 GW target by 2030 remains ambitious due to challenges such as missing targets, insufficient market signals, double taxation, and restrictive grid policies.

Political and Market Insights

The new Electricity Market Design (EMD) legislation sets a robust energy policy foundation.
Immediate political action is needed to enhance battery storage's role in the green transition.
Decreasing investment costs due to technological advancements, economies of scale, and lower raw material prices have boosted the cost competitiveness of solar PV paired with battery storage.

Additional Insights

In 2023, 1.7M European homes became solar battery-powered.
The residential segment led deployment with 70% of the annually installed BESS capacity.
The appeal of solar and storage solutions may diminish as the immediate incentive for self-sufficiency decreases with the reduced severity of the fossil energy crisis.

🍃 AFI Ventures - Main Highlights

AFI Ventures’ Public Investments in June

VorteX-io 🇫🇷 - (€2.1M / CDC, Maif Impact, Space Founders) SaaS platform providing global river forecast and enabling hydrological applications.
- Investment rationale:
  - Climate change is exacerbating both water scarcity and water related hazards : +0.5°C/decade on river temperature over the past 30 years / 50% world population experiencing water scarcity /+ 5,000 floods in 20 years.
  - Strong barrier to entry thanks to patented camera technology allowing diverse data collection and high accuracy.
  - Led by a stellar team ⭐ (Guillaume and Jean-Christophe) bringing expertise in spacial technology and already working with major companies (EDF, SNCF, Gallagher, etc.).
Nova Carbon 🇫🇷 - (€1.5M / UI Invest, NACO, Xplore (Epopée), Bleu Capital, Kima Ventures, & BAs) offers high-performance sustainable carbon fiber composites by developing a range of semi-finished products made from carbon fiber waste.
- Investment rationale:
  - Proprietary and disruptive tech (spin-off from  Manifica) allowing recycled high performance carbon fiber composites thanks to long fiber realignment.
  - Strong impact : Between 5x and 80x less CO2 emissions than virgin fiber, depending on the source recovered.
  - Highly legitimate team (🤘Hugo and Vincent) and early traction - PoCs with Epsilon Composite,  Forvia  (Faurecia group), Decathlon.
Entroview 🇫🇷 - (€1.5M / Rethink Ventures, Exergon, Kima Ventures, Wind Capital, Holnest) offers a battery health diagnosis solution.
- Investment rationale:
  - The algorithm developed by Entroview uses a patented method to measure battery entropy in real time (i.e. the organization of particles/atoms (ions) in the battery cell) enabling precise measurement of the battery's state of charge (SOC) and health (SOH).
  - Highly complementary founding team (🤝 Gaëtan and Sohaïb) with expert advisors (e.g. founders of eFounders, Dataiku, Unikbase, Stupeflix).

💰 Early-stage impact rounds in France

Movivolt (€10M / Banque des Territoires, Véhiposte) offers long-term rental of electric vehicles for professionals.
Biophta (€6.5M / UI Investissement, GO Capital, Elaia, & others) pioneers eye care with a platform for continuous drug delivery.
Caats (€5M / Otium Capital) high-nutrition cat food, grain-free, rich in high-quality proteins, and entirely made in France.
Gaya (€5M / ViaID, Karmen) offers an electric bike for solo, duo or family riding.
Hipli (€5M / Crédit Mutuel, BPI France, l’Ademe, Citeo, & others) is a reusable, eco-friendly packaging solution that offers a sustainable alternative to plastic.
Kelvin (€5M / Racine2, Seedcamp, Raise Capital, Kima Ventures, Motier Ventures) is an energy management and electrification platform for radiator-heated buildings.
Vizcab (€4.5M / KOMPAS VC, Global Brain Corporation, Brick & Mortar Ventures) redefines and simplifies building Life Cycle Assessment (LCA) for everyone.
Deemea (€4M / Karista, YZR Capital) is re-imaging biomedical research.
Optee (€4M / Blast Club, & BAs) platform for structuring and managing energy projects.
Decade Energy (€3.6M / Ananda Impact Ventures, Contrarian Ventures) is a logistics electrification and smart energy solution provider.
Sopht (€3.3M / Ternel, Axeleo Capital, Ring Capital, Evolem Start, & others) offers a GreenOps platform to decarbonize IT.
Quantiq (€2.6M / BPI, BAs) is an AI video-based health monitoring solution that transforms any webcam or smartphone into a medical device.
Midepile (€2M / Team for the Planet, WeLike, Chaudronnerie Lespinasse, BAs Arts & Métiers) is a B2B subscription-based turnkey service for logistics professionals.
Viti-Tunnel® (€2M / Demeter) offers an automated, single-row technical device that deploys a transparent, waterproof film during rainy episodes.
NectarGo (€1.8M / Evolem, 50 Partners et High Flyers Capital, & BAs) is a platform that connects local traders and producers.
Feelbat (€1.5M / Apicap) provides a professional instrumentation tool for monitoring structures, featuring connected sensors for simplified management.
Inside Tx (€1.3M / Newfund Heka and NAEH, Skalepark, & BAs) develops an end-to-end nanoparticle synthesis platform that accelerates screening to production.
StarkAge Therapeutics (€1.2M / BPI France, BAs) is a biotechnology company that aims to delay and improve quality of life of patients with age-related diseases.
Optikan (€830K / Techno’Start, Synergence Invest, BPI France, BAs Arts & Métiers) offers new generation of non-destructive testing equipment for industry.
Novaborne (€500K / Bestophe Invest) offers professional solutions for the installation of your charging stations.
Major (€400K / NC) develops mobile applications and solutions for senior residents to support them in their daily lives.
Ecodrop (NC / Amundi) is a construction site waste management solution.

🤝 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. 🍃

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