The Impact - The emerging European a16z

Extantia invests in deep decarbonization technologies that will lead us to a world beyond fossil fuels. They are actively searching for companies that have the potential of becoming Gigacorns. These are companies that are ultimately capable of saving in excess of 1 gigatonne (1 billion tonnes) of CO2e emissions per year and are also commercially viable with scalable business models.

The first gateway for every incoming deal is to assess and forecast the CO2e savings of the technology over time. If it has the potential of reducing at least 100 million tonnes of CO2e a year, either through direct impact or indirectly, then they move forward with the deal review.

Fund Snapshot
Stage: Pre-Seed – Series B
Check Size: $500K – 2M
Geography: 80% Europe, 20% Global
Lead/Follow: Both

About the Fund
Why was the fund created?
We have seen a funding paradox where 80% of the VC money went into companies that can solve only 20% of the CO2 emissions problem. Extantia wanted to found a climate-first tech-agnostic fund, which focuses first and foremost on the big piece of the climate puzzle.

From experiencing the need for early capital firsthand, the Extantia founders have been investing in climate for the last decade. Extantia’s founders saw a need and opportunity to provide investment support for technology innovation in Europe. As a result, Extantia was started as an avant-garde to mobilize private capital to put climate first and create an impact for generations to come.

What is Extantia’s core belief?
Climate is the biggest challenge of our generation and entails a lot of risks. Yet, it is also one of the biggest opportunities in business history and probably 100x bigger than the internet revolution. Getting to Net Zero by 2050 will require trillions of investments, partially in technologies that we still don’t have. This is where startups and VCs have a major role to play.

Extantia believes that the world needs more solutions to tackle climate change. They are focused on supporting technologies to help the world achieve net zero by 2050.

What domains in climate tech does Extantia have the greatest expertise in?
Extantia’s experience and investments are across the climate stack, yet three categories are mainly in focus. The first is energy, as this represents more than 70% of the challenges we face – electricity, heat, and fuel. The second is industrial processes and advanced materials. And last, advancing carbon sinks, such as direct carbon capture.

What type of portfolio support does Extantia provide?
Extantia differentiates itself as a fund by analyzing carbon impact and assisting with capital structure. Analyzing carbon means helping startups understand, communicate, and position impact. On the capital structure side, Extantia realizes that startups should use equity financing for certain aspects of a business, and non-dilutive funding for others. Extantia can help ensure equity financing is spent on the right activities and introduce startups to non-dilutive capital providers. Many of their companies have a 1:1 ratio (equity to non-dilutive raised).

The other areas Extantia supports startups are with:
Fundraising
Go-to-market strategy
Marketing and positioning

About Investments
How can a startup get investment from Extantia?
Extantia invests in companies that develop technologies that at scale have the potential to abate or remove more than 100Mt of CO2 from our atmosphere per year in a commercially viable way. To assess this, Extantia uses the EPIC methodology (Extantia Projected Impact Calculation) which combines the best practices of Life Cycle Assessment with forward-looking analysis.

What is Extantia’s investment process and timeline?
Extantia can negotiate a term sheet in as little as 4 weeks but usually they want to take the time (at least 3 months) to get to know the team What it takes to get them there is a lot of carbon math, with the focus on answering the question: "Will this change the world by 2050?" Carbon math, according to the EPIC methodology, happens in 3 stages. Their first go/no-go decision is based on if a startup can reduce greenhouse gases by at least 100Mt or more CO2e per year by 2050. If the startup can, Extantia will then be more rigorous and figure out the actual and potential impact a startup can have by 2050. At this point, Extantia will also run due diligence on other pieces of the business – technology, scalability, USP/competition, team, business model, demand/traction, risk profile, and so on. When Extantia is finalizing a term sheet, they look at the impact a startup can have within the next 5 years. This last piece sets milestones for the startup and Extantia employees’ compensation.

What would make Extantia consider deviating from their typical criteria?
The most important consideration for Extantia is a startup’s carbon impact. Other than that, Extantia is open to investing in startups outside of their typical geography, stage, and check size based on the opportunity.

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The Impact - The emerging European a16z

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