Sifted - Climate tech’s missing piece

Good morning there,

Sucking carbon dioxide out of the atmosphere, re-freezing the Arctic and microbes that secrete cement: We write about a lot of wild and wonderful climate tech startups in this newsletter. 

But there’s one less sexy sub-sector of climate tech that isn’t seeing as much love: adaptation tech. These are the companies that aren’t trying to solve climate change but are instead trying to help us live with it. And it gets a tiny fraction of VC funding. 

My colleague Freya Pratty and I dig into why that is later today — plus, we scoop a new climate Series A fundraise. 

Elsewhere today, we look at the climate tech soonicorns you should have on your radar, an update on Klarna’s 2023 annual finances and how digital care provider Kry reached profitability. 

Plus…*drumroll please* Sifted Summit is coming back in 2024, and tickets are now live! Join the whole Sifted team, along with 3,000 of the biggest names in startup Europe, on October 2-3 at Magazine, London. Book your super early bird ticket now to get the best price for you and your teams. Can’t wait to see you later this year!

— Anne Sraders, senior reporter

How do you create a values-driven company?

Being a values-driven company is increasingly important to customers — and investors. So how do you build values while staying realistic? We interview speakers from Morgan Stanley’s Inclusive Ventures group, Cult Mia and Automated Architecture to find out.

Why aren’t VCs backing more adaptation tech? 

VCs have ploughed billions of dollars into climate tech innovations to reduce emissions in the atmosphere, but startups helping us live with a rapidly warming climate have received a relative pittance. 

Adaptation tech includes everything from designing tech that make houses and offices more liveable to expanding access to clean drinking water. Startups working on adaptation tech have received just 7.5% of climate tech funding, according to data from the Oxford Climate Tech Initiative.

If we’re all increasingly living with the dangerous impacts of a rapidly warming climate, why aren’t VCs investing more in helping us adapt to it? 

Lena Thiede, partner at VC fund Planet A Ventures, says the problem is that “the communities most immediately and severely affected by climate change typically have limited access to capital and social prestige, representing customer segments that technology companies have not traditionally prioritised”.

Lack of funding isn’t the only hitch. “It requires addressing both persistent risks, such as heat waves during summer, as well as sudden emergencies, like climate-induced disasters,” says Thiede. “For startups, to develop a business model around that can be daunting.” 

But startups are having a go. London-based climate risk data platform Climate X is raising a Series A round, two sources with knowledge of the deal told Sifted. And VCs — even generalist ones like Speedinvest, which has invested in Purpose Green, a Berlin-based startup that focuses on decarbonising energy-related construction and renovation projects — are dipping their toes into adaption tech. Is it a sign of more to come?

We’re curious to hear from you VCs: are you looking to invest in more adaptation tech companies? Which solutions could fit the VC model, and which companies are on your radar? Send us a line. 

— Anne Sraders and Freya Pratty

🩺 Digital care provider Kry has — with the help of GenAI — hit profitability in its three markets: Sweden, France and the UK. It’s now doing 100k patient meetings monthly in France, more than its home market of Sweden.

• Kry, or Livi as it is known in France and the UK, has used GenAI to improve the efficiency of doctor-patient meetings and cut admin time by 30% per consultation. “This quick transition to profitability wouldn’t have been possible without implementing this technology,” the CEO Johannes Schildt says.

💳 No more billion-dollar losses for Swedish payment giant Klarna. In its annual report for 2023, the company says it’s cut its losses by 69%, ending up with ‘only’ losing €290m in the year, as revenues for the buy-now-pay-later rose by 22% to €2.1bn. It also managed to show its first-ever annual gross profit in the US, a market which has long been the focus of the company. 

• The “record year,” as CEO Sebastian Siemiatkowski calls 2023, comes as the company is eyeing a public listing in the US “very soon”. The date is yet to be set but a recent Bloomberg report says it could be as early as this autumn, with Klarna aiming for a $20bn valuation – less than half of its highest private valuation of $46bn in June 2021.  

💸 Spain is going to set up a new official body to accelerate the injection of €20bn into deeptech and audiovisual companies in the country. The Sociedad Estatal para la Transformación Tecnológica, which will be approved by the Spanish Cabinet next Tuesday, will consolidate the management of several tech funds under one roof, in a bid to shorten the time it takes for companies to access investment cash. These include the existing €4bn NextTech fund for deeptech startups, €12bn in EU funds for the semiconductor industry and the €1.7bn Hub Audiovisual fund.

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😬 Earlier this week, news broke that buzzy AI startup Mistral had inked a distribution deal with Microsoft — a potentially huge boost to the French business. But the move also faced a wave of criticism. Mistral, which has always pitched itself as a European champion that would disrupt Big Tech thanks to more transparent open-source technologies, is getting cosy with a member of the “AI oligopoly” to distribute its latest model… which is closed source. But while some condemn what they see as a U-turn, the real question might be: can European champions make it without Big Tech?

🙋‍♀️ What will it take to boost the number of women-led high-growth enterprises in the UK? This report, the outcome of a government taskforce chaired by Starling founder Anne Boden, has some ideas.

🤔 Europe’s climate tech soonicorns

😮 Tumblr and WordPress to Sell Users’ Data to Train AI Tools (404 Media)

Berlin-based Ecoligo, which is a funding platform for solar projects, raised €11m in funding from investors including EIT InnoEnergy, Energy Entrepreneurs Growth Fund and Gaia Impact.

Sheffield, UK-based Sitehop, which develops encryption hardware for telecommunication networks, raised £5m in seed funding. Amadeus Capital Partners and Manta Ray Ventures led the round and were joined by investors including Mercia Ventures and the Northern Powerhouse Investment Fund.

London-based NayaOne, which is a marketplace and platform that connects financial institutions with fintechs and software, raised $4.7m in funding. EFJ Capital led the round and was joined by investors including Valley Ventures and Carthona Capital.

Prague-based Choice, a software platform for restaurants to digitise their business with tools like QR menus, raised $2.5m in seed funding. J&T Ventures led the round and was joined by Reflex Capital and Presto Ventures.

Stuttgart, Germany-based Assemblio, which provides software that helps businesses plan and build fully automatic assistance systems for assembly line production, raised €2.1m in seed funding. LEA Partners led the round and was joined by investors including Mätch VC, Cross Atlantic Angels, Silver Scale and Integra.

Berlin-based Yendou, a clinical trials automation platform for drug developers, raised €1.2m in pre-seed funding. b2venture led the round and was joined by investors including Heartfelt and Infinite Fund.

Tolmezzo, Italy-based Akuis, which makes high-tech gym equipment, raised €1.15m in funding from investors including Wemoove, X-Equity and Azimut Eltif.

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