Adaptation tech might save your morning brew

Good morning there,

I’ve recently returned from the Lausanne-based conference HackSummit — the yearly gathering of who’s who in climate tech. If you missed it last week, the chat at the speaker’s dinner on night one was all about how millennials are pushing family offices into climate tech. But once the conference started, there were two things that kept coming up: adaptation tech and the surprisingly good ‘coffee’. I dig into both with climate tech reporter Freya Pratty below.

Elsewhere today:

• The €1bn Nato Innovation Fund announces its first startup and VC fund investments
• Sifted Scout: 20 digital lending startups to watch
• ElevenLabs angel investor launches AI startup to transform SaaS sales

— Sadia Nowshin, reporter

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Adaptation tech might save your morning brew

Often, the free coffee at conferences leaves a lot to be desired. But last week at Lausanne-based climate tech conference HackSummit — an annual gathering of the world’s climate and foodtech founders, investors and enthusiasts — it hit the spot, with a catch: it wasn’t ‘real’ coffee. 

The caffeine was provided by Netherlands-based Northern Wonder, a startup that uses non-tropical ingredients like barley and chickpeas to make coffee grounds and pods that taste like and give you the buzz of the real thing, but without the coffee bean. 

While I (Sadia) was queuing for a latte its founder, David Klingen, told me how the increase in demand for coffee worldwide (traditionally tea-drinking nations like India are warming to it, for example) means that more rainforests are being cut down to make way for new coffee plantations needed to meet demand. At the same time, some of the world’s largest coffee producers are experiencing hotter and drier weather which is hurting the ability of their crops to produce, meaning less coffee is making it to market and the price is going up.

Northern Wonder’s product is part of an emerging category within climate tech known as adaptation tech. It includes solutions that help us to deal with the effects of climate change, rather than trying to prevent it (which is known as mitigation tech).

The category includes things like drought-resistant crops, tech to make housing more liveable as temperatures rise and watertech solutions to expand access to clean drinking water in areas where there are shortages. 

A lot of VCs are keen to wax lyrical about the moral imperative of backing adaptation tech — but few have opened their wallets. A report last week suggested that 17x more funding is needed for adaptation solutions — that’s $1.1tn more compared to the $63bn invested in 2021.

One area of adaptation that VCs do seem comfortable with is the software piece. Startups are working on tools to help investors and companies quantify the risk climate change poses to their portfolios and supply chains, and offering insurance products related to that risk. Examples include London-based Climate X, which is raising its Series A round. 

Though significant investment is missing, it was promising to see Swiss investment bank UBS, which has more than €3.1tn in assets under management (AUM), talking about adaptation in Lausanne. Sebastian van Winkel, who works for its impact team, spoke about his clients' interest in adaptation solutions; punters seemed buoyed on by UBS’s interest in the sector.

Read more on adaptation tech here and sign up to Sifted’s climate tech newsletter, where we follow the category in depth.

— Sadia Nowshin, reporter & Freya Pratty, senior reporter

💰 The €1bn NATO Innovation Fund announced the first startup and VC recipients of its funding. The fund, which focuses on deeptech and defence investments, has made wide-ranging bets on companies like Space Forge, a Welsh startup using the environment in space to manufacture materials for things like semiconductors, and ARX Robotics, which is developing scalable unmanned robotic systems for defence and commercial applications. Read the full list here.

🌱 Plant-based meat alternatives startup THIS has raised a £20m Series C, which it says it’ll use to grow its product range in the UK. The capital came from impact investor Planet First Ventures and was a mix of primary and secondary equity financing. 

• Yesterday, the company became the third food manufacturer to recall a product from retailer shelves in connection to a rise in E.coli cases in the UK. The UK’s Food Standards Agency (FSA) said it was a "precautionary step" and E.coli "has not been detected in the product", the BBC reported.

🇵🇱 Polish angel investor Bartek Pucek — who’s an early backer of startups like ElevenLabs, Ramp and Alokai (formerly Vue Storefront) — has cofounded a new startup, Proofs, to take on one of the biggest sales pain points facing API-first companies like Salesforce, SAP and Stripe. 

• According to Pucek, the company's AI agents can reduce the time to build proof-of-concept apps from months to minutes. It’s just raised a $2.6m pre-seed round led by German VC Earlybird’s Digital East Fund, which was an early backer of Romanian software giant UiPath.

🤝 Munich-based reconnaissance drones manufacturer Quantum Systems announced a 36-month contract with the Romanian Ministry of Defence (MoD) worth €18.4m, which will see the startup supply the MoD with its ‘Vector’ unmanned aerial systems (UAS). 

• Quantum Systems’s Vector UAS’ are vertical take-off and landing drones that have a flight time of up to three hours. They are equipped with an optical and infrared camera, enabling day and night reconnaissance in all climates and in challenging environmental conditions, the company says.  

💸 Paris-based AI startup Preligens, which provides analytics tools for satellite imagery, is set to be acquired by French aerospace and defence multinational Safran for €220m after several months looking for a buyer, according to business publication La Tribune. The startup, which raised €23m from French public bank Bpifrance and investors 360 Capital and Tikehau Capital, has secured contracts with the French, US and UK ministries of defence, as well as NATO. Preligens declined to confirm.

👩‍💻 Sifted Scout: 20 digital lending startups to watch.

⚡️ How the next government can super-charge the UK technology sector.

💪 Why startups are scaling up with Shell Ventures. (Sponsored by Shell Ventures)

📣 Readers, we want to hear from you. What’s the best thing on European tech you’ve read recently? Drop us a line.

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London-based Finbourne, a data management platform for asset managers, raised £55m in Series B funding. Highland Europe and AVP led the round.

Madrid-based Tinybird, a real-time data analytics platform for data and engineering teams, raised $30m in Series B funding. Balderton Capital led the round and was joined by investors including CRV and Singular Ventures.

Madrid-based IENAI Space, which is developing electric propulsion systems and mission analysis for nano-satellites, raised €3.9m in funding. GED Conexo led the round and was joined by investors including Inveready, WA4STEAM, DPM and CDTI.

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