Sifted - Is 'climate tech' dead?

Good morning there,

Across the last few weeks, I’ve seen a lot of ‘RIP climate tech’ posts from investors on social media. It’s a debate which started in November, when American investor Tommy Leep declared that the current era of ‘climate tech’ started in 2019 and ended this year. 

Investors argue that the term has allowed companies to get away with being commercially unviable, just because they’re green. 

Should a name change happen? It wouldn’t be the industry’s first rebrand. 

Between 2006 and 2013, the ecosystem used the term ‘cleantech’, leading to the period being dubbed the 'cleantech bubble': an era where VCs invested in a host of climate technologies, most of which then failed.  

So, is the second wave of sustainability over? And, if so, what names do investors propose for the third phase? I chatted to some to find out.

All that said, in today's newsletter, we’ve got quite a bit of positive climate tech news — perhaps suggesting the naysayers have crowded in too early.

Munich’s Vaeridion raised €14m to build its electric plane, and Danish startup Hyme revealed plans to build the world’s largest thermal energy storage system. Scroll on for more.

Elsewhere today:

• The fastest growing startup teams by headcount in 2024
• All the new, first-time European VC funds of 2024

— Freya Pratty, senior reporter

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🇩🇪 Munich-based Vaeridion, which is building an electric plane, has raised a €14m Series A led by World Fund and is aiming to deliver its first plane by 2030. It's an interesting time for an electric aircraft company to raise — the giants in the sector, Lilium and Volocopter, have both had a tricky year.

🧂Three years after cracking cheap solar storage using molten salt, Danish startup Hyme Energy plans to create the world’s largest thermal energy storage system together with dairy producer Arla. 

• The proposed system, with a capacity of 200MWh, will convert renewable electricity — from sources such as wind and solar — into heat, which can be used on demand to replace fossil fuels at Arla's production plant, enabling up to a 100% reduction in CO2 emissions from process heat.
• “The project will show that reducing CO2 emissions in large-scale industries is not only feasible but also economically attractive,” says Nis Benn, Hyme’s chief commercial officer. Hyme and Arla are now jointly seeking EU support of around €20m-30m, and when funding is secured plan to have the system up and running by 2029. 

🇫🇮 Finnish smart ring maker Oura has raised a fresh $125m to top up its Series D round. It brings the round total to $200m following a $75m raise in November led by US continuous glucose monitoring (CGM) giant Dexcom. 

• The new injection of capital features US investor Fidelity Management & Research Company and sees Oura’s valuation stay at $5.2bn — the figure it hit a month ago.

🧑‍⚖️ Sam Altman’s World (formerly Worldcoin) is set to appeal a decision for “corrective measures” set out by European regulators. According to a ruling issued by the Bavarian State Office for Data Protection (BayLDA), the crypto biometrics project known for its iris-photographing orbs “entails a number of fundamental data protection risks”. The regulator has ordered World to provide a deletion procedure complying with the EU’s General Data Protection Regulation (GDPR) within one month. 

• World argues that the BayLDA’s findings “largely pertain to outdated operations and technologies that have been replaced in 2024” and intends to appeal the ruling. 
• The decision follows previous Sifted reporting in August on the Altman-founded project’s trouble with regulators in Europe. 

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💀 RIP 'climate tech'? — The second wave of sustainability startups is over, some say.

📈 The fastest-growing startup teams in 2024.

👀 There have been, by Sifted’s count, just 34 new first-time VC funds announced this year. Last year, we tracked just over 40; in 2022, it was just over 60. 

• Several funds that announced a first close last year have recently completed final closes — including Robin Capital (€15m) and Common Magic (£10m). 
• Several more funds which announced a first close in 2022 and 2023 are yet to fully close — although a few tell me to watch out for news in January. An 18-month fundraising period between first and final close is fine by most LPACs, we’re told; especially in this market.
• We’ve updated our lists from 2022 and 2023 with final closes, where we know of them. If we’ve missed anyone, please get in touch. 

🤖 AI for non-standard speech and inclusive GPS: Meet the impact startups using tech to tackle the disability divide. (Sponsored by Microsoft’s Entrepreneurship for Positive Impact)

Stockholm-based Voyado, a SaaS platform for retail brands to create shopping experiences, raised €6.55m in funding from H&M Group Ventures.

Fabriano, Italy-based MU Fabriano, which produces electric vehicles, raised €3.5m in funding from investors including CDP Venture Capital and Piemonte Next.

Banbridge, Northern Ireland-based Stora Software, which specialises in self-storage facilities management, raised €1.5m in funding from investors including Investment Fund for Northern Ireland.

Padua, Italy-based Ekore, which specialises in digital twin tech to advance real estate portfolio management, raised €1.3m in seed funding from investors including Habismart and SOM.

London-based New Wave Biotech, which develops AI bioprocess simulation software, raised €1.2m in funding from investors including EIT Food and Innovate UK.

Paris-based Little John, a generative AI platform for insurance brokers, raised €1.1m in pre-seed funding from investors including Febe Ventures, Vessoa Private Equity, Leocare, Didier Valet and Mark Ransford.

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