SET Ventures has closed its fourth fund at €200 million to back digital technologies which will facilitate the transition to a carbon-free energy system.
Doubling the size of its previous fund, this new capital validates SET’s approach to investing in the evolving energy system that will be dominated by renewables. The firm backs European startups with digital-first, data-driven solutions that accelerate the integration of existing renewable energy technologies into mass markets. The fourth fund will invest in entrepreneurs who pioneer business models that incentivise companies and consumers to adapt now, rather than wait for regulation to force a change.
SET Ventures was founded in 2007 and is one of the longest-standing VCs to invest in the clean energy sector. In its investment rationale, the team believes that the physical technologies needed to fight the climate crisis, such as solar panels and EVs, have already reached the market. The urgent challenge now is to implement the digital solutions that allow this hardware to be deployed on a mass scale and integrate seamlessly into our energy infrastructure. For example by facilitating the shift from fixed to dynamic energy pricing.
Adoption rates for clean energy have continually risen across Europe in recent years as technologies are proven, scaled and developed to a mature standard. Last year, electricity from renewable energy sources made up a record 44% of the EU’s total electricity supply. However, as these solutions are increasingly adopted and our future energy system becomes decentralised, new systemic challenges emerge. Challenges such as grid congestion, mismatched production and demand and storage of intermittent renewable energy.
“Hardware is, on its own, not going to achieve urgent climate goals,” says Anton Arts, Managing Partner at SET Ventures. “For decades, our energy system has been geared towards fossil fuels, so it’s no surprise that the energy transition has come with teething problems. In fact, these issues are a positive sign that we are in the midst of this mass rollout.”
He continued: “With SET’s fourth fund closed, we champion the founders who apply digital technology to address these challenges. We invest to spawn a universe of solutions and companies that complete the formula for fully transitioning to a carbon-free energy system in the coming years.”
With 17 years of experience investing in clean energy, SET Ventures has amassed expert knowledge in areas such as electrification, flexibility and decentralised energy architectures and established a network of key partners within the industry, including grid operators and utility firms. The specialised fund has generated successes with early movers such as Instagrid, which recently raised a $95 million series-C round and entered the North American market, Sensorfact, which is working with thousands of industrial SMEs to monitor industrial processes, and sonnen, a first-mover in residential energy storage systems and virtual power plants.
Co-founder and Managing Partner Wouter Jonk said: “When it comes to fighting the climate crisis, we are firm believers that energy is the best place to start. 76% of the world’s emissions stem from energy, so solving this brings the fastest potential emissions reductions. The advantage of our long-standing history is that we understand which technologies are likely to stand the test of time and have a genuine impact.”
He added: “We’re proud that our portfolio reflects this. Last year, our portfolio companies’ work led to the avoidance of 3.3 million tonnes of CO2 emissions.”
SET Fund IV, an SFDR Article 9 fund, has attracted investment from new and existing investors, including the European Investment Fund (EIF), Triodos Energy Transition Europe Fund, a.s.r., Carbon Equity as well as several European grid operators. The companies who have so far received investment are smart heat-management startup vilisto, energy renovation advisor Fuchs & Eule, energy management software provider Tibo Energy, and e-mobilio, the cloud-based e-mobility platform.