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May 11, 2022
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1 big thing: Emerald rolls out €250M fund

Potted plant on in colors of EU flag
Illustration: Sarah Grillo/Axios

The clean energy and climate tech VC firm Emerald Technology Ventures is rolling out a €250 million (~$264 million) fund focused on institutional investors, Alan has learned.

Why it matters: Emerald has traditionally focused on corporates, but those firms tend to have less capital than institutional investors — and startup valuations are soaring, forcing investors to bring more cash to the table.

The details: Emerald's new European Transformation Fund will focus largely on — you guessed it — Europe, with a target investment size of €10-€15 million (~$10.6-$15.8 million), managing partner Gina Domanig tells Alan.

  • That's slightly larger than Emerald's typical target investment of about €10 million.
  • The fund will seek to allocate about 40%-50% of its investments in energy companies, with the rest aimed at water, industrial technology, food, agriculture, mobility, robotics and advanced materials and packaging.

Catch up fast: Emerald has about €1 billion (~$1.1 billion) in assets under management and under advisory. About €370 million (~$390 million) of that amount is under management, Domanig says.

  • "This is the first time that we have been working with institutional investors since they all exited stage-left at the financial crisis last time," Domanig says, referring to the cleantech 1.0 bubble in the mid-aughts.

Flashback: In April, Emerald announced the launch of a €200 million (~$217 million) venture fund focused on the sustainable packaging supply chain.

What they're saying: "Institutionals cut much bigger checks,” Domanig tells Alan.

  • "The deals that we're doing, the companies could scale if they had more cash — particularly European deals, because European financing rounds are typically smaller than U.S. financing rounds," she continues.
  • At the same time, Emerald is keeping an eye toward a potential correction in sky-high startup valuations, especially in the U.S.

What's next: The first meetings with potential investors took place this week.

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