Ecosia, Google Search Engine Rival Launches $405 million VC Fund To Support Climate Tech Start-Up

Ecosia, the search engine that uses its ad revenue to plant trees, has launched a 350 million euro ($405 million) venture capital fund focused on the climate crisis. The so-called World Fund will invest in the “next generation” of founders looking to tackle the issue, Ecosia said and will measure its success on “climate returns” as well as financial returns.

Research published Tuesday shows that climate tech start-ups have raised more money so far this year than they have in any other year, with $32 billion pumped into start-ups tackling climate change around the world since the start of 2021.

The Ecosia search engine has 15 million monthly active users and it expects to report annual revenues of 25 million euros ($29 million) this year. The size of its user base pales in comparison to Google, however, which has billions of users. Kroll said Ecosia is “extremely well connected to a lot of climate start-ups” but it’s unable to support them with the money it’s generating through its search engine.

Bill Gates, the billionaire co-founder of Microsoft, said in an interview that aired Wednesday that climate tech will produce eight to 10 Teslas, a Google, an Amazon and a Microsoft. The people at Ecosia have a similar view, believing that the most valuable companies of the next decade will be those enabling a decarbonized world. 

One important caveat to note is that every company that World Fund invests in must contribute to a significant reduction in carbon dioxide emissions. Specifically, the Fund will only invest in companies that have the potential to remove 100 megatons of carbon dioxide each year from the atmosphere. “Everything comes back to that figure.

The World Fund said it will look to back carbon-cutting companies in food and agriculture, transportation, and the “built environment,” among others. Ecosia claims that the World Fund is the biggest of its kind in Europe, while the world’s biggest is operated by Gates’s Breakthrough Ventures and stands at $2 billion.

Global climate tech VC investment has soared from $6.6 billion in 2016 to $32.3 billion in 2021 so far, an increase in funding by almost five times, according to a report from promo agency London & Partners and VC analysis firm Dealroom.co.

The VC industry has traditionally been somewhat reluctant to invest in climate tech start-ups but Dara Saharova, a general partner at World Fund, said companies in the sector that were founded between 2008 and 2013 now have a market cap of around $800 billion.

“In Europe, there’s a lot of people who invest $1 million to $5 million, and there are some big institutions now who are willing to put in, you know $30 million-plus per company,” Douglas said. “But there’s virtually no one in between.” He added that the World Fund has been created to bridge the gap.














SOURCE: CNBC
IMAGE SOURCE: PIXABAY