VC firm 2150 is raising €210 million in funding to solve climate challenges in cities

If you want to solve climate change, there are few better places to start than in cities.

“The city is kind of like a beautiful vampire squid that is sucking up all the resources,” Jacob Bro, co-founder and partner at 2150, told TechCrunch. “It basically brings together all the prosperity in the world — 80% of GDP — but also 70% of the emissions and all the other resources, all the waste, all the negative aspects of the good life.”

Many investors have raised significant funds to tackle climate change in recent years, with many measuring success by returns and carbon reductions. 2150 does the same thing, but to find fertile ground for investments, it starts by looking at problems and opportunities in cities, specifically.

“If we look at all the things we consume, and all the things we need to build, to make the urban prosperity platform work and thrive, you can identify the technologies and the bottlenecks,” Brough said.

He said the climate angle helps give the fund an advantage. “Sustainability, if done well, is a better business, isn’t it? It’s cheaper, faster, and more independent of geopolitics.”

This dual focus has helped 2150 raise a new second fund worth €210 million from a group of institutional investors and family funds, including Chr. Augustinus Fabreker, Church Pension Group, Danish sovereign fund EIFO, Carbon Equity Fund of Funds, Novo Holdings, Islandbridge Capital, Security Trading Oy, and Fisman Generations Group. The new fund brings the European company’s assets under management to 500 million euros.

The new fund has a total of 34 limited partners, said Christian Hernandez, co-founder and partner at 2150. “Very large checks,” he added.

So far, 2,150 has invested in seven companies from the new fund, including AtmosZero, which makes industrial heat pumps; GetMobil, an e-waste recycling startup; Metycle, a marketplace for scrap and recyclable metals; and MissionZero, a live-air capture startup. Three others have not yet been announced.

In total, 2150 is looking to invest in 20 companies in the second fund. Most of the startups you write checks for will raise Series A rounds, and the checks will total around 5 million to 6 million euros, Hernandez said. Half of the fund will be allocated to subsequent investments.

The partners said they will look for a range of startups, similar to what was the case before. However, they are particularly excited about the opportunities in data centers and automation, both driven by the recent boom in artificial intelligence. But for them, AI is more than just an opportunity to invest in energy-related companies.

“The impact there is more societal than climate,” Hernandez said. “Europe is expected to lose 100 million people between now and 2040 – just people getting older. The Netherlands already has 50% of its population over the age of 50. So what role does industrial automation play in helping these people to be productive, but also in generating GDP and financing these people’s pensions?” He said.

The focus on industrial applications may have been obvious in hindsight, Brough said. “All cities are eventually supplied by large or small industries,” he said.

The focus seems to be paying off. Hernandez said 2,150 portfolio companies reduced one megaton of carbon emissions last year. “The fact that a small venture capital fund can already reach the megaton level in just four years, and this level of impact, coupled with commercial traction, makes me feel like we are doing the right thing.”