Planet A, a Berlin-based climate tech and sustainability VC, has closed its first fund at €160 million. The fund will take a unique approach of only investing in startups that successfully pass an assessment by its in-house science team, ensuring the fund has a positive impact on the world. Partners in the fun in BMW, KfW Capital and the German supermarket REWE, as well as the Danish state’s Vaekstfonden. It also attracted participation from several serial entrepreneurs, including Trivago’s Rolf Schrömgens, HelloFresh’s Maximilian Backhaus and Zalando’s Rubin Ritter.
Planet A’s founder and CEO, Fridtjof Detzner, joined TFN to discuss the fund’s inspiration and what they hope to achieve.
Funding that makes a positive difference to the world
Detzner became an entrepreneur when he was still, legally, a child. “I started quite early in school. I did websites for other people,” he explained. Joined by his classmate co-founders, they developed the service Jimdo, “ we build and update your website, or create an online store, that has now been used 32 million times, and the company is not 280 people.” However, after 18 years, Detzner decided it was time to do something new.
His next step was television, shooting a documentary series for Deutsche Welle, looking at ten different companies around the world, each through the lens of one of the UN’s Sustainable Development Goals. The experience proved transformational for him. “From child labour, to climate change, to food scarcity, it was a unique learning experience,” he said. “Coming back from that experience, it was obvious to me that I wanted to spend my time on and resources on things that, I believe, will make a difference.”
Detzner founded Planet A with Tobias Seikel, Nick de la Forge, Christian Schad and Christopher Grad. However, it’s perhaps the input of Lena Thiede, who brings 20 years of climate research and policy experience, that makes Planet A stand out.
“The impact qualification is the one core pillar of Planet A,” says Detzner. “Through lifecycle assessments, we can calculate the exact footprint of a company or technology.” Planet A exists to make successful investments, but it aims to invest in a way that maximises the positive impact it can have on the planet. It’s so important that their science team can veto an investment, even if the financial side might make it the most compelling prospect they have seen. Detzner continued, “venture capital has such an enormous power, to shape the future of our industries; we need to put that power into the solutions that really make a measurable difference.”
The approach puts Planet A at the head of a growing trend. Frank Niederländer, a board member at the BMW Foundation, said, “we are witnessing a fundamental shift in regulation and capital, creating new markets and enormous advantages for green-tech startups. Planet A’s scientific approach to identify and support such game-changing ventures is one of the most convincing we have seen so far in the market.”
A science-led investment fund
The science-led approach means that startups must undergo a rigorous assessment, considering everything from the raw materials used to support their product or service, to its end-of-life, ensuring that there is a net positive impact. Despite the rigours of the approach, the fund has already invested in 14 early-stage startups, who benefit not just from the funding, but also the external validation the process offers.
The fund is also conscious of the broader impact that VC can have, and is implementing robust diversity policies and expecting them from their investments too. Internally, recruitment shortlists must have at least 50% of candidates from a diverse background. And it also partners with organisations like Future.VC and WomenInVC. “Twenty-three per cent of our portfolio have at least one female founder,” says Detzner.
The fund has exceeded expectations. “We wanted to raise €100 million, and ended up with €160 million,” Detzner highlighted. They plan to support around 30 companies, with initial investments of between €500,000 and €3 million. And their focus is across a range of sectors and products. Early additions to their portfolio include Makersite, who decarbonise the supply chain, GA Drilling, whose drills are making geothermal energy more practical, and carbon storage innovators, 44.01.
However, Detzner is aware of the potential for sustainable investments in almost any sector, leaving Planet A with more of a geographic, than a sectoral focus, and they are looking for startups across Europe. The most important aspect is the science. “The primary goal is to bring scientific decision-making process into investment and to give science the power,” says Detzner. “We are in one of those all-hands-on-deck situations: we need politics and regulation to change the systems; we need founders and new technologies to emerge; we need corporates to adapt these new technologies. A lot of different players need to act together, but venture capital has an enormous potential, and it needs to do that by building expertise and making informed choices.”