According to a recent Deal Room report on the Spanish tech ecosystem, the combined enterprise value of Spanish startups will exceed €100 billion in 2023. In the latest evidence of this upward trend, Madrid-based venture capital fund Seaya has closed Seaya Andromeda, a €300 million Madrid-based “Article 9” climate technology fund.
Article 9 refers to the EU's Sustainable Finance Disclosure Regulation, which places a responsibility on investment firms to ensure that their investments have a positive impact on society and the environment.
Seaya has been in existence for 12 years and focuses primarily on mission-driven startups in Europe and Latin America. The new “Andromeda” fund will invest in growth companies specializing in the energy transition, decarbonization, sustainable food value chains and circular economy.
The company says the new climate fund will deploy an initial capital of between 7 million and 40 million euros, with additional capital reserved, and plans to make 25 investments by the end of 2027. So far, five investments have been made from the fund (see below).
Seaya itself was founded in 2013 by Beatriz Gonzalez, a former private equity investor who became involved in climate and sustainable investing after investing in a recycled clothing line. She previously worked for Morgan Stanley, Excel Partners and Derby Overseas Investments in the US. She later became a trustee of Telefonica's pension fund and led its alternative assets program.
Under Gonzalez, Seeya has invested in climate tech companies including Biom Makers, Clarity Eye, Crowdfarming, Descartes, RatedPower, Samara and electric vehicle charging station company Wallbox (which will list on the New York Stock Exchange in 2021).
Over the phone, I asked Gonzalez whether he thought there was a particular advantage for Spanish funds to work on climate tech, given Spain's proximity to some of the worst impacts of climate change, including extreme heat, drought, wildfires and storms.
“That's a good question,” she said. “When we think about the energy transition and decarbonization, I think that coming from southern Europe, and Spain in particular, we are better placed for two reasons. One, we have more extreme heat waves in southern Europe, so obviously there is a much greater social consciousness. But we also think that in the industries that we are targeting, we have a competitive advantage.”
“We are pioneers in renewable energy, we have great talent, we have big companies making automotive parts, so we have a big industrial base, as well as agriculture and real estate. So we're getting industry expertise and talent from southern Europe, and particularly Spain, and we think that gives us a bit of an advantage.”
We also asked them what kind of expertise they have to make deep tech investment decisions in climate technologies.
“We have some engineers so we have the expertise in-house, but our LP network also includes big European Union banks like Santander that do project finance for energy and factories. So having access to that knowledge allows us to do our due diligence and move faster.”
So far, Seaya has used its knowledge to invest in several related companies, such as Seabery, a Spain-based augmented reality skills training solution that developed AR software and hardware for training welders, which eliminates the need for actual welding for training and reduces carbon emissions by 95% per welding session.
The firm also invested in UK-based AI-powered waste management startup Recycleye in February 2022, which is developing robots that sort trash for recycling.
The firm has invested in Pachama, a San Francisco climate technology company that uses data to verify the quality of carbon credits and enable the launch of new carbon credit projects.
News of the new fund follows signs of a fundraising renaissance in southern Europe, with Plus Partners launched just last week in Barcelona with the aim of raising a fund of $30 million to $50 million.
The 2023 annual “State of European Technology” report also ranked Spain's ecosystem fourth overall and was cited as having the highest number of startup funding deals last year.
