Why do we have so many energy & impact VCs?

For over 20 years, I've been working with early stage companies in the energy and cleantech sector. I've been an advisor, VC, founder, energy startup board member and even a researcher.

I also act as an external reviewer of EU's EIC accelerator financing applications. Through that work I have noticed that there are a TON of promising energy tech companies struggling to gain buyer visibility and find asset financing beyond the FOAK (first-of-a-kind) stage.

If you wonder what FOAK is, read this article by Yair Reem. The article focuses on larger pilot plants, but the problem is the same also for smaller asset investments in the 0.5-5 MEUR range. Great majority of the energy projects are in this smaller range .

"Day 2" is the name I use for the company development stage after FOAK. How do you scale and finance your first 10 or 100 customers as an energy venture?

There are LOTS of market-ready solutions that could be deployed by buyers if the "day 2" financing products would be easily accessible. And if the buyers knew about the new innovations in the first place. This is especially true for solutions that tackle decarbonisation of industrial processes.

There are a few investment firms that have made the asset financing of new clean solutions into a big and profitable business. Best known is the US-based Generate and one of its founders Jigar Shah who made the SunEdison model famous.

Some European VCs have been investing in companies that are enablers of the "Day 2" growth. Companies like 1KOMMA5° , Alight and bullfinch .

But this is just scratching the surface, really.