Cleantech start-ups in Germany have already raised $229mn in VC funding in January 2023, as investors bank on the transition to renewable energy.
Cleantech start-ups in Germany have already raised $229mn in VC funding in January 2023, as investors bank on the transition to renewable energy.
Berlin-based solar start-up Enpal has raised €215mn in a series D round led by TPG Rise Climate, earning it a post-money valuation of €2.25bn. Softbank Vision Fund 2, Activate Capital, HV Capital, Princeville Capital, and Westly Group also invested in the deal equity round, which followed an €855mn venture debt investment from BlackRock, Infranity, ING Bank, PGIM Private Capital, and UniCredit Group in December 2022.
The company will use the money to meet high consumer demand, develop its product, and enter new markets in Spain and Italy. Enpal rents solar panels to residential consumers for a subscription fee, using artificial intelligence (AI) for installation services, for which in 2022 it received the Next Economy Award, the German sustainability prize for innovation, and social and ecological responsibility.
Cleantech companies’ goal of making renewable energy a realistic, accessible, and affordable option, is all the more urgent as both companies and consumers face high energy prices triggered by Russia’s invasion of Ukraine and sanctions on Russian gas. Germany is also under pressure to find alternative energy because it is the largest source of greenhouse gas emissions in Europe, with CO2 emissions almost 80% higher than the next worst offender, the UK. The German government has set the most ambitious target of any industrialized nation, aiming to achieve climate greenhouse gas neutrality by 2045 as outlined in the Climate Change Act 2021. What’s more, its Energiewende program is regarded as the most comprehensive roadmap to carbon neutrality.
Preqin’s Company Intelligence dataset shows that cleantech start-ups in Germany have already attracted $229mn of investment in 2023, following $704mn in the whole of 2022. VC firms have deployed capital to companies developing climate tech solutions such as green hydrogen electrolyzers, harvesting power from nuclear fusion with laser-driven energy technology, building cost-effective energy storage, developing software for green utilities that connects producers and consumers, as well as installing photovoltaic panels, smart meters, and thermostats in buildings.
TOP VC investors in German cleantech start-ups:
Transition to green energy will drive growth
Start-ups that develop new technologies to address climate change will be integral to both the decarbonization of the economy and achieving the goals set in the Paris Agreement. The scale of the challenge in Germany, combined with a genuine plan to achieve the goals, could make Germany a major exporter of cleantech products in the future. Companies engaged in environmental protection generated €78.9bn in revenue in 2020, and employed 311,000 people, according to Clean Energy Wire. Enpal may just be one of the leaders of a herd of cleantech unicorns.
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