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What Are European VCs Looking for in Sustainability Startups in 2023?

sustainability startups
Image credit: Canva

Last year, the climate tech venture market defied gravity. While global VC funding has dropped across sectors amid the threat of war and recession, climate tech startups pushed through a year of record investment, peaking at $70.1B, up 89% from 2021There’s no denial that climate tech and sustainability startups are high up on VCs agendas in 2023, but just what solutions, business models, and markets are VCs hoping to scout?

The Recursive reached out with the question to European VCs investing at early stages. Here is what VCs are looking for in sustainability startups:

  • Passionate founders, who dare to turn their vision of a better world into reality;
  • Quickly scalable, digital technologies with a unique approach to solving climate problems;
  • Solutions for neglected challenges in areas such as the built environment, transportation, or scarcity of natural resources;
  • Mitigation solutions that embed climate adaptation and resilience;
  • Measurable impact, such as the amount of carbon dioxide emissions saved;
  • Sustainability startups that also have strong plans about funding and sales and thus can be financially sustainable.


Hampus Jakobsson, General Partner at Pale Blue Dot

About the company: Pale Blue Dot is a seed-stage ClimateTech fund based in Sweden investing in Europe and the US, in startups that reduce and reverse the effects of climate change and prepare for a new world.


“We see climate change as humanity’s biggest challenge and that many problems can be solved or alleviated through technology. We are happy to back teams that ambitiously want to tackle these challenges.

We are looking for solutions that use quickly scalable, digital technologies with a unique approach to solve a big climate problems led by teams who want the solution to scale globally. We generally avoid “cleantech solutions” that are better hardware, but look for when software provides a more efficient way of scaling even if the solution could contain hardware. 

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We have invested in food tech, transportation of goods and people, supply chain transparency, steel optimization, cold storage/3PL, distributed energy optimization, circular fashion, climate fintech, vegetation monitoring, and biodiversity measurement. Pale blue dot invests in very early stages.

We think that many problems are still not tackled; within the built environment, long distance, good transportation over water or land, water scarcity, and many, many more.”


Namratha Kothapalli, Principal Investor at Speedinvest’s Industrial Tech team

About the company: Speedinvest is an active European early-stage investor based in Austria, with investors in Vienna, Berlin, London, Munich, and Paris. They invest into climate tech startups from their general fund, from across all six of their sector-focused investment teams, as well as do follow-on investments through the Climate & Industry Opportunity fund, allowing companies to scale further and help Europe achieve its target of net-zero emissions by 2050.


“We will continue to look for impact-driven, passionate founders that are building the foundations of a new future-compatible decarbonized economy – embedding climate adaptation and resilience into mitigation solutions

There are several sectors that touch on this theme across water, mining/metals, and energy/raw material efficiency in industrial sectors that we think will turbocharge the transition and that’s where we are spending more time this year.”


Matei Dumitrescu, General Partner at ROCA X

About the company: ROCA X is the largest entirely privately funded Romanian VC investment fund aimed for disruptive businesses at the beginning of the road, at an MVP or prototype stage, with the vision of having an impact in society.


“I always looked for impact startups that can really have an impact. We love vision and purpose. To accomplish that vision though, you have to have the capacity and the necessary resources to get there. For a business to be sustainable it has to be financially sustainable, thus it needs to have strong plans about funding and sales. 

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Grants are a boost, sponsorships a relief, but clients’ money, paid for the problem you are solving are what really matters. And with them you can fuel your business again and again, in a sustainable way, and make a real impact.”


Danijel Višević, Managing Partner at World Fund

About the company: World Fund is a European Climate Tech VC investing in seed to Series B startups that have the potential to save at least 100Mt CO2e per year, focusing on key emitting sectors: Energy, Food & Agriculture, Manufacturing, Buildings and Transport.


“We predict that 2023 will be a year of maturity, sober-headed analysis, and focus on the technology most capable of solving the climate crisis for VCs. 

At World Fund, we back entrepreneurs building climate tech that can save at least 100 Mt CO2e emissions per year by 2040, and we are one of the first funds to have strict measurement criteria based on science. We’re seeing more funds take this approach and are actively working with our peers to make this an industry standard

This will be a big, measured shift away from making somewhat unscientific bets on companies with limited climate potential, such as e-scooters, towards real industry disruptors, such as our most recent portfolio investment in battery-recycling start-up cylib.”


Karolina Wojtas, Investment Manager at Icos Capital Management

About the company: Icos is a collaborative venturing fund that brings together corporations and startups to build strong partnerships that will make the startups financially and sustainably-wise successful.


We continuously look for companies that create solutions for the sustainability of human beings and the environment and founders who are driven to make their companies the best in the business. We have already invested in a number of sustainable companies such as Carbon Clean (co2 capture), Napiferyn BioTech (alternative proteins), or Holiferm (biosurfactants). In 2023 we will continue to look for quality propositions characterized by strong IP and underlying technology, exceptional founders, and highly impactful markets.

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We look at the companies through the 3P model – people, planet, profit. We are interested in opportunities that deliver environmental impact and human benefits without compromising financial returns. The areas of our interest in 2023 will continue to be industry decarbonization and digitization, energy transition, food systems and agriculture, and sustainable


Nadia Soultanova, Head of Urban Network and LP Support at Urban Impact Ventures

About the company: Urban Impact Ventures is an impact venture capital investor on a mission to improve urban quality of life in Europe. They target the funding gap for sustainable transformation of cities and invest in entrepreneurs seeking to apply technology to urban infrastructure in Europe.


“We continue to look for scalable business models in the Decarbonization and Circular Economy verticals of the urban sustainability transformation. 

Efficient solutions for the built environment and the mass urban mobility have great impact potential, but circularity-focused models are also gaining good traction in various urban domains and we are ready to support the most promising of them.

In 2023 we plan to turn more attention to the region of South-East Europe, where we believe the sustainable development agenda becomes increasingly important and many impact-driven startups are starting to emerge.”


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Antoanela is a Sustainability Communications Specialist and Deputy Editor at The Recursive media. From these roles, she is helping organizations communicate their latest sustainability goals, strategies, and technologies. She writes about climate tech, ESG, impact investment, sustainability regulation, and related topics.