According to a recent report by Dealroom on the Spanish tech ecosystem, the total value of Spanish startups will exceed €100 billion in 2023. In the latest confirmation of this upward trend, the Madrid-based venture capital fund has announced the launch of a new platform. Siya Seaya Andromeda, the €300 million Article 9 climate tech fund based in Madrid, has closed.
Article 9 refers to EU Sustainable Financial Disclosure Regulationwhich places the onus on investment companies to ensure that their investments have a positive impact on society or the environment.
Founded 12 years ago, Seaya focuses primarily on startups working towards specific goals in Europe and Latin America. The new Andromeda Fund will invest in startups specializing in energy transition, decarbonization, sustainable food value chains, and the circular economy.
The company said the new climate fund will allocate between €7 million and €40 million as a down payment; will retain capital for follow-ups; and plans to make 25 investments by the end of 2027. So far, five investments have been made from the fund (see below).
Seaya was founded in 2013 by former private equity investor Beatriz Gonzalez, who got involved in climate and sustainability investing after backing a recycled clothing line. She previously worked at Morgan Stanley, Excel Partners and Darby Overseas Investments in the US. She then became a director of Telefónica’s pension fund, where she led the alternative assets programme.
Under Gonzalez’s leadership, Siya has invested in climate tech companies including Biome Makers, Clarity.ai, Crowdfarming, Descartes, RatedPower, Samara, and electric vehicle charging station company Wallbox (which went public on the NYSE in 2021).
During a phone call, I asked Gonzalez if she thought there was a special advantage to having a fund outside Spain specializing in climate technology, given the country’s proximity to some of the worst impacts of climate change, such as extreme heat, drought, wildfires and storms.
“It’s a good question,” she said. “If you think about the energy transition and decarbonization, coming from southern Europe, particularly Spain, we see ourselves as more suited for two reasons. The first is that southern Europe has more extreme heatwaves. So obviously there is a much greater social awareness. But we also think we have competitive advantages in the industries we target.
“We have been pioneers in renewable energy, so we have the talent and we have big companies in the automotive parts industry. So we have a big industrial base. It’s the same with agriculture and real estate. So we think we have the industrial expertise and the talent coming from southern Europe, in particular, and Spain, which gives us a bit of an advantage.”
I also asked what kind of expertise they had that would allow them to make informed investment decisions regarding climate technology.
“We have a number of engineers, so we have in-house expertise, but in our network of limited partners, we have big banks in the EU like Santander that finance energy projects or factories. So having access to that knowledge helps us do our due diligence and move faster.”
So far, Seaya has used that knowledge to invest in several related companies. The Spain-based augmented reality skills training solution, SiberianFor example, augmented reality software and devices have been developed to train welders, meaning they don’t need to use real welding to train, thus reducing carbon emissions by 95% per welding session.
It also invested in a UK-based AI waste management startup. Recycling In February 2022, which builds robots to sort trash for recycling.
In San Francisco, the company invested in Pachamaa 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 comes on the heels of other signs of a Southern European funding renaissance. Just last week, Barcelona-based Plus Partners launched with the aim of raising between $30 million and $50 million.
Annual State of European Technology Report The 2023 report also found that Spain’s ecosystem ranked fourth overall and said it had: higher Number of startup funding in the past year.