What distinguishes a tech company with strong climate intentions from an “impact unicorn” that is truly capable of scaling positive impact to a billion lives?
For us, an impact unicorn is a company where there is a direct relationship between the revenue it generates and the impact it creates. It is not just about doing no harm or contributing some good; the core business model ensures that for every dollar earned, there is a corresponding positive impact. If the company succeeds, it is creating significant value for society.
This is one of the primary factors we evaluate in the investment process, ensuring that the link between business success and societal benefit is permanent and fundamental.
When backing founders, we look for ambition, energy, and enthusiasm, but also a deep, fundamental drive to improve lives beyond just building a successful business. This mindset of impact first is crucial. Many of the sustainability and impact challenges we tackle involve disrupting the status quo, not just improving existing systems. So, we assess how deeply sustainability and impact resonate with the founders, why they chose their specific mission, and whether they are genuinely driven by it.
Can you illustrate an example you have found particularly compelling of ESG values married to a commercial-success model at the core of a business?
One example is 1KOMMA5°, a company we have supported for some time and recently participated in their most recent round as well. They focus on bringing clean energy to homes, first in Germany and now expanding across Europe and APAC. Initially, our main metric was CO2 or energy efficiency, but we have also seen benefits such as cost savings for consumers and energy independence. That kind of multi-layered impact enhances both the environmental and social aspects of the ESG thesis.
Do you see a greater appetite among institutional investors for any one of the ESG components in particular?
Institutional and later-stage investors tend to prefer metrics that are easily defined and measurable, such as CO2 emissions or emissions reduction, which are more straightforward to quantify than concepts like energy sovereignty or improving quality of life. I do see that the E component is often prioritized, but we have seen growing recognition of the need to expand the conversation to include other factors such as biodiversity and methane emissions. As measurement tools and language evolve, these elements are becoming more accessible and investable.
How does Norrsken VC invest in companies beyond providing capital?
We provide a range of support, including assistance with navigating grants, SFDR, and identifying SDGs. A crucial element is helping early-stage companies to develop the tools and language to effectively communicate their impact. Although we invest in businesses with clear impact goals, it is equally important to help them articulate and showcase that impact to others. Our support extends across various areas to ensure that these businesses not only succeed but also contribute to the broader ecosystem by promoting transparency and communication of their positive effects.
Do you believe venture-scale solutions can change entrenched systems like food, energy, or materials?
I do think venture-backed solutions can drive significant change. Many innovations in venture funding start as audacious ideas that require primary capital and early believers to get off the ground. For instance, Evroc’s concept of a secure, sovereign and sustainable hyperscale cloud to strengthen Europe’s cloud market began as a bold idea but is now gaining traction. Venture capital helps scale ideas like these, pushing them to a point where they become commercially viable and competitive in the market. Once ideas reach this scale, they can truly transform industries. We want to show that it is possible to achieve high impact without sacrificing financial returns, which can have a ripple effect across the entire ecosystem.
What are some recent investments you have made that made you feel hopeful about systemic impact?
One recent investment is terralayr, which focuses on battery storage solutions. They offer energy flexibility on demand through their smart platform and physical assets. This investment stands out because it aligns with multiple layers of importance, from regulatory tailwinds supporting these applications to the economic and technological factors that are coming together to make sense. This is crucial for advancing renewable energy infrastructure, enabling the continued growth of wind and solar power, and supporting the transition to a more sustainable energy system.
Have you ever felt conflicted or disillusioned with the limitations of VC?
While the venture capital space has its challenges, including macroeconomic shifts and changing funding environments, we have stayed committed to our mission. There have been difficult periods, such as the clean tech bubble and energy crises, but the key is to remain steadfast in supporting sustainability and impact-focused businesses. The crucial part of leadership in this space is maintaining belief in the long-term mission, even when short-term trends or headlines might suggest otherwise.
What does success look like, both for Norrsken VC and your own career, in this decade of climate-action urgency?
In the climate space, success would be defined by a broader acceptance of sustainable investment practices. If more investors embrace climate-conscious investing and it becomes mainstream rather than niche, that would signify success. For me personally, success would mean being known as a long-term, sustainable investor who has proven that environmental sustainability and financial sustainability can coexist. If we achieve that, it will indicate that we have done something right and have influenced the industry to adopt this mindset on a larger scale.
