Tomas Kemtys and Rokas Peciulaitis
Contrarian Ventures
Contrarian Ventures, a climate tech investment firm, has secured €25 million from the European Investment Fund to back European start-ups tackling the climate crisis.
The fund, led by Rokas Peciulaitis and Tomas Kemtys, will back start-ups at the seed stage and is raising further backing from investors with a hard cap of €100 million.
The European Investment Fund’s financing comes via the European Commission’s InvestEU program. Other investors include the Polish sovereign wealth fund PFR, Molten Ventures and the Grantham Foundation.
Peciulaitis said there is more momentum behind climate funds when it comes to raising money from limited partners.
“This is not a mere trend, it’s definitely a category in its own right. The last couple of years have shown how big the potential this category [has],” he said.
This is Contrarian’s second fund. It has previously backed companies like e-bike maker Zoomo and carbon offsetting start-up BeZero Carbon.
It invests in sectors like energy, carbon markets and mobility and most sectors that fall under the climate tech investing strategy, with the exception of food and agri.
“Our portfolio is split systematically. We do hardware, hardware-enabled software and we do software. The split goes 20/20/60, more towards the software side of things,” Peciulaitis said.
It backs companies at the seed stage, which are “pre-product-market fit”, and assists with aspects like marketing and networking, including through its annual conference.
The EIF investment in the fund is part of its mandate to back climate-focused enterprises. At least 16% of its activities must be targeted at climate and environment issues.
“[Contrarian’s] first fund showcased their ability to build a portfolio of exciting energy, transport and infrastructure startups and is a marker of the team’s resourcefulness and resilience,” said EIF chief executive Marjut Falkstedt of its investment in the fund.
Co-founder Kemtys said that around €57 million has been closed from partners to date ahead of its €100 million hard cap that it aims to reach by year’s end. One investment has been made through the second fund so far but the fund is not disclosing its name.
While the founders of the fund are bullish on the prospects in climate technology, their portfolio has come up against its own challenges including the e-bike start-up Zoomo, which served delivery companies that have undergone a downturn in the last year.
“The whole last-mile delivery space went through a crazy shift in the last 12 to 24 months,” Kemtys said. “It’s been challenging for the whole industry, there’s been a lot of consolidation and bankruptcies but also [an effect] on people serving those markets. Zoomo had some lay-offs, they started looking and raised a round and are now focused on unit economics and profitability but also diversifying their business.”
Contrarian has been active since 2017 but in recent years venture capital funds have increasingly turned their focus onto climate-related investments, with the emergence of dedicated funds.
World Fund also received funding from the European Investment Fund late last year. It too is backing start-ups addressing climate challenges but its remit extends to food companies where it has made a few investments.
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