Closing the Series B Funding gap in European Climate Tech

Despite Europe’s considerable investment of billions into early-stage climate technology startups, many promising companies face significant hurdles when seeking Series B funding.This bottleneck restricts their ability to scale and realize full market potential.To tackle this issue, innovative financing solutions have emerged, including Spain-based mundi Ventures’ latest initiative: the Kembara Fund I.

Kembara Fund I: Driving Growth in Deep Tech Innovation

In 2024, Mundi Ventures secured a €350 million commitment from the European Investment Fund under the European Tech Champions program. Building on this foundation,Kembara recently closed its initial fundraising round at €750 million for its fifth and largest fund yet. Regulatory disclosures suggest that total commitments could ultimately reach up to €1.25 billion.

This fund is dedicated exclusively to deep tech ventures and is managed by a seasoned team operating across Madrid, London, Barcelona, and Paris. The leadership includes co-founders Javier Santiso and Yann de Vries alongside climate tech expert Robert Trezona and deep tech investor pierre Festal as general partners. Additionally, former Atomico partner Siraj Khaliq serves as senior strategic advisor.

Tackling Europe’s Scale-Up Dilemma

Yann de Vries brings extensive experience from his roles founding Redpoint eVentures Brazil and partnering at Atomico before joining German electric aircraft startup Lilium-a company that raised over $1 billion but ceased operations in 2024 after failing to secure sufficient growth capital.

“Europe isn’t short on innovation or startups; it struggles with scaling them,” de Vries observes after witnessing firsthand how promising firms falter without adequate late-stage funding.

Kembara targets primarily Series B and C rounds by deploying initial investments ranging from €15 million up to €40 million across roughly 20 portfolio companies. The fund’s size enables follow-on investments possibly reaching €100 million per company-exceeding many existing European funds’ entire capital bases.

the Rise of Large-Scale Deep Tech Funds

• Elaia Capital has teamed with Lazard Asset Management to create Lazard Elaia Capital (LEC), focusing on investments between €20 million and €60 million per startup.
• The operator-led Plural fund is reportedly raising close to €1 billion aimed at supporting European startups through critical growth phases.

This growing trend highlights recognition that sectors like climate tech require substantial financial backing beyond traditional venture rounds due to their capital-intensive nature.

A Hybrid Financing Model: equity Plus Non-Dilutive Support

lilium’s downfall underscored an important lesson for de Vries: relying solely on equity financing can burden companies later with dilution pressures during crucial growth stages. To mitigate this risk, Kembara plans to incorporate non-dilutive financing instruments tailored specifically for deep tech founders-helping reduce future fundraising risks while optimizing capital structures for long-term sustainability.

“We collaborate closely with limited partners who not only invest in our fund but are eager to co-invest directly into standout portfolio companies,” explains de Vries about aligning incentives between investors and entrepreneurs alike.

Geopolitical Factors Shaping Growth Capital Flows

Sovereign wealth funds throughout Europe-as well as governments and corporations-are increasingly driven by geopolitical imperatives aimed at nurturing domestic champions capable of competing globally while preserving technological sovereignty. This dynamic influences Kembara’s sector focus areas which include dual-use technologies relevant for defense alongside core climate innovations designed to protect European interests worldwide.

Nurturing Undervalued Innovators Before Premature Exits Occur

Kembara actively seeks out high-potential ventures often overlooked or undervalued within Europe’s innovation ecosystem-companies poised for global impact but lacking access domestically to sufficient growth capital. De Vries cites OpenAI as a modern parallel: initially underfunded relative to its potential before attracting major investment rounds that propelled it onto the world stage; similarly aspiring firms risk premature acquisition or stagnation without robust local support mechanisms today.

A Global Outlook Anchored in Local Expertise

The name “Kembara,” meaning “to wander” in Malay-and symbolizing “the humble journey toward excellence”-reflects both ambition tempered by humility embedded within the fund’s philosophy.
Founder Javier Santiso previously served as CEO for Europe of Malaysia’s sovereign wealth entity Khazanah International Investments-a connection highlighting Kembara’s openness toward global partnerships while maintaining strong roots within Europe.
Looking ahead beyond initial closes,
the team plans active engagement with international investors seeking not only market access but also diversified supply chains worldwide.

Empowering Europe’s Climate & Deep Tech Ecosystem Moving Forward

• Diverse Leadership: Experienced professionals combining venture capital expertise from firms like Atomico with operational know-how inside fast-growing startups;
• Tactical Focus: Concentrating on mid-to-late stage funding rounds where scaling challenges intensify;
• Innovative Financing: Blending traditional equity injections with creative non-dilutive financial tools;
• Sovereign Backing: Leveraging geopolitical momentum favoring homegrown champions;
• Aspirational Vision: Cultivating globally competitive enterprises firmly rooted within Europe’s borders without premature exits abroad;

Together these elements position Kembara Fund I uniquely amid evolving market dynamics-not merely aiming at survival but fostering lasting success stories shaping tomorrow’s green economy across continents alike.