Spain's exposure to climate change helps Madrid-based VC Seaya close €300M climate tech fund
According to a recent Dealroom report on the Spanish tech ecosystem, the combined enterprise value of Spanish startups surpassed €100 billion in 2023. In the latest confirmation of this upward trend, Madrid-based VC fund Seaya has closed Seaya Andromeda, an "Article 9" €300 million climate tech fund based out of Madrid.
Article 9 refers to the EU’s Sustainable Finance Disclosures Regulation Act, which puts the onus on investment firms to ensure their investments have a positive impact on society or the environment.
Seaya has been around for 12 years, mainly focusing on mission-driven startups in Europe and LatAm. The new "Andromeda" fund will invest in growth companies that specialize in energy transition, decarbonization, sustainable food value chains, and the circular economy.
The firm said the new climate fund will deploy between €7 million and €40 million as a first check; will retain capital for follow-ons; 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 launched back in 2013 by former private equity investor Beatriz González, who got into climate and sustainable investing after backing a recycled clothing line. She previously worked for Morgan Stanley, Excel Partners and Darby Overseas Investments in the U.S. After that she became a director of Telefónica’s pension fund, leading its alternative assets program.
Under González, Seaya has invested in climate tech companies, including Biome Makers, Clarity.ai, Crowdfarming, Descartes, RatedPower, Samara, and electric car charging stations company Wallbox (which went public on the New York Stock Exchange in 2021).
Over a call, I asked González if she thought there is a particular advantage in having a fund out of Spain tacking climate tech, given the country's proximity to some of the worst effects of a changing climate, such as extreme heat, drought, wildfires and storms.
“It's a good question,” she said. “If you think about energy transition and decarbonization, coming from Southern Europe, particularly Spain, we do see that we are better suited for two reasons. One is because Southern Europe is having more extreme heat waves. So clearly, there is much more social awareness. But we also think that we have competitive advantages in the industries that we are targeting.
"We've been pioneers in renewable energy, so we have the talent and we have the big companies in the manufacturing of auto parts. So we have a big industrial base. The same with agriculture and real estate exposure. So we do believe that we have the industry expertise and talent coming from Southern Europe, especially, and Spain, that does give us a bit of advantage.”
I also asked what kind of expertise they have that will allow them to make deep tech investment decisions about climate tech.
“We have a couple of engineers so we have that in-house expertise, but in our LP network we have big European Union banks like Santander which do project finance for energy or factories. So having access to that knowledge helps us do the due diligence and move much faster.”
Thus far, Seaya has used that knowledge to invest in several relevant companies. Spain-based augmented-reality skill training solution Seabery, for example, developed AR software and hardware for training welders, meaning they don’t need to use real welding to train, thus reducing carbon emissions by 95% per welding session.
It has also invested in U.K.-based AI-powered waste management startup Recycleye in February 2022, which builds robots to sort rubbish for recycling.
In San Francisco, the firm invested in Pachama, a climate tech company that uses data to verify the quality of carbon credits and enable the launch of new carbon credit projects.
The news of the new fund follows other signs of the Southern European funding renaissance. Only last week, Plus Partners launched in Barcelona, aiming to drum up a $30 million to $50 million fund.
The annual “State of European Tech” report for 2023 also found Spain’s ecosystem to be in fourth place overall and said it had the highest number of startup fundings last year.
