According to a recent Dealroom report on the Spanish tech ecosystem, the valuation of Spanish startups will exceed €100 billion by 2023. In a recent confirmation of this upward trend, Madrid-based VC fund Seaya has closed its €300 million Article 9 climate tech fund, Seaya Andromeda, based in Madrid.
Article 9 refers to the EU’s Sustainable Finance Disclosure Regulation, which places responsibility on investment firms to ensure that their investments have a positive impact on society and the environment.
Seaya has been around for 12 years and has focused primarily on mission-driven startups in Europe and Latin America. The new ‘Andromeda’ fund will invest in growth companies specializing in energy transition, decarbonization, sustainable food value chains and the circular economy.
The company said the new climate fund would commit between €7 million and €40 million in its first tranche, with capital reserved for follow-on investments, and plans to make 25 investments by the end of 2027. Five investments have been made so far from the fund (see below).
Seaya itself was launched 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 in the US at Morgan Stanley, Excel Partners and Darby Overseas Investments. She then became a pension fund director at Telefónica, where she led the alternative asset program.
Under Gonzalez, Seaya 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 New York Stock Exchange in 2021).
During our call, I asked Gonzalez whether Spain has a particular advantage in investing in climate technology, given its proximity to some of the worst-affected areas of climate change, including extreme heat, droughts, wildfires and storms.
“That’s a good question,” she said. “If you think about energy transition and decarbonization in Southern Europe, and particularly in Spain, we see that we are better positioned for two reasons. One is that Southern Europe experiences more extreme heat, so there is a lot more social awareness. But we also think that we have a competitive advantage in the industries that we are targeting.
“We have talent and big companies in automotive component manufacturing because we were pioneers in renewable energy. So we have a big industrial base. We also have exposure to agriculture and real estate. So we believe that we have industrial expertise and talent coming from Southern Europe, particularly Spain. That gives us a bit of an advantage.”
I also asked them what expertise they had to make in-depth investment decisions in climate technology.
“We have a few engineers so we have in-house expertise, but in our LP network we have big EU banks like Santander that do project finance for energy or plants, so we have access to that knowledge so we can do our due diligence and move much faster.”
So far, Seaya has used this knowledge to invest in several related companies. For example, Seabery, an augmented reality technology training solution based in Spain, has developed AR software and hardware for welder training, which means it eliminates the need to use real welding to train, thus reducing carbon emissions per welding session by 95%.
Also in February 2022, it invested in Recycleye, a UK-based AI-based waste management startup developing robots to sort waste for recycling.
In San Francisco, the company invested in Pachama, a climate technology company that uses data to verify the quality of carbon credits and launch new carbon credit projects.
The new fund news follows other signs of a southern European capital renaissance: Plus Partners launched in Barcelona just last week, aiming to raise $30 million to $50 million.
According to the annual “State of Tech Europe” report for 2023, Spain’s ecosystem ranked fourth overall and received the most startup funding last year.
