EXCLUSIVE: Hambro Perks is raising £200m for a fund focused on backing tech scale-ups in the environmental sector.
The London-based VC is looking to invest between £10m and £20m over time into a portfolio of 12 to 15 companies at scale-up phase.
“What we’re really focusing on is not as prescriptive as energy transition of net zero or hydrogen – we’re quite broad in our remit,” Duncan White, co-manager of the Environmental Technologies Fund, explains. “It’s environmental or sustainable technologies in its broadest sense across energy, water, circular economy, food, even industrial efficiency processes.”
By targeting the scale-up stage, Hambro Perks is working with founders at a crossroads in business growth: whether to sell up at the £20m-£30m mark or invest in growth.
“The UK has the capital, but there’s a lack of this growth mindset,” White says. “The idea that we don’t need to just develop this technology and sell it once it’s been proven, that we can build nice, profitable, sustainable businesses.
“The entrepreneurs at Series A level that I’m engaging with now have the mindset that’s quite different from five or 10 years ago. Engineers didn’t want to be hiring sales teams, so they would prefer naturally to sell up. Now it’s easier to scale businesses. The world is a smaller place with Zoom.”
The VC isn’t afraid of swimming against the tide and is investing in hardware over software. One recent success story in its portfolio is Bluewater Bio, which has ranked as one of the fastest-growing water companies in a sector not considered high growth.
It also counts Claire O’Neill, former minister for state for business, energy and clean growth, and Sir John Rose, the former CEO of Rolls-Royce, as advisors who can “bring customers to the table the company would never have come across,” such as Iceotope, which recently raised £30m.
“The true breakaways [in the environmental tech sector] will be companies created in new business models that aren’t created in response to a particular subsidy,” O’Neill told Growth Business.
“It’s not a case of building an app and away we go, it’s how do we re-engineer some of the fundamentals of our economy, particularly in relation to energy, production and distribution.
“And that’s serious, hardcore job-creating stuff which does require a complicated ecosystem of public and private partnership.
“The quality of companies coming through in the UK now is better than it has ever been,” she concludes. “We find investors are a bit underweight in the UK – they know there is this tech base but there is this herd reluctance to invest.”
Top 3 qualities Hambro Perks looks for in founders:
#1 – Pioneering: “Brave enough to try something different at scale.”
#2 – Open mindset: “Recognise you may not have the skills to do everything. To require help to enter a particular market because it’s complicated. The willingness to embrace external expertise.”
#3 – Vision: “A longer term vision for the company. Ask yourself if you want to sell at £20m, £200m, change the world or relocate the company. And that’s not just for the founder but the management team and the company.”
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