Corporate investors like Ikea, Scania and Brazilian pulp company Suzano are getting involved in the startups in the accelerator.
A startup accelerator that is part of Imperial College London has seen interest from corporate investors seeking a foothold in seed and pre-seed clean energy companies.
Ikea Innovation Ventures, the CVC arm of the Swedish furniture retailer, commercial vehicles maker Scania and Brazilian pulp manufacturer Suzano have approached early-stage startups in the Greenhouse Climate Innovation Startup Accelerator at Imperial College London.
The accelerator, which goes under the brand name Undaunted and is embedded in Imperial’s Grantham Institute – Climate Change and the Environment – runs a 12-month programme that provides £20,000 ($15,000) in equity-free grant funding to startups developing technologies that mitigate climate change.
As part of the programme, startups meet investors to seek advice on future funding opportunities. Mostly financial venture capital funds, many from the US, come to those meetings. But recently, corporate venture capital investors have approached the startups with interest in funding and doing joint development with the new companies.
“The CVCs are interesting because they are not afraid to scale.”
Jim Shaikh, head of the Undaunted accelerator
Jim Shaikh, head of the accelerator, welcomes the interest from CVCs as they offer not only funding but also advice and access to technical experts. “The CVCs are interesting because they are not afraid to scale. They have the supply chain. They’re saying they can invest, and they invest at pre-seed. Some even say: if you get to a series B, it’s too late for us.”
Shaikh says the corporate investors are also willing to do joint ventures with the startups. “We arranged an introductory session with Ikea Innovation Ventures. And already some of the teams are now linking in to get advice and guidance from their sector experts at Ikea. From our point of view, if they get the sector experts interested and engaged, then that is an easier route to working with Ikea.”
The accelerator focuses on deep tech climate solutions. Among companies in this year’s cohort are Decarbonite, a developer of zero carbon, agricultural-waste derived and fully degradable alternative to building material MDF; Nium, a producer of green ammonia which has raised nearly £3m; and bio-textiles producers Fiiba and Fibe.
Between 20% and 30% of the companies are spinouts from the Imperial College London. The rest come from outside the university’s startup ecosystem.
Startups have to raise at least £100,000 to graduate from the programme. The latest cohort raised between them approximately £6m. The startups tend to be hard tech businesses such as direct air capture sequestration, low carbon materials and waste to hydrogen technology. “They all tend to be very capital intensive, so scale is always an issue for them. We get them so far, but down the road they need lots of money,” says Shaikh.
The accelerator plans to target more CVCs as potential partners for its startups. “There is a range of support they can provide which fits with climate tech in the sense that it’s capital intensive,” says Shaikh.
