Hardware technologies, deeptech, new materials, themes that are not usually the focus of venture capital funds’ investment theses but are instead at the heart of Algebris Climatech’s strategy, as Marco Turchini, who together with Stefano Ferrari and Alessandro Santo is one of the fund’s three managing partners, explains to Startupbusiness.
“With Algebris we started investing about four years ago with a EUR 300 million private equity fund that invests in sustainability, then after a couple of years from the birth of that fund we saw that there was room in the world of technology related to sustainability and we decided to make a product dedicated to venture capital, so we built the fund in 2024 by launching Climatech, which aims to invest in international projects that have the core in technology rather than in operations and that have a certain continuity with the world of companies in which the private equity fund invests because some of the verticals are very similar: energy, mobility, materials, agrotech, these are areas that are very close to each other as, for example, is the case with water recovery and we go to optimise energy flows with new technologies and recovery of materials that can be used in industry or agriculture”.
Climatech is mainly looking at projects in the harvesting phase of series A rounds, i.e. companies that generate the first revenue: ‘this is so that we can give maximum support as we have an industrial genesis background in the team, the initiative follows a bit what I had already done with A2A’s CVC in 2019’.
The fund, which is actually a structure with two funds, a main fund and a parallel fund co-investing according to predetermined rules, aims to raise a total of EUR 100 million, of which EUR 60 million is already committed, and expects to close the funding period in June 2026 with a possible extension until the end of next year.
“We are now in the initial part of the life of the fund and we invest both in Italy and in Europe, but also in North America, already 50% of the projects we see and evaluate are international, mainly European, and we invest in hardware technologies, where deeptech, which is another leg of our investment thesis, goes with hardware more than with software, we do not do software only, although the software components are obviously there, but in support of the hardware, this approach is quite distinctive on the market because usually investors, especially in southern Europe, are not very attracted by hardware. With 100 million we expect to make about 15 investments, so the average ticket is higher than the average, in the first two deals we announced we invested a total of 9 million euro, and the next three we are already evaluating we expect to invest 10-12 million euro in total, so we are looking to invest heavily because we believe this strategy will generate a better return for the fund.
The first two deals closed by Algebris Climatech are the EUR 6 million deal of Krill Design conducted together with Primo Climate and Crédit Agricole Italia, the startup develops innovative biomaterials for various applications such as packaging and already works with large companies such as Autogrill and Venchi, Illy caffe, has a patented technology in both the material and the process that exploits food industry processing waste with on which the biopolymer is generated that is then also suitable for 3D printing, Krill Designa generated around €1.3 million in production value in 2024: “the company is doing well, it has a technical team that is growing, and the 6 million euro round that we have led serves to expand the production capacity to bring it up to 6-8 thousand tonnes per year in order to allow industrial customers to be supplied on a regular basis.”
The The second deal is the one in Blubrake, a €12 million deal conducted together with Fundracer and Tri-Star Group. “Blubrake has 12 patents for its ABS solution for e-bikes, the company generated 2.5 million euros of product in 2024, and the round we closed was a bit complex because there is some secondary and some primary, participations in the form of capex, and the goal is to create a production facility for ABS for e-bikes at a reduced cost and size, in this case we invested with international investors, a Dutch fund and a Chinese company, we are the only Italian investor, and this is also important in view of the company’s international growth.
Algebris Climatech has active relationships with a number of Italian and international industrial partners that are also considering joining the fund with the aim of finding partnerships for the development of their innovation programmes: ‘this wait works from the perspective of co-investment for the corporate world, we are working with 6-7 companies at the moment, aiming to arrive at a maximum of around 20 and then optimise the collaboration processes’.
“The three upcoming deals concern an operation in the world of automatic industrial process control with applications mainly in the chemical and energy fields, an Italian company that is already operating internationally from the Middle East to the USA, then a British company that operates in the world of precision agriculture with non-chemical technologies, thus enabling the elimination of pesticides, and then a company working between Sweden and Denmark that has developed a hardware device for the production of energy from renewable sources that already has pilot projects in Portugal, the USA and Canada. In these cases we also invest with different international partners, it is important for us to have projects that show international ambition from the first meeting’.
Turchini (pictured) and the fund’s two other partners, who collectively have a track record of venture capital investments totalling around EUR 400 million, are very focused on the most advanced technologies and are looking at projects that can be completed over the life of the fund, which has a development plan of five plus years between the fundraising and investment phase and the deal maturity phase: “we can leverage the expertise also of the people in the private equity fund to better evaluate deals from a technical point of view, of course we look carefully at everything but there are still aspects, such as nuclear fusion for example, that have development times that go beyond the life of the fund, we consider them but for what we will work so that it will be our second fund”.
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