New Venture Capital Firm Is Using the ‘Planetary Boundaries’ Model to Invest

London-based Transition is focused on finding startups that can help balance humanity’s impact on the planet.

(Bloomberg) — A new climate tech venture capital firm with a focus on early stage startups that promise to help stabilize the planet has launched. 

Transition, a London-based firm, is backing startups that work within the so-called “planetary boundaries.” Transition began raising funds in June 2022 and is already working with nine climate tech startups, including ocean carbon removal startup Running Tide, enterprise climate platform Watershed, and water risk management platform Waterplan, according to general partner David Helgason. 

The planetary boundaries concept is a framework developed by the Stockholm Resilience Centre that looks at nine systems under immense pressure by human activities, which include ocean acidification, climate change, freshwater consumption and biodiversity loss. The boundaries are crucial for the planet’s stability, and researchers have warned we are living well beyond some of them. 

Transition is focusing on investing in companies with products that improve one or more of these planetary boundaries without negatively affecting the others, said Helgason, who is the co-founder and former chief executive officer of Unity Software Inc., one of the largest venture-backed companies founded in Europe. 

“If we look at our planet, our ecosystem, it’s very interconnected,” said Transition partner Mona Alsubaei. “If we just look at carbon, we might solve the carbon crisis, but that has a cascading effect in other ways, maybe [on] biodiversity or land use, that need to be addressed.” 

Watershed co-founder Taylor Francis said the company chose to working with Transition, which was part of its $70 million Series B round led by Sequoia and Kleiner Perkins, because its partners “knew that market well and shared our combination of optimism and pragmatism and a belief that the European market was going to be core to the future.” 

Although the firm participated in Watershed’s Series B, Helgason said Transition is focusing on seed and Series A startups.

Since then, the new VC firm has been instrumental in helping introduce Watershed to potential customers in Europe as well as help launch the company’s London office. Both firms are prioritizing Europe, given that the region has historically led the climate transition in terms of public policy, technology and business, Francis said.

Transition has launched with a number of prominent venture partners onboard, who assist with strategy and sourcing among other things. Those include Stripe Climate’s head of science Frauke Kracke and former Redwood Materials chief financial officer Andy Stevenson. 

Despite the headwinds the venture capital sector is facing as a whole, the firm’s partners still feel optimistic about the climate sector. While funding rounds take longer and require “more due diligence,” climate funds are still deploying capital, Alsubaei said. 

“It’s at a slower level, but we think that’s probably healthy,” she said. 

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