The market

Climate change again attracted a lot of attention in 2021. Floods in Germany and Belgium, heat waves in southern Europe and record-breaking temperatures and fires in Canada hit the headlines around the world. In May the headlines also featured the International Energy Agency report where the scenario for Net Zero by 2050 demonstrated that no new oil and gas fields should be developed after 2021 if global warming is to be kept below 1.5° C. However, the most recent report from the United Nations’ Intergovernmental Panel on Climate Change estimates that global warming will increase beyond 1.5° C sometime around 2040.

The COP26 Climate Change Conference in Glasgow established many new agreements for future work on climate change. The EU’s climate policies were further strengthened by the launch of “Fit for 55”, which targets a reduction in EU greenhouse gas emissions of 55% relative to 1990 by 2030. Joe Biden brought the USA back into the Paris Agreement. Major greenhouse gas emitters such as the USA, China and India all launched ambitious climate change targets.

Climate-oriented companies have established as a significant segment for early-phase investors. Both companies and investors are now more committed to demonstrating their positive impact. We have seen a number of early-phase companies that help their customers in areas such as their carbon footprint and taxonomy adaptation. The majority of investment managers we meet are aware of impact investing, and many established fund managers launched ambitious new impact-oriented funds in 2021.

Portfolio companies

• 2150 launched its first venture capital fund in 2021. The fund was incubated by the Danish real estate company NREP and has offices in London, Copenhagen and Berlin. 2150 invests in companies that help to make cities more sustainable, and its owners include a number of major real estate names and impact investors. The first additions to 2150’s portfolio include CarbonCure (environmentally friendly concrete) and AMPD (electrification of construction sites).
• Antler accelerated its growth in 2021 after being held back somewhat in 2020 by Covid-19. Antler was involved in around 150 start-ups in 2021, and operates from 17 locations across five global regions. A number of new locations are ready to launch in 2022. Antler’s broadly-based portfolio included 400 companies at the end of 2021, and has historically delivered a good return. In addition to its ongoing regional funds, Antler has now embarked on follow-up investments in its global fund. Antler has further emphasised its impact focus, and has published a report titled ‘ESG, Impact and VC’ which is available here.
• Arkwright X Investment Family carried out its first investments in 2021, and Ferd participated as a co-investor in two of these investments. Ignite Procurement offers a software-based procurement system with a distinct ESG perspective, while Yellowsack offers solutions for waste management in several states in the USA. Ferd and Investinor were program investors in AXIF throughout 2021, and Carucel Eiendom joined as a new AXIF member at the close of the year.
• Momentum II is a Bergen-based venture fund that invests in sustainable, innovative and ambitious companies that are in an early growth phase. The fund has a particular focus on ocean industries. Momentum’s largest investors are Farvatn, Investinor and Ferd. The fund invested in two new portfolio companies in 2021:  Navidium and Blue Ocean Technology. The Ferd-owned company Broodstock Capital co-invested with Momentum in Blue Ocean Technology. Momentum II is currently in investment phase and we expect to see a number of exciting new investments in 2022.
• NeXtWind is building a portfolio of older land-based wind farms in Germany with the ambition of either replacing the old turbines with new and more efficient turbines (repowering) or extending the lives of the existing turbines (life extension). This enables the company to increase the renewable energy production capacity of its wind farms while reducing the LCOE (Levelized Cost of Energy). NeXtWind was very active in 2021 and purchased a number of additional wind farms.
• Seagust is a Norwegian offshore wind company that was established by Ferd and Arendals Fossekompani in 2021. Seagust will initially seek licences in the Norwegian offshore wind areas North Utsira and Southern North Sea II. Seagust’s objective is to use the wind power resources of the North Sea to develop renewable energy capacity and build a stronger Norwegian offshore windindustry.
• StartUpLab is an incubator and pre-seed investor that offers office space, networking, capital and industry expertise to Norwegian start-ups. With locations in Oslo and Bergen, StartUpLab has a total hub of over 300 companies, many of which have grown to become some of Norway’s best-known tech companies. Fed invested in Founder´s Fund IV in 2021, which was our third fund investment with StartUpLab.
• The Ecosystem Integrity Fund IV in San Francisco invested in four new portfolio companies in 2021, bringing its total portfolio to 8 companies. The companies in the portfolio include Energicity (solar energy based mini-grids in Africa), Unagi (electric scooters), Ampersand (electric motorcycle sharing in Africa) and ZeroAvia (hydrogen-based aeroplane engines). We expect to see a similar number of new investments in 2022, as well as follow-up investments in existing portfolio companies.
• Wind Catching Systems (WCS) is developing a ground-breaking concept for floating offshore wind, with the potential to produce electricity at a significantly lower LCOE on a significantly smaller area than other technologies known today. Aibel AS – a company in Ferd Capital’s portfolio – and the Norwegian Institute for Energy Technology (IFE) are WCS’s main partners for the technology development process. Ferd has invested in WCS in partnership with North Energy ASA.

Future prospects

Ferd Impact Investing will continue to invest in funds, companies and other partnership structures that deliver both a positive impact and a solid financial return. We will also follow our established investments and help them to make good progress. The team has again been strengthened, and from February 2022 the Ferd Impact Investing team has three members.