Estonia is home to an impressive number of early-stage cleantech ventures, with a deal volume which rivals much larger EU countries. Ultracapacitor storage scale-up Skeleton Technologies, now headquartered in Germany, is a product of the Estonian cleantech ecosystem. As the region’s first cleantech-focussed investor, Beamline Accelerator has played a big part in this: investing in early-stage cleantech ventures since 2015, the fund counts 59 startups among its portfolio companies. We spoke to Beamline Accelerator’s CEO Triinu Lukas, and Founder Erki Ani, about the specifics of cleantech investing and essential success factors in building the Estonian cleantech ecosystem.
The fund is specialised in seed-stage investment: for the most part accelerating companies whose technology has been validated by angel investments, or grants from EU programmes such as EIT or Climate-KIC. It grew out of the work of Cleantech Estonia, which has accelerated many cleantech startups. The team identified a need for follow on funding for ventures which have already received initial funding and need more resources to grow.
The majority of the startups supported by Beamline Accelerator are hardware based. These ‘knowledge-heavy’ deeptech startups have specific needs: high investment, long development times. Their founders are often students or university researchers. For this reason it makes sense to have a sector- focussed network of mentors, investors and corporate partners for pilot projects to test solutions in the real world.
For deeptech ventures, the business model is different, the customers and routes to market are different. Measuring impact is becoming more and more important and for cleantech prior knowledge of the details on which to focus is important. It helps to learn from those who have done it before.
Over the years, the Beamline team has analysed thousands of early-stage business plans. Evaluating high volumes of nascent cleantech ventures gives a clear idea of how trends are moving and enables the identification of new technological possibilities as they emerge. They also follow the emergence of new foundation technologies such as machine learning and crypto, which unlock new technological possibilities and so lay the ground for new businesses.
Beamline Accelerator and Cleantech Estonia have been instrumental in developing the cleantech ecosystem in the region. What are some key success factors to replicate this elsewhere?
Non-profit stakeholders play an important role, as do for profit actors. It’s useful to facilitate knowledge flows between academia, business and startups. Following policy developments is also crucial: to understand what’s going on in your own country, and to be able to respond to EU policies.
Both Triinu and Erki acknowledge the contribution of EU funding programmes to early cleantech ventures and are optimistic about the EU’s potential to show leadership in developing policies which promote cleantech innovation. They point to programmes like Horizon 2020 and EIT as providing essential support for knowledge and resource heavy ventures, in terms of non-dilutive funding opportunities as they prove their concept and team before approaching venture capital investors. Competition for grants is increasing, but this can also be seen in a positive light, as it means that higher quality startups will result.