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A/O launches new €250 million Fund II, with the first close of its €250mn target to double down on the positive transformation of the built world

July 28, 2023

  • A/O invests in Seed to Series B startups across Europe, UK and North America.
  • Fund II is raised as the world’s climate and energy crisis heightens, putting more pressure on the need to transform the built world.
  • The new fund will allow for more capital to enable the transition of the real estate industry world's largest and most polluting industry according to many recent reports.

London, 28 July 2023: A/O, one of Europe’s largest venture capital firm primarily focused on built-world technologies, is doubling down on investing in technologies that aim to reduce greenhouse gas emissions, build climate resiliency, accelerate the energy transition and digitalization of the real estate and construction industries as it reaches the first close of its new flagship Fund targeting €250 million.

A/O’s thesis:

Founded in 2019, A/O is committed to investing in technologies that enable the ‘positive transformation’ of the built world, a concept that drives the firms strategy throughout. According to recent reports, real estate is the world’s largest ($330 trillion), one of the least digitised and the most polluting industry globally responsible for an estimated 40% of global CO2 emissions. If left unchecked, these emissions are projected to double by 2050 as our economies continue to build more to accommodate growing populations and rapid global urbanisation. An unprecedented climate and energy crisis marred by extreme weather and catastrophic natural disasters has contributed to accelerate the need to drive the digital and sustainable transformation of the sector.

Built World crisis

The built world is facing what many consider to be an existential threat, with a storm of challenges, including rising interest rates, rampant inflation, tightening environmental regulations, and capital markets pressure on non-ESG-compliant assets. The convergence of these powerful stakeholder pressure points has triggered what many believe to be the single largest industry transition and capex super cycle of our lifetime towards net zero. Without rapid adoption of technology that mitigates the impact of the built world on the planet, the relevance and survival of many of the built world’s incumbents could be severely at challenged.

A/O’s Investment focus

The firm’s investment landscape spans the entire lifecycle of the built world. From supply chain, new materials, and AEC (architecture, engineering, and construction), to building operations and management, targeting decarbonisation, climate resiliency, electrification and energy transition, as well as digitisation, automation and big data management through a mix of software, hardware, deeptech and AI.

Through Fund I, A/O invested in 22 companies throughout the lifecycle of the built world Examples of investments in those specific climate related verticals include, amongst others:

  • SPAN (California-based housing electrification)
  • Satellite Vu (UK-based Earth Observation firm)
  • PassiveLogic (US-based next-gen BMS leveraging AI to operate buildings more efficiently.
  • 011H (Spain-based sustainable mass timber prefab developer) taking an asset-light and software-first approach to timber construction
  • Plentific (UK-based property management software platform and trades marketplace

Some of AO’s portfolio companies have gone on to attract global later stage investors including Coatue, Target Global, Brookfield, Wellington Management, Highland Europe, Nvidia, among others.

First investments from Fund II

The first investment from Fund II has already been announced with Enter’s €19.4 million Series A, a company A/O has backed since its Seed round a few months earlier. A/O’s second investment is into a company currently in stealth mode, developing a digital first solution and software platform solving the skilled labour shortages currently holding back the retrofitting industry

Firm’s hiring plans and expansion

A/O currently counts 13 team members, across investments, research and data science with a unique diversity of background, experience, ethnicity and gender. With Fund II, the firm plans to hire more investors, as well as its first head of sustainability who will help execute on the firm’s proprietary “impactful change” framework and help accelerate sustainability goals across its stakeholders.

Gregory Dewerpe, founder and CIO of A/O, said: "We believe this is one of the largest industry transitions of our generation, that will see the emergence of some of the most significant category defining technology companies globally. Furthermore, the emergence of AI in the built world is showing very promising potential to further accelerate the transition to automation, efficiency and transparency across the entire lifecycle of assets and power the next wave of adoption. We believe the transition of the built world is the most tangible way to tackle climate change today and with this new fund we will continue to dedicate our time, resources and attention to it. The more challenging market conditions of the last 18 months have been a great reminder for many that being a specialist firm with deep expertise, backing technology that matters, and aiming to solve mission-critical problems is a good place to be in.

“A lot of the attention on climate change appears to remain somewhat misdirected, creating a false impression that we can solve climate change simply with meatless burgers or paper straws or carbon credits. We can’t. That doesn't mean those initiatives are not important, but rather that they are, in our view , not decisive or impactful enough, at a time of great urgency when we are potentially years away from being caught irreversibly offside. We must focus our time, resources and attention on what truly moves the needle now. Onwards and upwards.”

This is a marketing communication,

This press release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction in which such offer or solicitation is unlawful. This press release is not an offer of securities for sale in the United States (“U.S.”). The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the U.S., its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act. The securities being offered may only be marketed pursuant to applicable laws in the European Economic Area (EEA) and subscriptions will only be accepted on the basis of and in accordance with the limited partnership agreement and the private placement memorandum relating to Fund II (A/O Built Technologies II SCSp), further to the execution of a subscription agreement for interests in Fund II.

This press release contains forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. These risks include, among other things, general industry and economic conditions, conditions in built technology and venture capital generally, competition from other investors, whether Fund II may have additional closings, ability of portfolio companies to obtain additional financing, changes in environmental and other regulations, and the instability of early stage and startup investments generally. You are cautioned not to place undue reliance on these forward-looking statements, and A/O is under no obligation to update any forward-looking statements.

The full risks are set out in the Private Placement Memorandum.

This press release has a purely marketing purpose and is not a contractually binding document.

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