Pale Blue Dot continues investing in its climate vision, with a second, $100M fund

Sweden-based VC fund Pale Blue Dot bounced onto the scene in 2020 with a €53 million fund to help climate-focused startups. This fund grew again by €34 million in April 2021, and after deploying investments into 28 climate-forward companies, the investor this week announced it has officially closed its second fund. This one is valued at €93 million (approximately $101 million at today’s valuation), with the same thesis in mind: to support climate tech-oriented startups.

Founded by general partners Joel Larsson, Heidi Lindvall and Hampus Jakobsson, Pale Blue Dot looks to make pre-seed and seed investments in European-based companies, although it is open to deals from the U.S., too.

“Climate tech is here to stay,” says Lindvall in a statement to TechCrunch. “As long as the climate crisis has not been solved, we will need to keep investing more money into tech solutions. This space will continue to see accelerated growth as individuals, corporates and governments try to figure out how to decarbonise and prepare for a new world.” 

The firm prefers to lead rounds, writing checks between €500,000 and €2 million. Out of its 28 investments to date, the firm highlights some examples of what it is looking for in the form of Phytoform, a British-U.S. biotech-agritech business, climate risk data analytics firm Climate X; U.K.-based logistics company Hived, Danish EV charging platform Monta and French fintech firm Green Got. There remain a few investments to be made from the first fund before the firm officially starts deploying funds out of its second investment vehicle. The GPs are aiming to invest in 35 startups with this fund, in sectors such as food and agtech, industry, mobility and fintech, provided that they are focused on making a positive difference toward climate change.

The Pale Blue Dot team. Image Credits: Pale Blue Dot

Larsson, Lindvall, and Jakobsson are all former startup founders themselves, giving them a strong founder focus in the companies where they choose to invest. They are also the only members of the investment team, which doesn’t have a hierarchy. Any startup that is offered a meeting with the GPs meets with all three of them. If they choose to make an investment, then the founders can expect the GPs to work closely with them to help their startups grow and flourish. 

“Receiving interest and recognition from the industry is good,” said Jakobsson, “but the fact that amazing founders keep picking us to be their partners on their journeys is the biggest vote of confidence and why we get up in the morning.” 

The new €93 million fund has been created with investment from serial entrepreneurs, family offices and institutional investors from Europe and the U.S. Roughly two-thirds of the second fund’s LPs were LPs in the first fund, with the new LPs having been invited to join.

Pale Blue Dot tells TechCrunch it is eager to meet with ambitious founders from a diversity of backgrounds who are seeking to tackle climate change with their startups. 

Pale Blue Dot continues investing in its climate vision, with a second, $100M fund by Haje Jan Kamps originally published on TechCrunch

VanMoof updates its last-gen e-bikes with simplified X4 and S4 models

Dutch e-bike maker VanMoof is refreshing its entry level lineup with a pair of new bikes available in some very springy colors. The X4 and S4, out this month, retain the frame and philosophy of VanMoof’s previous X3 and S3 e-bikes while trimming some of the complexities that made those models notably high-tech but less reliable for some riders.

Gone is the Matrix display, the impressive screen on the bike’s top tube that displayed critical info like speed and battery levels. The X4 and S4 swap that display, which was well-loved though arguably excessive for this price tier, with a spartan phone mount (for built-in charging, you’ll need to move up to the luxury S5 and A5 models). These models have also swapped out the previous 3-speed gear shifting system for a simpler 2-speed shifter while retaining the speed boost button, most of the anti-theft technology with the exception of Apple integration and the general design and vibe.

Fans of last-gen’s X3 and S3 models may be skeptical about some of the changes, but VanMoof could win them over with one big improvement: color options. VanMoof’s always built some of the most stylish bikes around and it’s high time that potential buyers have more color choices. Prospective buyers now decide between evergreen, purple fog, sunbeam yellow and a foam green, with some fun contrasting bungee cord options that make those hues really pop. The two handsome green options are personally making me question buying a relatively unexciting sky blue X3 on sale last year.

Last year, VanMoof debuted a pair of higher-end e-bikes known as the S5 and A5, adding in a handlebar LED display, USB charging and a new motor for $3998 (at the time of writing; VanMoof has a bad habit of tinkering with its pricing way too often). The company also previously announced an even higher-end, high concept, high speed bike called the VanMoof V, though who that’s really for or how much it will cost remains to be seen.

Hopefully the X4 and S4’s substantial design changes along with VanMoof’s $2,498 price point for these new bikes helps the company’s operation become more sustainable. VanMoof was apparently in trouble toward the end of last year, nearly running out of cash and scrambling for an infusion of investment. While some reviewers, myself included (full disclosure: I bought an X3 last year) haven’t run into many problems, VanMoof needs to clean up its track record of reliability and quality control issues and offer a customer support experience that matches the thoughtful elegance of some of the best e-bikes on the market.

That crisis appears to have been averted, for now at least, and hopefully VanMoof is able to chart a smoother course and stay on the map for the foreseeable future.

VanMoof updates its last-gen e-bikes with simplified X4 and S4 models by Taylor Hatmaker originally published on TechCrunch

Fairphone gets its audio groove on with repairable over-ear BT headphones

Dutch social enterprise Fairphone is best known for its mission to build ethical smartphones via a brand that promises fairer wages for supply chain workers and design choices that encourage consumers to cherish and repair the hardware rather than toss last year’s model thanks to modularity and a web shop selling replacement (and upgradeable) spare parts.

Today it’s taking the leap into a new device category — applying the same principled approach to shipping the most sustainable and fair consumer electronics it can, within limits imposed by wider industry practices which set the availability (and compatibility) of electronics components, to a pair of its own-design, over-ear Bluetooth headphones. The latest repairable Fairphone product is called Fairbuds XL.

Confusingly, Fairbuds XL are very much not (in-ear) earbuds. So the choice of name is evidently a bit of a pun. Fairphone tells TechCrunch there was hot debate internally over what to call the headphones. We can only imagine what other options were toyed with and rejected. But, clearly, naming a pair of over-ear headphones “buds” will cause some to howl in disbelief. Still, at least they sidestepped the obvious (yet alluring) pitfall of calling the cans Fairphones (see what we did there!). The final name choice was favored for being “unique”, as they tell it.

The Fairbuds XL are available to buy through Fairphone’s website (and select retailers) from today — retailing for €249 in the EU. (As with the company’s smartphones they’re mostly only shipping to Europe at present so US readers are out of luck, or else will have to find their own creative shipping solution.)

The repairable headphones come in a choice of two colors: Speckled black (pictured above); or speckled green with some snazzy orange detailing (shown in non-exploded view below):

Fairphone Fairbuds XL headphones in green

Image credits: Fairphone

Fairphone is remaining tight lipped on projections of how many pairs of headphones it expects to ship. And clearly it’s taking a bit of a leap here.

That said, fans of the company may have noticed it does already sell a pair of wireless earbuds (with the more vanilla name of “True Wireless Stereo Earbuds“), so it has been dabbling in the audio accessory space for a while. However Fairbuds XL represent a new category for the device maker, according to Fairphone’s head of product management, Miquel Ballester, and audio product manager, Bob van Iersel, a more recent addition to the team. This is because — unlike with the (actually) earbuds it sells — they’re not working with off-the-shelf components for the over-ear ‘phones. Rather they’ve designed this new audio product from scratch themselves. And designed the headphones to be easily dissembled for repairability.

As with Fairphone’s eponymous (screwdriver-friendly) smartphones, Fairbuds XL are comprised of modular parts that connect up to support ease of repair and promote function longevity — furthering the core mission of shipping more sustainable electronics (vs the built-in-obsolescence industry modus operandi that quickly leads to heaps of environmentally unfriendly e-waste).

“The level of modularity is similar or even more than the phones,” says Ballester, discussing Fairbuds XL in an interview with TechCrunch. “All the [replaceable] parts will be available on the website. And [there are] more specific components that we’ve also designed to be easy to replace — those specific small parts we will not be offering at the beginning on our website. Later, based on need, and what we see on the market, we might want to make all these other parts available.”

“The headphones are built up out of nine modules slash spare parts,” continues van Iersel. “Some of these parts are really relatively simple mechanical parts. Think about the ear cushions, the headband, the hinges. And there are also more complex parts — like the right speaker module which also has the buttons, the Bluetooth chipset and whatnot. So that’s the more comprehensive spare part.

“But in theory, all of them are replaceable. So there is not one single part that defines what the base of the headphones is, let’s say. So even if your Bluetooth module breaks down for whatever reason it’s not the case that you can’t use all the other ones — it’s easy to simply order replacement parts for that and the rest of the headphones will work as they are supposed to.”

“With this product, we truly design it from the ground up,” van Iersel also tells us. “That’s reflected in the modularity, the repairability of the design… With the headphones we saw an opportunity to enter a market which could could benefit a lot from the Fairphone approach — with making products that are more repairable, more durable and really designed to last a long time. That’s that’s what we set out to do with these headphones and what we think that we achieved as well.”

“For us, the headphones is a way to bring to the market what we do in the supply chain in the design of our products,” rejoins Ballester. “So this is kind of a proof that it can be done. And — for me — we are closing a gap in the market… There are no other companies doing, in this case headphones, as an artefact for changing the industry.”

Other elements that check Fairphone’s core ethical electronics mission are a “living wage” pledge applied to the headphone’s suppliers to encourage them to provide fairer working conditions for workers in their factories. There’s also fairtrade gold integrated into the Fairbuds supply chain. While recycled materials make up over 80% of the plastic weight of the headphones — with 100% recycled aluminium in structural parts, too.

Some non-recycled plastic has been used in areas where acoustic considerations are more sensitive, per van Iersel. So there’s an element of Fairphone needing to balance core product performance against sustainability targets. But Ballester says they’ll continue seeking to push the boundaries of what’s possible on the recycled materials front.

Designing such a bespoke audiophile product necessitated Fairphone bringing audio expertise in-house (to supplement its existing mobile hardware smarts). They also worked with partners on tuning the audio — touting a “signature sound” for the Fairbuds XL, as van Iersel puts it. On the audio performance side, he expresses confidence that the sound quality is reflective of what consumers can expect for over-ear headphones retailing at this price-point. (Cheaper Beats cans are in the same sort of price range, for example.)

“Fairphone did not originally have the audio expertise in house to build these kinds of projects so we made sure to partner up really well — with both hardware suppliers as well as on the software side. We have partnered to ensure the great sound quality that we managed to achieve in the end. Because, with this product, we didn’t want to just offer a ‘fair’ version of what headphones could be; but they should also be able to carry their weight when it comes to sound quality,” he tells TechCrunch.

“On the hardware side, there are different things that make up for the sound quality. It’s not only the components that you put in but also how you put them in. So we’ve chosen a chipset that supports… a high fidelity audio codec to make sure whenever you throw at it from your phone it gets processed in a Hi-Fi definition. And next to that we use 40 millimetre dynamic drivers, which is comparable to what anything in this category would have. But also, we made sure not just to select the right drivers but also to have our partner carefully design the acoustic chamber in which they are placed inside the headphones themselves — because that’s massively affects the final sound as well.”

Other sound quality considerations van Iersel says the Fairbuds’ designers have paid attention to include the clamping force of the headphones and the material for the ear cushions to ensure a proper seal. As noted above, it also worked with a third party audio calibration partner, called Sonarworks, to tune the sound.

“We developed a custom Fairphone sound signature that is part of these headphones. And it’s even something that we could carry on over to future audio products as well,” says van Iersel, noting Sonarworks created a selection of audio pre-sets Fairbuds’ users can choose from in a companion app which is launching with the headphones (both for iOS and Android).

“We also intend to reach different or new target audience with this,” he adds. “Because with the phone there’s obviously a huge threshold for consumers to switch brands, to go for something that they don’t know yet. But we do have a lot of fans of Fairphone that like our mission and would be happy to support it but aren’t willing to take that leap to buy a smartphone. But this could be a much more like the entry level Fairphone [product].

“That’s also why we chose to develop the application not just for Androids but also for iOS. So we’re not just targeting current Fairphone customers… It’s really a product that’s meant to compete with all other headphones — and not just be seen as a Fairphone accessory because that’s absolutely not what it is.”

The need to build up the necessary expertise in new product category goes some way to explaining why it took Fairphone a (fair) bit longer than it had originally expected to get the Fairbuds XL to market (circa four months). But, well, hardware is hard and its repairable Bluetooth headphones are juggling both swappable mechanical (moving) parts and higher tech chipsets, as well as shipping with the aforementioned companion apps to let users custom-tune the sound. So there’s perhaps more work involved in Fairphone delivering decent modular cans than you might consider at first glance.

A range of spare parts are available to buy for the Fairbuds XL on its web shop from launch — such as new ear cap covers for a few Euros or a new battery for around €20. Consumers of the product get a two year warranty on purchase, so any component breakages in that time are likely to be covered by Fairphone (well, unless you damage the product by sitting on it or something).

Given Fairphone offers a five year warranty on its new smartphones, a two year warranty for Fairbuds XL may seem a little low ball for a brand that centers sustainability. And Ballester admits they had wanted to be able to offer the same five year pledge. But he says uncertainties attached to shipping a device in a new category, and specifically needing to see how the headphones stand up to real world daily use/abuse, led them to opt for the less risky choice of a shorter warranty at launch. He adds that they hope to be able to extend it in the future as they see how the Fairbuds perform in the wild.

One neat longevity feature he highlights is the product has been designed so it can always function as wired headphones — meaning that, even many years hence, when it might finally be impossible to get a replacement battery for this particular Fairbuds model (even from Fairphone’s own web shop), the headphones will still function without a battery by plugging them in — at least assuming there’s a USB-C socket to hand. (Regionally at least, that’s a fairly safe bet since EU lawmakers are pushing for USB-Type C to be the charging standard for consumer electronics.)

Talking of supportive policymaking, the EU is working on right to repair legislation that looks set to give Fairphone’s approach considerable regional uplift in the years to come. And Ballester welcomes the planned expansions to EU ecodesign legislation. Discussing this, he also suggests lawmakers could go further, too — flagging the need for them to pay greater attention to consumer electronics business models and find more ways to support models that aim to sell consumers on sustainability, rather than sticking with the dirty old gadget-makers’ game of driving resource-hungry hardware upgrade cycles.

In Fairphone’s home market of the Netherlands, it’s now offering a smartphone subscription service, called Fairphone Easy, that lets users rent its handsets for a flat monthly fee which covers the cost of any necessary repairs and/or replacement. When the lease expires or the device breaks the handsets are returned to the company for reuse (refurbishment) or else for recycling components at end of their useful life to maximize resource utilization and minimize e-waste.

“I think it’s two models that will have to coexist,” suggests Ballester, tracking where sustainable consumer electronics may be headed in the years to come. “You will have the type of consumers that are more convenience driven. Like ‘I am very sustainably minded but I don’t need to repair a product myself.’ [Who] will buy into a service proposition because [they] don’t get the burden of ownership. And that’s totally fair. And there will be a type of consumers that will be fine with that burden of ownership because they know they need to recycle at the end of life. They need to keep their device as long as possible. They know that they need to repair.

“So for me these two models will coexist in the future. And we’ll have to divert more convenience-driven consumers to our service propositions… And I think companies should be smart enough to create the business models that really unlock sustainability for any type of consumer. And I think service propositions have a role there.”

Fairphone gets its audio groove on with repairable over-ear BT headphones by Natasha Lomas originally published on TechCrunch

Wingcopter, Germany’s drone delivery startup, raises another $44M from the EIB

Wingcopter, a startup out of Germany that has made a name for itself in the world of delivery drones used primarily for delivery of medicine and other goods to remote areas, has picked up some more financing to expand its business. The European Investment Bank is putting €40 million (close to $44 million) into the startup, funding that it will use in two areas: further developing its hardware line; and to kick off a new business in logistics and delivery services, anchored by a fleet of its drones.

The funding is being described as “quasi-equity” — and it’s a common approach taken by the EIB (other examples here and here) that involves one portion of the funding coming in as equity and the rest as a venture loan. Tom Plümmer, Wingcopter’s CEO and co-founder, would not disclose the proportions of either in an interview. He said the plan is to raise a significant Series B next year — or whenever the markets turn around.

For now, this latest infusion brings the total raised by Wingcopter to €100 million, which has also been backed in two previous fundraises by a mix of strategic and financial backers such as the retail giant REWE, Xplorer Capital, Japan’s ITOCHU, and Expa, the investment firm started by Garrett Camp of Uber.

And it more than doubles Wingcopter’s previous valuation — a figure that it is not disclosing, either. But if you consider that its bigger U.S. counterpart Zipline last month raised $330 million at a valuation of $4.2 billion, Wingcopter clearly sees the opportunity in the market — and given it has raised only around one-tenth the amount overall, where it likely is right now.

Image Credits: Wingcopter

Wingcopter’s raise is coming at a key moment in the wider vertical take-off and landing space overall. In addition to Zipline’s raise, just a week ago, the VTOL business Lilium, which is developing an air taxi business, disclosed that it was raising another $250 million, with $100 million committed so far from Tencent.

But in the more dicey financial waters of today, companies like Wingcopter have something that the air taxi businesses do not: active deployments, albeit small ones. The company has been working with Unicef in Malawi to help it deliver medicines to hard-to-reach areas, and the plan is to expand that service to more geographies and in more partnerships.

Wingcopter, like Zipline, has focused most of its efforts on the emerging region of Africa, and on very specific use cases.

While the company is still awaiting regulatory clearance to start pilots, and eventually services, in Europe, he said that he was approached by the German government to see if Wingcopter’s drones could help form part of the fleet of drones being sent to Ukraine to help it with its defense against Russia.

Wingcopter refused: the company, he said, is committed to its drones never being used in combat situations. That won’t rule out, however, potentially using them at some point to deliver goods when the fighting ceases and Ukraine becomes more focused on reconstruction.

In the meantime, the plan will be to expand business development into other emerging regions alongside Africa, including Asia and Latin America. And that is where the services element comes into the picture. To be clear, Wingcopter will continue to develop and sell drones to individual organizations as it has done up to now. In the wings is a hydrogen-powered model that will, Plümmer said, extend the range of its aircraft by five times compared to models that currently run on batteries. “We will do Frankfurt to Berlin on one charge,” he said.

But more realistically, the unit cost of Wingcraft’s models continues to be typically too high for the kinds of organizations that might be the most likely to use them, and so that is why the startup will also be looking at ways of providing services on top of fleets that it will lease out instead.

Currently, Wingcopter, in working with Unicef, uses a mixture of its own proprietary software on its own devices alongside ERP software from third parties like SAP. But the plan is to build its own logistics and delivery backend to manage this service and work with its fleet, and any other device that it might make sense to use for other legs of a delivery.

“We will integrate our existing drone software into a logistics system that we will design, and we will track the orders,” he said. “This is partly why Garrett [Camp] was interested in us. But yes, as a logistics provider we’ll need to be more platform agnostic and open. We want to build the best logistics service so we are looking at a combination of air and ground vehicles and we are open for more partnerships than we would have been as just a drone company.”

Part of the EIB’s mandate is to finance promising startups out of Europe to push forward the region’s technology industry, but another part is to invest in projects that further the region’s ecological mandates, which is the case here, since the use of drones not only reduces the amount of traffic and emissions from delivery vehicles, but also furthers the work being done to build more clean energy systems, as is the case with Wingcopter’s hydrogen-powered model that is currently in development.

“Europe is currently the global leader in cleantech, and we must work hard to maintain this lead. Backing European cleantech pioneers with global reach like Wingcopter is central to our mission,” said EIB VP Ambroise Fayolle, who oversees Germany, in a statement. “Electric cargo drones are an important vertical segment for a future of sustainable transport and logistics. This investment underlines our commitment to supporting entrepreneurs growing and building advanced green technology businesses in the European Union, strengthening our technological competitiveness, creating highly skilled jobs and opening up new markets, while preserving nature. We are proud to be supporting this European success story.”

Wingcopter, Germany’s drone delivery startup, raises another $44M from the EIB by Ingrid Lunden originally published on TechCrunch

Despite a rocky start, climate tech is in a good position to tackle the rest of 2023

Last year, climate tech seemed to be invincible while the venture capital and startup worlds were fretting about a downturn and scrambling to conserve cash. Climate tech investors and founders in 2022 may not have hit the heights of 2021 but they didn’t drop off a cliff either.

In the first quarter of the year, we started to see cracks in the firewall that separates climate tech from the broader tech industry: The space saw a decline of more than a third in both the number of deals and money invested compared with a year earlier.

Still, there are plenty of possible reasons why the sector’s sudden stumble was merely a misstep and not the beginning of a downward spiral.

For one, the Inflation Reduction Act may have encouraged some to close deals sooner than they planned to. Many founders I’ve spoken with said that the law, which was signed in August, was both welcome and unexpected. Not only did it provide support through new regulations and incentives, it also brought certain climate technologies into the national conversation.

As a result, some founders felt the need to speed up their plans. That might have left the pipeline a little dry in the new year.

“The correction for climate tech companies was mostly at entities that SPAC’d or went public as if they were a single winner-take-all entity.” Arch Rao, founder and CEO, Span

Then SVB collapsed. The bank’s failure didn’t hit climate tech as hard as some other sectors, but the bank had been friendly to climate tech startups, accounting for some 60% of the total financing for community solar projects.

But the real impact was felt at a deeper level: SVB’s collapse didn’t make running a VC firm or a startup any easier no matter what it focused on. “Operationally, if you’re running a firm, the SVB stuff put new deals down,” Abe Yokell, managing partner at Congruent Ventures, told TechCrunch+. “You couldn’t make capital calls; you couldn’t use your lines of credit or somebody on your syndicate could not.”

So, between SVB and the market reacting to a new regulatory regime, it’s no surprise that Q1 strayed a bit from previous trends.

But what does the rest of 2023 look like?

Yokell suspects that the pace of deals will largely hold up. “My suspicion is that on a deal-count basis, it’ll be pretty steady as she goes,” he said. “We’re still seeing a lot of flow at the early stage as well as the mid- to late-stage.”

Despite a rocky start, climate tech is in a good position to tackle the rest of 2023 by Tim De Chant originally published on TechCrunch