Investment Focus:

• Check size: €1M–4M
• Stage you invest: Seed and Series A
• Size of your fund: €300M
• Industry verticals: Food, construction, and energy
• Geographies you invest in: Mainly European companies but occasionally globally‍
• Portfolio companies include: Reversion, Bloom, Batteries, ModernHydrogen, GA Drilling, Ineratec, H₂PRO

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A member of the Extantia Capital team, Carlota brings her expertise in European energy markets and a rich career history to the world of venture capital, with a focus on high-impact climate solutions. Her investment strategy is not only driven by the potential for financial return but by the pressing need to address climate change.

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Background and Journey to Extantia Capital

Carlota’s career began in the European energy markets, working at Merrill Lynch, where she gained valuable insight into the energy sector. After a stint at several early-stage startups, including a challenging pre-seed project, she transitioned to venture capital through a role at a crypto asset manager. However, it was an MBA at London Business School (LBS) and a position at Amazon that helped her realise her true calling— investing in climate tech.

Now at Extantia Capital, Carlota focuses on companies with the potential to significantly reduce or avoid gigaton-level carbon emissions. Her team invests primarily in early-stage climate tech startups, at the seed to Series A stages, and avoids fundamental science risks. As Carlota explains, "We provide the capital that helps those companies move from a demo or out of the lab to a first-of-a-kind solution."

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Investment Focus and Key Sectors

Each year, Extantia Capital identifies a few key sectors to focus on, and 2024 is no different. "This year, we’ve looked at steel, the primary plastics problem, and natural hydrogen. For the rest of the year, our focus will be on green data centres and net zero fertilisers." Although these themes shape their immediate priorities, they remain open to investing in other promising areas within the broader climate tech landscape.

Global economic shifts, such as the war in Ukraine, have further influenced their investment focus. Rising energy prices and Europe’s increasing dependence on external resources have made energy resilience a top priority. Carlota’s team has responded by investing in companies that secure local mineral resources and develop renewable energy alternatives like biogas.

Carlota also touched on how rising interest rates have changed the fundraising environment. "The taps are no longer pouring as freely as before," she noted, saying that while good companies and funds will continue to raise money, the bar is higher as capital allocators now seek outsized returns from riskier assets.

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Criteria for Investment

When evaluating potential investments, Carlota emphasises the importance of a strong team, commercial readiness, and long-term viability. While breakthrough technology is extremely important, she notes that it isn’t everything. "You need a team that can deliver, commercialise, and execute on that," she says, highlighting the need for balance between technical expertise and business acumen. Founders need to demonstrate both traction and a deep understanding of their target customers.

Carlota also stressed the importance of realistic goals and commercial agreements. "You don’t need booked revenues, but having conditional JDAs or other agreements can show investors that there’s demand for your product." Additionally, she believes it’s critical for startups to break large milestones into smaller, more manageable goals to maintain investor confidence, especially when developing hardware, where things may not go as planned.

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Due Diligence and Process

Extantia Capital follows a two-part due diligence process: pre-term sheet and post-term sheet. Pre-term sheet focuses on understanding the technology, business model, financial runway, and intellectual property, with the option to consult external experts if needed. Post-term sheet, the team performs "confirmatory diligence" to verify key claims made by the founding team.

Carlota notes that startups should always be transparent during the pre-term sheet stage. "A deal usually only falls apart at the post-term sheet stage if the founding team hasn’t been open with us. So, it’s really not worth hiding things or not being straightforward."

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Market Positioning and Success Stories

When discussing market positioning, Carlota says this depends on the sector. First movers can benefit in some markets, but in others, it’s often better to be a fast-follower than a first-mover. She cites the example of direct air capture, where second- and third-generation companies are learning from their predecessors and combining technologies to lower costs.

One of Extantia Capital’s early success stories is Reverion, a biogas company that innovatively leveraged its technology to reverse the process of electricity generation from biogas and hydrogen production. "Reverion showed strong demand early on by securing customer agreements before having manufacturing capacity. That helped them raise the largest Series A in climate tech in Europe."

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Carlota also spoke about scalability, particularly in hardware investments. Extantia favours business models where scaling involves parallelising— such as containerised solutions— rather than linear growth that requires complex new engineering. "If you can scale by connecting multiple smaller units instead of building larger plants, it reduces complexity and speeds up deployment," she said.

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Mentorship and Portfolio Support

Carlota highlighted how Extantia leads most of its investments and actively supports portfolio companies by sitting on their boards. The firm connects founders with mentors and encourages collaboration within their network of founders, such as at their annual CEO summit, where founders share their experiences and learn from each other’s challenges.

She also emphasised the importance of providing founders with outside mentors. "First-time founders often need advice they may not want to share directly with investors, so we help them find guidance beyond our boardroom."

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Advice for Startups: The Power of Storytelling

One of Carlota’s strongest pieces of advice for founders is the importance of storytelling. She stresses the need for founders to clearly and compellingly communicate their vision to investors. "You need to show that your product can reach cost parity with, or ideally undercut, dirty technologies," she added. It’s crucial to demonstrate commercial traction early on, even if the technology isn’t fully ready yet.

Carlota also made a key point about tailoring the pitch to the audience. "If you're a climate tech company raising from climate tech investors, don't spend too much time on the problem of “climate change”. We already know what the problem is— that’s why we raised the fund." Founders should focus instead on what makes their solution viable and scalable, and where it fits within the evolving regulatory landscape.

She said, rather humorously we thought, that she had seen a lot of presentations attempting to educate climate investors on the extent of the climate change problem. But of course, they usually already know how bad it is.

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In addition to that, Carlota encourages startups to communicate their long-term vision. "You need to show where you'll be in ten years, not just what you're doing today." This ability to articulate both the present and future potential of the company is critical in winning investor confidence.

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Looking Ahead

Looking to the future, Carlota believes industrial decarbonisation remains underfunded compared to transport and energy, though she expects more capital to flow into this area as new funds are raised. Despite economic challenges, she remains optimistic about the continued growth of the climate tech sector and the ability of great companies to attract funding.

Extantia Capital remains committed to finding and funding innovative technologies that will make a real impact on climate change.

From all of us at Brighter Future, we thank Carlota very much for her time and conversation, and we wish her and Extantia great success in driving climate solutions forward.