FTSE 250 constituent IP Group (IPO ) has launched a wholly-owned subsidiary Kiko Ventures, focused on supporting disruptive climate tech companies. Kiko Ventures will launch with a US$450m investment platform ready to support startups from Seed and Series A/B through to the IPO stage.
IP Group already has a £175m cleantech portfolio that this new venture will build on. IP Group's cleantech team, led by partners Robert Trezona, Jamie Vollbracht and Arne Morteani, will lead the new Kiko Ventures brand in building up promising companies in the field. All three partners have extensive prior experience in climate tech.
IP Group has a sound record of identifying and nurturing cleantech companies, including Ceres Power (fuel cells), First Light Fusion (fusion power) and Oxbotica (autonomous mobility). CEO Greg Smith added: "Our highly experienced team have dedicated their careers to climate tech and we believe that, consistent with our strategy of deeper thematic focus, a dedicated platform in the cleantech space will help accelerate our efforts in this area and deliver returns for shareholders alongside impact for society."
Kiko Ventures plans to deploy $245m over the next five years using IP Group's flexible capital platform. Kiko Ventures will benefit from IP Group's evergreen portfolio structure, which recycles returns from exits into new opportunities and allows for a long-term horizon.
Climate tech is a rapidly growing segment with a record $40bn invested in 2021. Current disruption to Russian oil and gas exports to Europe has accelerated interest in sustainable energy sources. Currently, most investors in the field adhere to traditional fund and corporate mandates, which is where IP Group/Kiko Ventures' evergreen structure can have an impact, as projects in the sector often require longer development schedules.
"As an evergreen platform without a fixed 10-year investment mandate, Kiko Ventures can be a highly flexible investor, able to do what's required. It can be entrepreneurial through venture creation of new companies, invest at Seed and Series A/B stage or choose to capitalise on opportunities in the public capital markets. The team has extensive global experience in operating across all these stages. As one of the largest climate-tech investors in Europe, Kiko Ventures will primarily invest directly, and on occasion indirectly through selected funds. It will combine this structural flexibility with a focus on thematic areas where it can build deep expertise and value." the Company said in a statement.
It should be noted that Kiko Ventures is being launched at a time when many funds are cautious to expand or take risks due to high inflation and recession fears. We have previously reported on the related energy crisis in Britain, and other companies bringing clean technologies to market. As electricity and fuel prices soar, there has been increased activity in the sustainable energy and smart grid sectors, and the creation of Kiko Ventures should be a further catalyst in the space providing investors further opportunities to participate in the sector's long-term growth.
Follow News & Updates from IP Group: