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Announcing our investment into Satgana Fund I & an established portfolio at 4.2x 📈
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Announcing our investment into Satgana Fund I & an established portfolio at 4.2x 📈

Some days are better than others. This is one of those for us as we’re announcing our investment into Satgana and true to form, we do that by sharing with you a spotlight article & pod - dive in! 👀
Transcript

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Some days are better than others. This is one of those for us at eu.vc as we’re announcing our investment into Satgana 🪴 and true to form, we do that by sharing with you a spotlight article Satgana and an episode with founding partner Romain Diaz.

We have known Romain for quite some time now and had the pleasure of both cooking, talking shop and working together and now - also investing.

As we say on the pod episode:

Climate, French accents, Winning personalities and a very interesting track-record and preliminary performance in the fund to date. What’s not to like!?

On top of that, with a fund size of 10 M€, Satgana lives up to two principles we strongly believe in: small is beautiful and the power of angel LP communities.


Table of Contents

  • TL;DR

  • Watch the full interview with Romain 👀

  • Investment Thesis & Strategy

  • The GP team

    • Romain Diaz, General Partner

    • Anil Maguru, Partner

    • The Satgana Collective

  • Track record

  • The Story Behind Satgana

  • A note on the journey to first close.

  • The EUVC x Satgana Fit

    • Small is beautiful

    • The power of angel LP communities.

  • Portfolio deep dive

    • Orbio Earth: Revolutionizing Methane Emission Monitoring

    • Kubik: Building Sustainability with Innovative Construction

  • A final nod to Satgana for running a tight ship

  • Join the EUVC Syndicate Community


TL;DR

Satgana is a next-generation Climate Tech Venture Capital firm investing in the Future of Earth. With an established portfolio of 13 companies of which ~40% are from underrepresented backgrounds.

But maybe most interestingly to many, Satgana boasts an outstanding Multiple on Invested Capital (MOIC) of 4.2x on the fund that is currently closing - in other words; here’s the opportunity to buy in at 1x to a portfolio that’s already achieved quite a mark-up… Seems like impact can go hand-in-hand returns 💞.

What is more, with a community-focused approach and 60+ Limited Partners, Satgana is a great match for us and clearly well-positioned to become one of our strong partners in the climate space giving us exactly what we look for in emerging managers: potential outlier performance, insights and strong co-investment opportunities.

In one sentence, Satgana is looking to support purpose-driven entrepreneurs in Europe and Africa who are developing pain-killers (must-haves), not vitamins (nice-to-haves), to the increasingly severe environmental problems we face today.

Needless to say, we’re more than eager to share this in-depth episode and article on Satgana, their journey, and the mission and vision that unites the team behind it.

Watch the full interview with Romain, Founding GP of Satgana 👀

Chapters:
00:00:00 - LP Syndicate into Satgana Fund One
00:02:16 - eu.vc - a union of values
00:04:27 - The Challenge and Opportunity of Climate Change
00:06:23 - The Journey to First Close
00:08:17 - The Decision to Pursue Funding
00:10:21 - Building an Investment Firm with LPs as the Focus
00:12:19 - Fee Structure and Carry Model
00:14:22 - Investing in Climate Technology
00:16:22 - Investing with Strategic Angels
00:18:14 - Investment Strategy and Fund Size
00:20:09 - Co-investment and Diversification with Angels
00:22:00 - The complexities of GP angel collaboration
00:23:49 - Following On Potential and Portfolio Performance
00:25:50 - Promising Trajectory and Revenue Growth
00:27:54 - The Power of Small Funds
00:30:01 - Investing in Climate Tech
00:32:06 - Addressing Methane Leaks in the Energy Sector
00:34:13 - Y Combinator and the European Ecosystem
00:36:14 - The Success of Y Combinator and Portfolio Companies
00:38:12 - Investing in Africa's Impact Potential
00:40:16 - Portfolio Overview and Investment Focus
00:42:20 - The Importance of Structure and Tracking Investments
00:44:02 - Commitment to Diversity and Social Impact
00:46:02 - Reaching Out on LinkedIn

Investment Thesis & Strategy

Central to the investment thesis is climate tech solutions within the most polluting and emission-intensive sectors of our economy, thereby supporting innovations with significant Emission Reduction Potentials (ERP). However, by recognizing that we are not only facing a climate crisis caused by GHG emissions, but also increasingly acute challenges relating to biodiversity loss, waste generation, resource depletion, and plastic pollution, Satgana considers solutions going beyond carbon, some of which have received less investor interest to date despite offering significant opportunities for impact and scale.

As a result, fund performance is positively correlated with positive environmental impact, as this is central to the value proposition of all investments made and obviously an important aspect of our decision to partner with Satgana.

Building on the above, value alignment and personal connection are two fundamental aspects of Satgana’s DNA. In addition to capital, Satgana provides founders with operational support, access to potential customers and investors, and a long-term relationship significantly more far-reaching than what a mere transaction is capable of.  This sincere desire to connect with the founders does not only de-risk Satgana’s early-stage investments to a certain degree, by setting the founders up for future success, but also allows the team to join subsequent rounds on favorable terms, allowing for a win-win for all parties involved

As for investment strategy, Satgana is set on building a portfolio of 30 Climate Tech startups, with 13 investments already made and two more expected by the end of the year. The firm's current capital commitments allow for this regardless of the final fund size, targeted at €10m, with the variable being the ability to reinvest in follow-ons. As for the geographic focus, 25% of the fund is earmarked for African investments, reflecting the team’s strong ties to the continent. This strategy does not only have the potential to generate significant positive environmental and social impacts but it also provides the fund’s LPs with additional diversification and exposure to Africa’s rapidly increasing intellectual and financial potential.

The GP team

He’s the nicest guy I ever met.

Said one LP when I spoke to her about our potential future investment into Satgana. Obviously, you don’t make money just by being nice, but in an industry where reputation and network is central and in a vertical where the moral character of an individual carries even more weight than usual (however much of a platitude this sounds like) it does matter a lot. And it couldn’t be more true; Romain has an ability to shine right through any barrier and build a connection instantly. That said, let’s turn to the harder facts and look at the credentials of the partners individually.

Romain Diaz, General Partner

Romain Diaz is a former CEO and co-founder of Far Ventures, a pioneering venture studio in Africa with a current Multiple on Invested Capital (MOIC) of 12x and IRR of 50%. He previously was involved the early days of what became the first Unicorn in Africa, Jumia, and has also served as an advisor at Launch Africa Ventures and Antler France, and as a venture builder at Rocket Internet and Naspers Ventures. Romain has co-founded five companies and made ten early-stage investments. He holds a master's degree from EM Lyon Business School.

Anil Maguru, Partner

Anil Maguru is a former impact investor at Bold Rock Management, a family office with €1 billion+ in Assets under Management with a focus on impact VC funds and direct investments. He has made 40 investments in companies and funds, achieving a Multiple on Invested Capital (MOIC) of 3x. Anil is a French and Rwandan citizen, and holds a Master's degree in finance from EDHEC Business School and Imperial College London. He joined Satgana in 2020, starting as a Investment Manager, and through dedication and excellence, ascended to the role of Investment Director before reaching his way to the top rank of Partner in 2023.

The Satgana Collective

Complementing the core team is a very powerful and carry-aligned advisor and venture partner team counting multiple current and exited founders, seasoned impact investors such as Patricia Silva, Ryan Grant Little, Lubomila Jordanova, James Crowley, Philippe Audebert and Elsa Hermal to name a few. By building and designing Satgana as a collective, rather than a hierarchical team, of impact-driven, smart, and ambitious people sharing a common goal, Romain and Anil are setting the fund up for future success, attracting a wide range of competencies, backgrounds, and networks.

They are supported by top LPs who support on deal sourcing, due diligences and portfolio support, such as founders of Back Market, Tiller Systems, YouSign, Yespark, Chausson Partners, Bee Partners, Qotto, Launch Africa Ventures, Cullom Capital, 2X Global and more.

All in all, we believe that the Satgana collective are emerging leaders in the European climate venture space. With their personality, reputation, network and dedication to impact investing, we believe they are well-positioned to find, win and help the climate outlies of the future.

Track record

As always, hard numbers remain hard (to share). But we’ve got one central number that we can share which is the current MOIC (Multiple on Invested Capital) of Satgana at an outstanding MOIC of 4.2x. This encouraging figure is a result of portfolio companies successfully raising subsequent rounds at higher valuations inviting an impressive collection of co- and follow-on investors, such as Initialized Capital, Y Combinator, Salesforce Ventures, Collaborative Fund, Pale Blue Dot, Übermorgen, Village Global, Climentum, Antler, Unruly Capital, and an equally powerful collection of angels amongst whom are select Y Combinator Partners. Keeping in mind that Satgana specializes in getting into the super early pre-seed rounds, this early indicator of the team’s ability to identify rising stars when valuations are still modest is incredibly meaningful.

The Story Behind Satgana

Satgana, which in Sanskrit means “a good company” was born out of Romain’s growing realization and sense urgency of the existential threats that climate change inevitably imposes on all of us. The decision to build a climate-tech specific fund, supporting like-minded impact-driven entrepreneurs in Europe and Africa, was therefore Romain’s, and soon thereafter Anil’s, conviction that their extensive experience with traditional ventures could be used for good and applied on a grander scale to address climate change. Positioned as a pre-seed climate fund in Europe, Satgana was envisioned to fill gaps in the ecosystem and align with founders dedicated to this cause. As the regulatory landscape, investor preferences, customer demand, and a shift in talent, to name a few factors, are increasingly driving climate technologies and solutions to become the opportunity of the century, Satgana is a living testimony that capitalism can be used for good when leveraged by the right people.

A note on the journey to first close.

The journey to Satgana's first close is a narrative that resonates with the venture community's ethos: innovation, hustle, and a lean approach to big ambitions. As Romain shares in our conversation with him, he and the Satgana Collective, committed to the hustle, decided to launch with a €2 million first close, against the conventional norms that advocate for a higher threshold. As you would expect from an emerging fund we back at eu.vc, another tale of strategic agility and entrepreneurial boldness —a willingness to dare in venture capital just as one would in venture building. Committing to building a track record with a €2 million first close is a testament not only to the long term commitment, but also to a philosophy that transcends the mere financial metrics of venture capital. With modest management fees, the focus of the team is not on immediate financial gain but on the long-term performance of the fund from both a financial and impact perspective. This approach is indicative of a commitment that goes beyond the surface, aligning with the transformative values of their LPs and the founders they invest in.

To sum up, Romain & The Satgana Collective are currently crafting a path that marries financial acumen with an unwavering commitment to societal and environmental impact. Their blueprint is a unique amalgamation of venture capital expertise, entrepreneurial spirit, and a deep-seated desire to contribute to the global good—a narrative that resonates strongly in today's impact-driven investment landscape and with us at eu.vc - we’re proud to be backing Satgana for fund I and hopefully many more generations to come 🚀

The EUVC x Satgana Fit - Small is beautiful & the power of angel LP communities.

Embracing the philosophy that 'small is beautiful,' our investment in Satgana showcases the unique advantages of small funds in the venture capital landscape. With a size of just 10 million, Satgana exemplifies the agility and potential of smaller funds to surface promising opportunities quickly and early.

For angel investors like us at eu.vc, the size of Satgana's fund is not a constraint but an opportunity. It allows us to inject smaller, yet impactful investments fostering a close relationship with the fund and its management. What is more, even small-scaled exits in normal venture terms will be incredibly meaningful for a fund of just 10 M€. While not a fit for a big institutional that seeks to deploy large tickets with each investment, this approach aligns well with us and the profile of our investors who are very happy to see high multiples on relatively modest tickets.

Angel investor collaboration

But the concept of “small is beautiful” applies to so much more than just its impact on the return profile. Just as important is it that Satgana has a proven intent and ability to co-invest with their LPs. Both at alongside them and in SPVs. This resonates deeply with our commitment to nurturing strong community bonds and leveraging the collective expertise within the syndicate all while we’re all learning and becoming better investors on the journey.

What is more, we’ve known Romain for years now and throughout he’s delivered on high standards of transparency, always built faithfully towards a joint strategic partnership with us.

To shed a bit of light on our journey towards this investment, let’s look at how we assessed Satgana on three of our core fit-criteria.

Partnership Fit: We delved into the potential of our partnership with Satgana, analyzing how they could contribute to our ecosystem and we could to theirs. We seek General Partners (GPs) who not only understand the EUVC model but are also committed to our vision of becoming Europe's leading GP/LP community and deepening relationships between Europe’s venture investors.

Community Fit: Believing strongly in the power of community, we gauged the enthusiasm within our community for welcoming Satgana to the EUVC family. This included understanding the interests of our syndicate investors for the space and the fund strategy and team as well as ensuring our members were eager to affiliate with this new member, while also exploring opportunities for engaging them in our content flywheel.

Deal Fit: The final step involved conducting thorough due diligence, where we scrutinized Satgana's fund performance, seeking the potential for outlier returns, signs of a good path to successful exits, and a proven ability to create value for founders. This step is of course essential to ensure we invest in a firm that can generate the attractive returns we’re, in the end, in this game for.

With great marks on all criteria, our investment into Satgana marks a significant advancement in our mission to democratize access to high-potential venture investments and foster a collaborative ecosystem of investors, angels, and founders. In other words, we are incredibly excited about the future that our partnership with Satgana will bring.

For much more on how we think about our angel LP investments, check out this article 👇

Portfolio deep dive

Satgana's portfolio, comprising 13 startups chosen from a pool of >2,000, reflects a meticulous selection rate of just about 1 percent. The portfolio's construction is carefully balanced from a technological perspective, with approximately half focusing on hardware, about 25% on pure software, and the remainder a combination of both.

Geographically, the fund maintains a 75% focus on Europe and 25% on Africa, ensuring a broad scope of impact and opportunity - and remains aligned with our investment focus at eu.vc as Europe first investors. Sector-wise, Satgana's established portfolio matches the investment thesis, spanning across food, agriculture, mobility, industry, energy, circular economy, and the built environment, including water.

As said, Satgana aims to expand its portfolio to 30 companies over three years, preserving the spread across technology, geography, and sectors. But now, let’s get concrete and look at two portfolio companies in a little more detail.

Orbio Earth: Revolutionizing Methane Emission Monitoring

Orbio Earth, a company in Satgana's portfolio, stands out for its innovative approach to tackling a significant environmental challenge - methane emissions. The company's work is particularly crucial given the potency of methane as a greenhouse gas, which is about 80 times more powerful than CO2 in its first 20 years​​. Recognizing this, Orbio Earth has developed a sophisticated methane intelligence platform.

  1. Technology and Methodology: Orbio Earth's technology hinges on a physics-based analytics model that generates global methane emissions data using data from eight different satellites​​. The company then reconciles this data with other emission datasets to provide an aggregated benchmark of emissions. This approach sets Orbio Earth apart as it delivers data at high spatial resolutions, allowing emissions to be attributed to specific assets - a capability lacking in most methane-specific satellites today​​.

  2. Addressing a Data Challenge: The oil and gas sector, which significantly contributes to methane emissions, faces a considerable challenge in accurately measuring these emissions. Traditional methods, such as manual data surveys, are limited in scope and frequency, often missing large methane emission leaks, known as ‘super-emitters’​​. Orbio Earth’s platform addresses this gap by offering high-frequency, multi-scale methane emission quantification for any location on earth​​.

  3. Impact and Business Implications: Methane emissions pose not only environmental risks but also substantial business risks. Regulatory pressures are increasing, and unaccounted methane emissions can lead to significant drops in company valuations. For instance, Diversified Energy experienced a $300 million drop in share price after higher than reported methane emissions were discovered in its supply chain​​. By providing accurate, asset-level methane data, Orbio Earth enables companies to better manage regulatory compliance and shareholder expectations.

  4. Market Response and Growth Trajectory: Orbio Earth's participation in Y Combinator significantly boosted its growth, not just in terms of valuation and funding but also in revenue, which increased fourfold post-YC​​. This growth is attributed to both the Y Combinator's prestige and the effective groundwork laid by Orbio Earth, including mentoring and strategic support.

Orbio Earth's innovation lies in its ability to leverage existing satellite infrastructure to provide actionable intelligence on methane emissions, a crucial factor in mitigating climate change. Their approach exemplifies how addressing environmental challenges can align with solid business growth, demonstrating Satgana's strategic acumen in identifying companies with impactful missions and robust business models and ability to spot, pick and win access to deals that are later picked up by the best of the best - in this case: Y Combinator.

Kubik: Building Sustainability with Innovative Construction

Kubik, a standout in Satgana's portfolio, is revolutionizing the construction industry with its unique approach to sustainability. Based in Ethiopia, Kubik is addressing three critical challenges - waste management, environmental pollution, and the need for affordable housing - by turning plastic waste into low-carbon, low-cost buildings in emerging markets​​​​.

  1. Innovative Technology and Mission: Kubik's technology transforms plastic waste into building materials, contributing to carbon and plastic footprint reduction. This initiative aligns with Satgana's focus on impactful and environmentally conscious investments​​. Kubik's vision extends beyond just construction, aiming to eradicate plastic from the environment and tackle climate change​​.

  2. Addressing Urbanization and Environmental Challenges: With African cities rapidly urbanizing, the environmental impact is substantial, including a massive increase in plastic waste and carbon footprint. Kubik is positioned to address these challenges directly, as the continent produces over 70 million tons of unmanaged plastic waste annually, contributing significantly to urban pollution and health issues​​​​.

  3. Market Growth and Recognition: Kubik has gained significant recognition for its innovative approach. The company was named Startup of the Year at the 2023 Global Startup Awards and the 2022 African Startup Awards, highlighting its impact in the climate tech space​​​​. Kubik was also featured in the prestigious Yale Africa Startup Review 2023 list, underscoring its potential and influence in the African market​​.

  4. Financial Growth and Expansion: Demonstrating robust financial growth, Kubik closed a $3.34 million seed round to scale production in Ethiopia. This investment will enable Kubik to expand its operations and increase its impact significantly​​. Moreover, Kubik has secured a crucial agreement with the Industrial Parks Development Corporation in Ethiopia to start production in Adama Industrial Park, a significant step towards expanding its reach and operational capacity​​.

  5. Sustainable Construction Solutions: Kubik's efforts have been featured in various media outlets, including TechCrunch and CNBC Africa, showcasing its commitment to providing cost-effective and green solutions for sustainable construction​​​​.

In conclusion, Kubik exemplifies the transformative potential in the intersection of environmental sustainability, technology, and social impact. Their innovative approach to converting plastic waste into sustainable building materials addresses critical global challenges and aligns perfectly with Satgana's mission of impactful investment. The recognition and financial support Kubik has garnered are testaments to its promising future and significant role in shaping sustainable urban development. As this dynamic company continues to grow and expand its reach, it stands as a beacon of hope and a model for eco-friendly innovation in the construction industry.

A high-level note on some of their other promising portfolio companies:

  • Fullsoon (France): Leveraging AI to help restaurants reduce food waste

  • Brineworks (The Netherlands): Extracting precious minerals from desalination brine while enabling carbon removal at scale

  • Arda Bio (UK): Removing the cow from the production of leather while giving a second life to brewers’ waste streams

  • Onima (France): Producing a sustainable alternative protein from beer yeast with a circular model

  • Fermify (Austria): Removing the cow from the production of cheese with precision fermentation

  • Loewi (France): Accelerating the transition to electric bicycles with a full-stack refurbishment platform

  • Revivo (Kenya): A pioneering electronics repair & circular economy platform for Africa

  • And more…

A final nod to Satgana for running a tight ship

Before closing this off, we want to give a nod to Romain and team’s impressive standards when it comes to giving LPs a great experience, despite being a small fund.

  1. Institutional-Grade Practices: Despite being a small, emerging fund, Satgana exhibits an unexpectedly structured approach. Their portfolio is not just organized but tracked rigorously, ensuring that they can effectively report to their LPs and continuously evaluate their investment strategy. This level of detail extends to their data room, which impresses with its institutional-grade quality, a rarity in the realm of small funds.

  2. Impact reporting: Satgana's dedication to creating tangible impact is evident in their status as an Article 9 fund within the SFDR framework, emphasizing their focus on sustainable investments. They go a step further in their commitment to impact by pursuing B Corp certification, a rigorous process that validates a company's commitment to social and environmental performance. Kudos to that.

  3. Diversity and Representation: Satgana is deeply committed to diversity and inclusion, with a significant portion of their portfolio (about 43%) comprised of investments in underrepresented minorities. This commitment to diversity is not just a token gesture but a core part of their investment ethos and something they track and communicate clearly.

This approach comforts us as LPs, not only in that we know the ship is well captained, but also that Satgana's operating with a long-term vision and strategically planning for the future. In essence, Satgana's approach as a small fund is a model for how emerging funds can operate with the sophistication and strategic foresight typically associated with larger, more established institutions.

Adding to this their commitment to impact, combined with their meticulous and structured approach, we believe they’re well-positioned as a forward-thinking player in the future of European venture 💪 and we’re proud to be backing them.

We're determined to create a community for investors tapping into the vast potential of Europe. LP investments underpin our approach, offering access to European tech at scale. We double down on the winners by co-investing and following-on into successful startups. 🚀🌟

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