US venture capital firm Regeneration.VC, backed by Leonardo DiCaprio, has moved a founding partner to Europe and is raising its second fund.
Michael Smith, a general partner at LA-headquartered Regeneration.VC, moved his family to Amsterdam, the Netherlands, in August. He is the latest in a long line of US investors moving to the continent; others include Sequoia, Lightspeed Ventures, and IVP.
Regeneration.VC is also raising its second fund. Smith declined to comment further on the fundraise due to marketing rules.
Smith set up Regeneration.VC in 2020 to back seed and Series A stage companies in what he dubbed “consumer climate technology.” It wants to make the hardware and software used in consumer industries more sustainable, from supply chain and logistics to the physical materials and dyes used to make products.
“That has been a thesis that really has resonated with European founders and investors in particular,” Smith told Insider. “For our first fund, we had investors and then companies in our portfolio in Europe. Managing that from the US was proving to be a little bit tricky. Putting and committing to having a team on the ground here … is now giving us proximity to our existing companies to finding new ones.”
The nine-strong team writes tickets of up to $3 million out of its inaugural $45 million fund, depending on the startup’s stage. Regeneration.VC has both participated in and led deals in the circular economy, resource efficiency, emissions reductions, and material waste spaces.
The partner said European limited partners, which invest in VC funds, have a greater understanding of and appetite for the circular economy which refers to the reuse, sharing, and recycling of products and resources where possible, to ultimately avoid waste.
An associate also recently moved to Denmark, where Regeneration.VC brought on consumer expert Tue Mantoni as a special advisor. The firm also has teams in New York and New Zealand.
Around one third of Regeneration.VC’s first fund has gone to European companies so far, Smith said. The firm counts the likes of AI recycling company Greyparrot and microplastics startup Matter among its portfolio, which are both UK-based.
Smith is interested in the Nordics and in the Netherlands, with the latter being a hub for the circular economy, he said. Regeneration.VC recently announced a partnership with Dutch organization Circle Economy Foundation, which will source deals for the fund and provide portfolio impact measurements. Regeneration.VC also helps its portfolio scale through relationships with strategic corporations.
The European push is part of a wider trans-Atlantic approach to investing to help companies cross the pond, no matter what side they are on, Smith said.
They have different offerings: President Biden’s $369 billion Inflation Reduction Act (IRA) is stuffed with subsidies, tax credits, and rebates for climate hardware and infrastructure while Europe has mandated scope three emissions accounting, which are those from a company’s value chain; introduced anti-greenwashing laws; and reformed extended producer responsibility, which makes manufacturers responsible for the waste their products create.
Europe’s efforts are beginning to be mirrored by California and New York, Smith said. The bloc’s headstart means its startups could establish themselves as US market leaders, he added.
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