And as the venture capital world knows, everybody loves a good disruption. In truth, it’s not all that exciting. In the past 10 years, we have mostly experienced disruptive innovations that reordered existing industries as opposed to supercharging the complete rebuilding of them. Think about it: ride-sharing, food delivery, social media – all impactful, sure, but not exactly addressing the existential threats facing humanity. KOMPAS VC’s €150 million Fund II is riding in to shake things up. In doing so, it’s making some pretty big and very necessary moves to start disrupting and changing the venture capital landscape.

Industrial Tech Is The Future

We've all seen the headlines: VC funding to traditional tech sectors is slowing. European VC fundraising has had a slow start in 2024. In Q1, it launched €2.3 billion over 24 funds, accounting for 11% of global VC, down from 16% year-over-year. Evaporated are the low interest rates of the last decade. Today, investors are looking for more than a pretty app and a classic hockey-stick shaped growth curve. They want impact. And that's precisely what industrial technology offers.

KOMPAS VC gets this. They’re not just going after the next social media fad. They're investing in companies like Prewave, which uses AI to manage supply chain risk, and Makersite, which optimizes product design with AI. These aren’t just flashy incremental improvements, they’re game-changing foundational technologies capable of completely remaking whole industries.

Because the challenges before the industrial sector are gargantuan. It’s not just transportation — manufacturing and the built environment play a huge role in carbon emissions. To address this growing crisis, they need to be more effective and resilient. KOMPAS VC plans to ultimately invest in 20 to 25 startups. These startups will present incredible new solutions that make industries more efficient, decarbonized, and resilient. This isn’t only about increasing their bottom line, it’s about creating a healthier and more sustainable future. More and more, that’s where the smart money is heading.

Europe's Play to Regain Industrial Leadership

Let's be blunt: Europe has lost ground in the tech race to the US and China. Industrial technology could be Europe’s opportunity to retake the initiative. Why? That’s in part because Europe is already fertile ground for such an industrial base to take root. The firm’s partners—Sebastian Peck, Talia Rafaeli, and Andreas Winter-Extra—are loaded with experience. Collectively, they have all previously led innovation and venture efforts at largest European Original Equipment Manufacturers (OEM).

Think about Germany's manufacturing prowess, the Netherlands' logistics expertise, and the Nordic countries' commitment to sustainability. These are all unique assets that the city can leverage to build a thriving, diverse industrial tech ecosystem. With their current staff spanning across Amsterdam, Barcelona, Berlin, and Copenhagen, KOMPAS VC is uniquely suited to leverage this untapped potential.

This isn’t just about Europe’s economic future – it’s about Europe’s strategic autonomy too. As the geopolitical landscape becomes more unstable, controlling the key industrial technologies will be key to success and survival. It's about ensuring that Europe can produce the goods it needs, protect its supply chains, and compete effectively on the global stage. Just sayin’ It’s really all about resilience, and resilience is the new black. You’ll start to see more and more investors looking at that first versus growth at all costs.

The Rise of Real-World Impact Investing

For years, “impact investing” felt like a catchphrase. Though investors were optimistic, they were still in the mode of chasing high returns at all costs. KOMPAS VC's Fund II signals something different: a commitment to real-world impact, driven by hard-nosed business logic.

Fund II, like its predecessor, is committed to investing in hardware and software solutions. These investments are intended to accelerate the transition to net zero, address disproportionate levels of pollution, and reverse biodiversity loss. This isn’t just a matter of awarding some feel-good projects. It’s about creating enormous companies that solve the most important issues in the world today but turn billion dollar profits. The truth is, the market is forcing these solutions out. Cities and states are passing local and state laws to cut emissions and stop fossil fuel projects. Consumers are increasingly demanding eco-friendly products. Companies are beginning to understand that if they want to be successful in a volatile world, they should do the prudent thing and invest in resilience.

This move toward impact investing geared towards the real world is more than a temporary fad. It’s an institutional transformation in how investors are beginning to understand risk-return narrative. It’s the acknowledgment that you can find the largest opportunities in the largest challenges to humanity. And that, my friends, is a power shift that merits every one of your dollars. Are you paying attention? For, if you don’t, you’ll only find yourself in the proverbial doghouse.

KOMPAS VC’s second fund, Fund II, isn’t your typical VC fund. It's a sign of things to come. The balance of power in venture capital is changing. Now, it’s up to the intrepid, ambitious souls willing to take on the hard problems, create out-of-the-box solutions and build a more sustainable tomorrow. And that’s a change we should all be happy about.