The Sustainability Landscape 2022 — Mapping Innovation For The Decade Ahead

A comprehensive overview of the Sustainability Ecosystem to highlight where we are and to inspire future projects and collaborations, including a deep dive into the state of startup innovation within “Manufacturing & Industry”.

In 2021, we set up the first Sustainability Landscape for the DACH startup ecosystem. For the 2022 edition we have expanded our horizon to highlight the most exciting Sustainability-related European startups. Furthermore, we have enriched the landscape to provide a more holistic view of our ecosystem. Some of our findings:

• We have included deep dives into each sector including sub-categories for each vertical for a clearer and more comprehensive overview.
• Not every sub-category offers the same potential to startups. The ones with the highest potential for startups are shown in the landscape.
• Time is of the essence and this is the first Sustainability Landscape to take that into account. We want to back industry-changing companies and in the deep dives you can find our take on when different technologies will make it to the top.
• “Construction & Real Estate”, “Manufacturing & Industry” and “Remediation” are the verticals that have seen the least investment so far in relation to the necessary emission reduction still ahead.
• “Manufacturing & Industry” count as a “hard to abate” vertical. We see great short-term and moonshot ideas with industry-defining potential as well as untapped areas ready to be tackled.

The Initiative

Working alongside five other leading VCs (Acton, Planet A, Plug & Play, Speedinvest and UVC Partners), Ananda has joined forces with the Climate Club of the CDTM to create this unique sustainability guide and index outlining what we believe are the most promising areas for investment over the next decade, and highlighting some of the outstanding start-ups working on breakthrough solutions in these areas.

Based on the European Green Deal, we have mapped out seven sustainability verticals and then identified sub-categories in which we expect innovative services and solutions to be developed, in the short-term, mid-term or ‘moonshot’ time period (5–10 years).

For us, this short- to long-term timeline approach is critical when looking at ClimateTech. It is also a landscape feature that has not been done before. With time ticking away to bring down global CO2 emissions and mitigate the effects of the climate crisis, it is crucial that action is taken in the present as well as in the years ahead. That’s why both scalable, short-term solutions and moonshot opportunities with the potential to disrupt an industry’s paradigm are equally important.

The Sustainability Landscape 2022 identifies relevant European start-ups in each vertical that we believe have the potential to deliver significant impact and which we are excited to follow — and potentially invest in — as they develop.

The seven sustainability verticals are further clustered into sub-categories to provide a comprehensive and clear overview of the areas from which we expect the most impact and business potential.

You can access the Sustainability Landscape 2022 here.

A deep dive into “Manufacturing & Industry”

Ananda has been particularly involved in the vertical of Manufacturing and Industry. This task was as challenging as it was fun and insightful. Manufacturing and Industry counts as the ‘hard to abate’ sector. 30% of global emissions are generated in this area and unlike other sectors, the road to decarbonization is less clear. Production is always energy intensive and specific processes in steel, aluminum and chemical products cannot easily be switched to renewable energy due to the necessary heat needed in the processes.

Alongside this, the sector poses additional challenges for startups and investors. In a lot of areas, hardware solutions are needed, which are typically more expensive in their development and testing as well as very CAPEX-intensive and thus less scalable. In addition, Manufacturing and Industry is dominated by huge corporates (see CAPEX again) which might make it harder for startups to get a foot in the door in these areas. As a result, investments in this area have not reached the scale as in other verticals, such as mobility.

As the emissions need to come down in this sector in the next decades, there will be impact-driven entrepreneurs who will build solutions that matter. And the market momentum is on their side: investment in Industry went up by 650% in Europe, reaching an investment value of EUR 6 bn.

We are excited about the challenge and the opportunity that comes with it. Therefore, we loved to find incredibly talented teams working in this area. Especially within the sub-categories of digitization, Product-as-a-Service and Green Chemistry and Synthetic Biology we expect startups to make a dent (read more here).

Inspiration for investors and future founders

Ananda is also proud to highlight some of its own innovative portfolio companies within the Sustainability Landscape 2022 — for example, OroraTech and Klim in the Food, Agriculture and Forestry vertical, Resourcify in Water & Waste, and EcoG in Mobility & Transport.

While we include no definitive predictions, the value of the Sustainability Landscape is to create a relatively comprehensive picture of what might be possible over the next decade.

Building on the great response we got to last year’s Sustainability Landscape, we hope that the 2022 edition will continue to provide inspiration and guidance to entrepreneurs, founders and investors around Europe, starting conversations and accelerating the development of more projects and collaborations going forward.

To tackle the huge sustainability challenge, it’s vital to keep bringing together as many stakeholders, experts and innovators as possible. Collaborating at all levels and sharing both skills and data is an essential way of multiplying the impact we can deliver.

That is why we intend to produce a new Sustainability Landscape every year, to act as a forum for the sharing of knowledge and ideas, and to stimulate action, from increased investment to solution development.

Finally, please bear in mind that our findings and conclusions are inevitably subjective. We know there are many more great impact-driven innovators out there who have not been mentioned. Feel free to give us a heads-up on the ones we’re missing! We are always happy to learn about each exciting innovation!

If you want to be part of the long list (and potentially be highlighted in our Sustainability Landscape 2023), please click here.

P.S. Have you wondered about the different bubble sizes in our landscape? Due to his background in Economics, Felix loves this feature of the map which is comparable to a decreasing marginal utility function: The size for each vertical is derived from the climate impact we have yet to achieve to reach Net Zero divided by the investments made per sector over the last 8 years. This can be seen as an indicator of the marginal impact per dollar invested across each sector: the more money already invested, the lower the climate impact per newly invested dollar.

In short, bigger bubble sizes mean either that the reduction potential is still massive in absolute terms OR is an indicator that you get more ‘bang for your buck’. So future entrepreneurs and investors, look out for the bigger bubbles. This is where we need you most.

Special thanks to:

• Tom Rentschler (Acton)
• Sophia Escheu, Pal Habsburg-Lothringen (Speedinvest)
• Carolin Wais, Philipp Hodl Hofheinz (Plug and Play)
• Jana Petry, Lisa Liu, Nicolas Klein (UVC Partners)
• Florian Schabus (Planet A)
• Lisa Mangertseder, Nejira Hadzalic, Max Prokopp (CDTM)

By Felix Ferstl, Investment Manager @ Ananda Impact Ventures