Eindhoven-based LUMO Labs, a Dutch fund manager that runs an impact-focused investment fund in emerging technologies, announced on Tuesday the launch of a new €100 million fund, the LUMO Rise Fund.
Through the fund, the Dutch VC aims to invest in 30-35 European impact-driven start-ups focused on the development and application of emerging digital technologies for a greener and more resilient society.
The LUMO Rise Fund expands LUMO Labs’ investment strategy to focus on the integration of physical and digital reality in society.
It provides additional capital for geographic diversification and additional lending, enhancing financial, social and environmental returns on investment.
Startup selection criteria
In an exclusive interview with Silicon Canals, LUMO Labs founding partner Andy Luling explained the criteria for selecting startups: “First, we look at whether a startup aligns with our technology focus areas and SDG focus areas. We evaluate whether the startup is using digital technology to address a key problem related to one of our four priority UN SDGs,” he said.
“Furthermore, we consider the team, stage of technology, potential market, and whether the business model is aligned with positive impact. We also take into account the coaching capabilities of the founders as we offer coaching programs to support startups. Since we invest in European startups, the headquarters should be in Europe,” he added.
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The LUMO Rise Fund will invest capital in startups developing cutting-edge digital solutions to address the following pressing challenges:
Good health and well-being (SDG 3) Quality education (SDG 4) Sustainable cities and towns (SDG 11) Climate action (SDG 13) Digital security
Focus on emerging technologies
The fund will also focus on emerging digital technologies, which are essential to achieving the United Nations’ Sustainable Development Goals.
These technologies include the Internet of Things, virtual and augmented reality, blockchain, and deep tech artificial intelligence, which will enable information to be processed and evaluated like never before.
According to the Dutch VC, these technologies are crucial to addressing current social, economic and environmental challenges.
Dagmar van Ravenswaay Claasen, Senior Partner at LUMO Labs, said: “Our investments should not only be financially beneficial but also contribute to our specific sustainable development goals. Right from the initial contact and screening stage before investing, we pay close attention to the startups’ impact propositions and provide ongoing support to ensure that our investments are aligned with our impact-focused orientation.”
Maximizing economic value creation
Founders of startups that receive investment from LUMO Labs will enroll in the LUMO coaching program, which includes third-party experts and experienced entrepreneurs to maximize economic value creation in line with the fund’s impact goals.
On measuring the social and environmental impact of investments, Lülling said: “Prior to investing, we ask founders to share their impact statement with us. Based on the impact statement, we define quantifiable Key Value Indicators (KVIs) together with the founders. These KVIs are monitored and measured over time.”
Expanding your horizons
With the launch of the new fund, the investment team is now actively searching for investable startups from countries outside the Netherlands, Belgium and Germany, such as Scandinavia, the Baltic States, Spain and Portugal.
Addressing the challenges of geographic diversification, Lürling acknowledges, “Cultural differences and access to the best deals. We have been researching these markets and actively going to these markets to network and gain insights over the last four years. On top of that, we will also have a venture partner there who is a local representative. We will be announcing new team members in September.”
The role of local experts in regional diversification strategies
Luling said LUMO Labs has been actively collecting pitch decks from different parts of Europe over the past few years, conducting research to identify the best quality decks that match its investment focus.
“Local experts reach out to ecosystem players in each hub and participate in events to help ensure the best deal flow. They also know the culture and can support certain aspects of ‘cultural translation,'” Lürling explains.
According to him, LUMO Labs is actively working with local development agencies to understand how it can support them while clearly outlining their requirements.
“We have always valued building strong relationships with a strong understanding of each other’s needs and wants. Over time, this leads to the best results in collaboration, deal flow and support for our portfolio companies,” he adds.
The fund has already secured funding from financial institutions, family offices and high net worth individuals from the Netherlands and other European countries, as well as from Dutch regional development agencies.
In its first fund, LUMO Labs invested in 23 impact-driven technology and digital deep-tech startups, including Alphabeats, Aiosyn, Autoscriber, chunkx, Enliven, Healthpus.ai, and Hulo.
Future trends in emerging digital technologies
According to Rühring, AI can contribute to accelerating the identification of sustainable solutions to achieve the UN’s SDG goals, creating a positive impact on society and the environment.
“I believe that we, as a society, should do a better job of investigating what technologies can contribute to solving social and environmental challenges within a given time frame (point of no return/point of no return) and at least allocate public funding accordingly,” Rühring concludes.
LUMO Labs: Focus on impact-driven startups
Founded by Andy Lürling and Sven Bakkes, LUMO Labs focuses on impact-driven software and smart hardware startups.
LUMO Labs will fund startups that align with at least one of the three UN Sustainable Development Goals: sustainable cities and communities, good health and well-being, and quality education.
The fund’s investment interests include artificial intelligence/data, blockchain, Internet of Things, robotics and drones, and virtual reality/augmented reality.
Last December, experienced investors Dagmar van Ravenswaay Claasen and Sabine Schoorl were announced as senior partners at LUMO Labs in association with the LUMO Rise Fund.
They will bring expertise in climate action, sustainable cities and communities to the fund’s portfolio and will also play a key role in the impact and DEI (diversity, equity and inclusion) strategies of portfolio companies.
Thomas Hannes, currently Investment Director at LUMO Labs, will also join as a partner.
