Icos Capital is currently investing from its third fund under management, ICF III, in partnership with Nouryon, Bühler and Cosun. This fund focuses on strong innovative propositions in the scale up phase (series A, B, C) in the Agro-Food and Chemical sectors, run by professional entrepreneurial teams. The two main themes of the fund are sustainability and digitization.
ICF III invests in propositions that “do better and/or more with less” for growing numbers of consumers world- wide, with increasing demand for the best customer experience going hand in hand with these products & services produced and delivered in a responsible manner.
The global market for sustainability / low carbon and environmentally friendly goods and services is estimated at €4.2 trillion. EU companies’ market share is 21% according to UK Department for Business, Innovations and Skills, 2012. Sustainability markets are fast growing, driven by consumer and regulators. Top tier corporations are exploiting this theme to differentiate their products & services.
Accountability is another key ingredient in the Fund strategy. It is about digital tools & services that deliver intelligence to improving sustainability and increasing customer involvement and experience.
Icos Capital invests in scaleup phase. For us, scaleup is a phase of exponential growth and market development through venture investment and collaboration with established corporations that bring the required scale to succeed.
Icos Investment Rules
Investing in cleantech start-up requires careful evaluation of the opportunity from different perspective and follows a structured process led by the team at Icos capital with valuable contribution from corporate partners. We also seek to invest in companies that adhere to the following rules:
1. Sustainable competitive advantage (IP, assets, contracts): Pioneering companies have value in the market because of the strong competitive barrier established with patents, contracts or substantial assets. This is what Warren Buffet calls ‘Enduring moat’ that does not need to be constantly reinvented.
2. Strong technology & industry team (know your customer not just technology): The management of the start-ups must represent exceptional insight in the industry targeted and not just technology.
3. Compelling solutions in existing global markets and for known problems: The Fund will focus on start-ups that target existing global markets and known problems. We believe, the probability of success being higher if customers are desperately looking for a solution (market pull) rather than a technology looking to find a problem or trying to push improvements.
4. Compelling financial business case with high margins and strong EBITDA: High margins and strong EBITDA potential are indications of strong company profile and leading signals for higher value to potential buyers.