Geothermal might be Europe's most overlooked energy security play – and these 6 investors know it

Geothermal energy from the Earth’s core could technically meet all of humanity’s electricity needs 150 times over.

Yet, in Europe geothermal only supplies 0.2% of Europe’s electricity and 0.7% of its heat. That’s a tiny slice compared to wind and solar.

Most experts agree that the greatest limiting factor is cost. Geothermal is simply not competitive in most regions, save for a few places on Earth where heat bubbles near the surface, such as Iceland or New Zealand.

But a new crop of startups is emerging with new tech that promises to rejig the economics. And as Europe pushes for energy security, VCs are increasingly seeing the potential.

“Geothermal is ideal from an energy sovereignty perspective,” Torsten Kolind, founding partner at Underground Ventures, Europe’s only dedicated geothermal investment firm, tells Impact Loop. “It’s local, clean, and it’s not rocket science…it doesn’t require many specialised materials – we don’t need plutonium or chips.”

Europe has been tapping geothermal energy for over a century – the world’s first geothermal power plant was built in Italy in 1911. The continent also has deep expertise in drilling; skills largely developed from the oil and gas industry.

“Europe’s really good at drilling,” says Kolind.

For VCs, the market is still relatively small, but it’s developing at pace – investment in the sector reached $793m in 2025, its highest value ever, according to Dealroom data. The emerging industry even has a unicorn: US-based Fervo Energy, backed by investors including Bill Gates and Jeff Bezos.

While Fervo, and two other North American companies, Eavor and Vulcan Energy, have captured the bulk of geothermal VC money, Europe is catching up, with several players attracting sizeable funding in recent years – from a growing pool of investors.

Kolind believes that Europe has a “number of opportunities” to create for “Europe-led champions.” He also thinks there's a lot of potential for companies to specialise in high-tech equipment for geothermal projects, and then exit via M&A to larger project developers like Fervo.

Either way, with Europe pushing for energy security, geothermal energy is ideally placed to grow – and we’ve unearthed the VCs and family offices leading to a way in funding Europe's budding geothermal tech ecosystem.

Here are the main players so far – and who they’re backing.

Underground Ventures

Europe's only dedicated geothermal VC with a $40m fund. Underground Ventures is anchored by a single LP: Joachim Ante, the German co-founder of gaming giant Unity, which IPO-ed at a $13.7bn valuation in 2020 in a deal which, safe to say, made him quite wealthy.

Ante co-founded Underground Ventures alongside Kolind, a Dane and Silicon Valley founder, in 2024.

The VC writes $250k-$5m cheques mainly into startups developing drilling tech and reservoir development located in the US and Europe.

The firm has made 5 investments so far, including in Slovakia’s GA Drilling (Slovakia), Hephae Energy Technology (US), and Borobotics (Switzerland).

Baseload Capital

Not your typical VC – Baseload Capital is more of an investment platform that builds and operates geothermal plants on behalf of its investors.

The Swedish firm has raised around €162m from heavy hitters, including from Bill Gates' Breakthrough Energy Ventures, IKEA's investment arm Ingka Investments, energy technology firm Baker Hughes, and Google’s parent company Alphabet.

Baseload Capital channels most of its money into projects developed by its subsidiary Baseload Power, which runs projects across Iceland, Japan, Taiwan, and the US.

Project A

Berlin-based Project A is well-known for making software bets, but it has increasingly shifted to backing disruptive deep tech and energy tech.

In August, Project A led a €5.5m pre‑seed for Hades Mining, a Munich-based startup developing “superheated” drilling tech to access ultra‑deep geothermal energy and critical minerals.

Max Werner, Hades’ co-founder and CEO, told Impact Loop at the time that early tests show its “non-contact, superheated” approach could make drilling 5-10 times faster. That would make geothermal projects a lot more viable in an industry where drilling can account for up to 50% of the upfront development costs.

Jack Wang, Partner at Project A, who led the deal, said he believes Hades’ tech was a significant bet on Europe's energy resilience. “It’s a decisive step towards the resilience our continent needs,” Wang said. “Energy is the next sovereign frontier.”

At One Ventures

At One Ventures is a Silicon Valley-based climate VC co-founded by Tom Chi (former Google X) and Laurie Menoud (ex-BASF Venture Capital), which backs deeptech with "disruptive economics" across materials, energy, and industrial sectors.

In September, At One led a $9.1m seed investment in Factor2Energy, a German spinout from Siemens Energy that uses CO2 instead of water in geothermal systems – which it claims produces twice as much power from the same borehole (hence the name).

SHIFT Invest

Amsterdam-based SHIFT Invest is one of the principle backers of Canopus Drilling, a Dutch startup founded by former oil execs that is developing drilling tech to cut geothermal well costs.

SHIFT led Canopus’ €2.6m seed round in 2022, and invested again in a follow-on round of €3m, alongside ENERGIIQ and Underground Ventures.

With deep expertise in oil and gas, the Netherlands is becoming a hot spot for geothermal development and research, especially arising from the world known Delft University of Technology.

Equinor Ventures

The corporate VC arm of Norwegian energy giant Equinor now holds a 24% stake in Lithium de France, backing the company since 2021 across three fundings rounds equating to over $100m.

Like Hades Mining, Lithium de France runs a dual mining/energy play: extracting lithium from geothermal brines in France's Rhine Graben while producing zero-carbon heat.