Iran war is already being felt in this energy VC’s portfolio: ‘A record amount of interest’

Clean energy startups are already seeing increased demand as a result of the Iran crisis, according to SET Ventures, one of Europe’s largest energy-focused venture capital firms.

Galvany, a German heat pump startup in the fund’s portfolio, has seen both lead volumes and conversion speed improve sharply over the past four to six weeks, according to the firm's partner Till Stenzel. He measures the latter by “first time touch conversion” – how many customer visits before a contract is signed.

E-MOBILIO, another German startup which builds electric vehicle fleets for corporates, has seen similar results.

“Both in terms of the amount of leads they’ve generated throughout March and also the speed of conversion – they had a record amount of [sort of] interest and uptake now with corporates that try to electrify the car fleets,” Stenzel tells Impact Loop over a video call from Hamburg.

Energy shocks have a habit of doing this, Stenzel points out. Every time oil prices spike or supply routes tighten, the economic case for clean alternatives sharpens in ways that green credentials alone never quite managed.

Stenzel says the pattern is becoming harder to ignore.

“It feels like every few years something will happen. We just don’t know what,” he says. “And so people start to pay attention to this and think about okay how can we become less vulnerable and take things into their own hands.”

Europe’s clean energy buildout carries its own dependency question, though.

Dependency on China

As the continent rolls out solar, batteries, and smart grid infrastructure, it is doing so largely on Chinese hardware – a dynamic that has prompted growing unease in policy and investment circles.

Stenzel is not especially worried. “What China mostly delivers is hardware,” Stenzel says. “No one would say today the internet is unreliable because we depend on Cisco building routers.”

The real control, he argues, sits in the software layer – the microgrid operating systems, flexibility platforms, and grid management tools being built by European startups.

He also argues that hardware doesn’t get consumed in the same way oil does. A ban on Chinese panel exports tomorrow wouldn’t switch off a single panel already installed on the continent.

SET Ventures, which closed its fourth fund at €200m in late 2024, has built its portfolio around the thesis that energy software will be the arena where Europe will win.

Where SET is looking to invest next

Stenzel is currently watching cybersecurity closely, saying the fund has a term sheet outstanding on a Dutch company working at what he calls “the IT to OT” – IT to operating technology – interface. The deal is not yet closed.

The grid itself remains a key focal point as well. Germany alone has over 800 grid operators, and Stenzel says many are “effectively flying blind – they don’t know what happens in real time on their grid.”

SET Ventures plans around five investments from its current fund this year. With two announced and one term sheet live, that leaves room for two more.