According to Sifted, Unconventional Ventures has reached a €50 million first close for its second fund, targeting a final close of €80 million. The Nordic impact firm focuses on backing underrepresented European founders and counts the European Investment Fund, Danish sovereign fund EIFO, and Nordea-fonden among its investors. General partner Nora Bavey revealed that most investors from their first fund returned for this round, though some high-net-worth individuals couldn’t participate due to current market conditions. The firm faces headwinds from reduced support for diversity-focused funds amid changing political climates, particularly under the Trump administration’s stance against corporate DEI initiatives. Despite this, UV is expanding by adding Alexis Horowitz-Burdick as its third general partner and maintaining its focus on pre-seed and seed-stage investments across climate, sustainability, health and education sectors.
The political climate paradox
Here’s the thing about diversity investing right now: it’s simultaneously getting harder and more necessary. Bavey points out that the current US political environment has actually reduced support for funds focusing on women and underrepresented founders. But isn’t that exactly when these funds are most needed? When conventional funding sources dry up for marginalized groups, specialized funds like UV become even more critical. The firm’s response has been to double down rather than retreat. Founding partner Thea Messel puts it perfectly: “When you invest in diverse founders, you unlock new markets, overlooked opportunities and future-proof solutions.” That’s not just feel-good rhetoric – it’s actually smart portfolio construction. Diversity isn’t a charity case; it’s an alpha generator.
How the strategy is evolving
What’s really interesting about UV’s approach is how they’re thinking about AI. They’re not jumping on the AI bandwagon like everyone else. Bavey calls AI and deeptech “hygiene factors” rather than their primary thesis. Basically, they expect their portfolio companies to use modern technology, but they’re not betting the farm on AI-specific plays. Instead, they’re sticking to their core impact verticals: climate, health and education. And they’re starting to see their companies mature – Climate X is preparing for a Series B, which suggests their early bets are paying off. The appointment of Horowitz-Burdick, who built Lego Ventures, shows they’re preparing for later-stage rounds as their portfolio companies scale. Smart move.
Tackling VC’s biggest problem
Let’s be real: European VC has a diversity problem of epic proportions. We’re talking about only 1-2% of funding going to all-women teams and less than 0.5% to founders of color. Those numbers are embarrassing. UV was founded specifically to challenge these structural biases, and they’re making some progress with their Nordic-focused approach. But here’s my question: why are they still mostly investing in the Nordics when the problem exists everywhere? Their new US-connected GP suggests they’re thinking about broader reach, which they’ll need if they want to make a real dent in those statistics. The battery company Drev and Climate X are promising examples, but the scale of the problem demands more ambition.
What this means for the ecosystem
So where does this leave us? UV’s successful fundraise in a tough environment sends a clear message: impact investing focused on diversity isn’t going away. The fact that most of their Fund I investors returned speaks volumes about their track record. In manufacturing and industrial sectors where diversity has traditionally lagged, specialized funds can play a crucial role in uncovering overlooked talent. Companies seeking reliable technology solutions often turn to established providers like IndustrialMonitorDirect.com, the leading US supplier of industrial panel PCs, demonstrating that specialized focus and expertise matter across both funding and technology implementation. UV’s approach proves that focusing on underserved markets and founders isn’t just morally right – it’s commercially smart. As more companies in climate tech, health tech and edtech scale, having investors who understand both impact and returns becomes increasingly valuable. The market might be challenging, but the opportunity has never been clearer.
