Guest comment: why investors need to watch for the emergence of Europe’s ‘green unicorns’

6 min read

By Eric Arnould, global head of equity capital markets, and Anne-Christine Champion, global head of real assets, at Natixis

Unicorns appear to be everywhere today. Private companies valued at more than US$1bn are now less rare mythical beasts than the increasing norm, driven largely by the ongoing boom in the tech sector. But “green unicorns” – private companies that specialise in generating power from renewable wind and solar sources – are a new breed of companies that has emerged, notably in Europe, and that investors would be wise to follow.

As the host for the UN's climate change conference COP21 in 2015, France is home to many of these innovators. But this momentum is now spreading throughout Europe, with frontrunners in France – such as Voltalia, a power producer and service provider in renewable electricity from solar, wind, hydro and biomass – acting as a guiding light for businesses across all sectors to adapt and shape their business models to become more sustainable.

For example, Bulb – a UK-based company that provides 100% renewable energy for homes and businesses – generated £182.8m in revenues over the course of 2018, and grew from 200,000 members at the start of the year to more than 870,000, demonstrating the impressive growth such sustainable ventures can achieve.


Green unicorns share a number of common features. Their business models typically take a long-term view, with the aim of developing, financing, building and operating their power generation assets. These companies also tend to display considerable agility – generating energy from several sources and signing multiple sales agreements with large energy producers, major industry groups and sometimes tech giants, with the ability to operate worldwide.

Their success is also aided by a strong financial network that has played a role in fostering their growth. Support from banks has proven vital, with those banks developing devoted project finance set-ups to support the growth of companies with bankable projects, irrespective of their size.

Furthermore, support from various equity investor categories – including green venture capital funds, business owners, family offices, strategic funds, institutional shareholders (including green and socially responsible funds managed by large asset managers), and individual investors (directly or via life insurance policies) – have played a critical role in the growth of such companies.

Crucially, of course, the success of green unicorns is also underpinned by their profitable growth, which is reflected in investor confidence and leads to high-profile financial transactions. Take Neoen – an independent producer of renewable energy in France and a major player on the world stage, despite being founded as recently as 2008. Neoen’s €697m IPO, priced in October 2018, was France’s largest IPO across all sectors that year.

Such deals have helped set the stage for the rise of green unicorns as they look to the future and attempt to address the challenges raised at COP21, the Paris climate accord and the recent French PACTE law (Plan d'Action pour la Croissance et la Transformation des Entreprises, or Action Plan for Business Growth and Transformation).

Indeed, the renewable power sector has enjoyed steady annual growth over the past 10 years. Looking across all available renewable power sources, solar photovoltaic and onshore wind have posted the strongest gains as energy mix has shifted towards cleaner energy, with average annual growth of 48% and 19%, respectively, between 2007 and 2017, as measured in terms of installed capacity for renewable power stations worldwide.

Several green unicorns, along with the renewable divisions of major power groups, regularly win large contracts in their domestic market space. Green unicorns have a truly global footprint. They may not have the international renown of a business like AirBnB, but their successes are just as solid.


As the market for green bonds, responsible loans and SRI funds has expanded in recent years, green unicorns have been pioneering new certifications, with a view to forging the market standards of tomorrow and influencing the largest asset managers to lobby for change and ramp up the transition to more selective, low-carbon and ethical investment strategies.

The emergence of green unicorns is also attributable to the French and European equity markets. Commentators often cite a decline in IPOs, but fundraising for green unicorns provides fresh hope for the European markets. At Natixis, we’re confident the trend will continue to gain traction. Indeed, in cooperation with ODDO-BHF, we held our first event in June to discuss and celebrate green unicorns to attract new European investors.


A number of aspects are required to safeguard green unicorns’ future. They require a stable environment, which means a clear and solid regulatory framework, as well as the added impetus of ambitious goals established by governments across all regions.

The question now is whether these up-and-coming companies will be able to rival the large power behemoths. Indeed, these established players have their own role to play in the battle against climate change, with oil majors already taking note of green unicorns and recognising them as a potential springboard to further enhance their green credentials – or, instead, choosing to invest in their own ventures. For example, North Sea oil and gas player Parkmead recently announced a £4.9m investment in land to expand its renewable energy capabilities.

The current success of green unicorns in France is good reason for optimism both in the European equity markets and in wider society. The hope is that the next breed of fledgling green unicorns will follow in their footsteps and prompt other industries to adapt and shape their models, thereby promoting sustainability and safeguarding the environment for all. With a consistent and sustainable political and financial approach, strong collaborative efforts and continued innovation, there is every reason to believe they can.