Kinnevik described the performance of many of its climate tech investments as "unsatisfactory".
Swedish VC Kinnevik has written down the value of its stake in Swedish green steel startup Stegra by half, citing the higher anticipated costs of a plant it’s building as it looks to become a major player in Europe’s green industrial transition.
Kinnevik’s latest financial report reveals it has written down the value of its stake in Stegra by 49 per cent to 649 million krona in the fourth quarter from 1,280 million krona in the third quarter. Kinnevik holds a three per cent stake in Stegra.
Stegra, one of Europe’s highest-profile green industrial projects, is developing fossil-free steel using hydrogen.
The write-down comes as Stegra looks to complete $1.1bn in financing to complete the construction of the plant in northern Sweden, which will generate steel using hydrogen.
Kinnevik said: “Stegra’s funding round is progressing positively but is still ongoing. Recent company developments have been positive, including the signing of a significant multi-year contract with ThyssenKrupp Materials Services, and continue to reinforce our underlying business case.
“However, the current funding round reflects a higher project cost than previously expected and is likely to cause meaningful economic dilution of our existing investment in the company.
“This expected dilution is what drives the write-down of our shareholding in the quarter, which remains sensitive to the successful conclusion and final outcome of the ongoing funding round.”
The Stegra plant had been due to open this year but has now been delayed until 2027.
Stegra has raised €6.5bn from investors, including Mercedes-Benz, Siemens, the Agnelli family, and the Singaporean sovereign wealth fund GIC.
According to the Financial Times, Citigroup wants to stop being a lender to Stegra over concerns about its future.
Stegra is part of Kinnevik’s climate tech portfolio, which also includes Agreena and Aira.
Kinnevik CEO Georgi Ganev described the performance of many of its climate tech investments as “unsatisfactory”.
Photo: Stegra