WEBVTT 1 00:00:08.119 --> 00:00:14.519 You are listening to Redefining Energy. Your co hosts from Berlin Gerard Reid and 2 00:00:14.599 --> 00:00:20.079 from London Laurent Segelan. Today on Redefining Energy, we're going to talk about 3 00:00:20.199 --> 00:00:24.079 climate tech and Giad, we have a new music. Because when I hear 4 00:00:24.120 --> 00:00:27.160 all the other podcasts they have a nice music, I say, why not 5 00:00:27.320 --> 00:00:34.399 us, So we've chosen the music of the Persuaders, a TV series of 6 00:00:34.439 --> 00:00:39.520 the early seventies with Roger Moore Anthony Curtis, which is basically US so to 7 00:00:39.799 --> 00:00:45.560 all due trying to save the world while having a good time. But first 8 00:00:45.560 --> 00:00:49.359 of all, from our partner. I. Quitted Capital is a sustainable investment 9 00:00:49.359 --> 00:00:53.920 company headquartered in Hamburg, Germany. E quit a Capital investment realists such as 10 00:00:53.960 --> 00:00:58.920 clean energy, sustainable infrastructure, energy efficiency and growth private equity on behalf of 11 00:00:59.000 --> 00:01:04.239 its clients. So the climate tech what is climate tech? It's investment by 12 00:01:04.799 --> 00:01:12.959 specialist venture capital companies who invest in a wide array of technologies which are supposed 13 00:01:14.359 --> 00:01:19.719 or everybody hope to solve the energy transition, when I'd actually say the climate 14 00:01:19.719 --> 00:01:26.000 crisis, because it's not just energy, it's also agriculture, deforestation as a 15 00:01:26.040 --> 00:01:30.799 whole. It's a huge huge scope of problems that you have to deal with 16 00:01:30.840 --> 00:01:34.000 when you talk about climber and by the way, that's just preventing it. 17 00:01:34.480 --> 00:01:38.200 But also I think we're also going to have to move to dealing with climate 18 00:01:38.280 --> 00:01:42.480 change in other words, flood protections, storm protection, all that type of 19 00:01:42.519 --> 00:01:48.000 stuff. So it's i'll call it a huge growth market going forward, right 20 00:01:48.400 --> 00:01:52.439 absolutely, and a lot of the solutions will be digital. So that's why 21 00:01:52.480 --> 00:01:57.120 we have decided to go to Silicon Valley to meet one of the most amazing 22 00:01:57.560 --> 00:02:04.920 investor in climate tech, and that's Caroline Funk. She's partner at Bluebird Capital, 23 00:02:05.519 --> 00:02:12.039 investing at the intersection of climate tech and the digital enterprise transformation, and 24 00:02:12.080 --> 00:02:16.319 she had a very long career supporting the anti transition, working for government agency, 25 00:02:16.400 --> 00:02:21.360 LASH corporation, early stage venture. At some point she was a CFO 26 00:02:21.719 --> 00:02:25.800 of Free Wires. Oh is she really Okay? Yeah, let's bring her 27 00:02:25.879 --> 00:02:30.719 in the conversation. Caroline, welcome to the show. Great to be here. 28 00:02:30.840 --> 00:02:36.680 Thank you. We're going to talk about climate tech and you're going to 29 00:02:36.719 --> 00:02:40.680 explain me if it's still the right world at what's your definition of it? 30 00:02:42.000 --> 00:02:46.280 Climate tech to me is not an industry. It's more a theme. It's 31 00:02:46.520 --> 00:02:53.400 technologies that impact climate and that impact some verticals that we kind of think about 32 00:02:53.439 --> 00:02:57.280 when we think about climate change. Some of these verticals, for example, 33 00:02:57.680 --> 00:03:02.800 include energy, food, land use, transportation, built environment, carbon, 34 00:03:04.199 --> 00:03:09.520 industrial, and our specific lens at Blue Bear is even broader. Anything that 35 00:03:09.879 --> 00:03:16.280 enables accelerates de bottlenecks. The energy transition for us is in focus. We're 36 00:03:16.319 --> 00:03:22.919 not impact first investors, but we fall into that climate tech theme, and 37 00:03:23.000 --> 00:03:28.560 specifically we believe that there're going to be trillions of dollars invested in the energy 38 00:03:28.599 --> 00:03:34.400 transition and they will be the biggest driver of change in our lifetime. So 39 00:03:34.479 --> 00:03:38.199 that's our broader view on the topic. Okay, Karen, can I ask 40 00:03:38.240 --> 00:03:40.199 you just when I listen to you there and I listen to the size of 41 00:03:40.240 --> 00:03:45.000 the universe, it's join, amos. How do you keep track of that 42 00:03:45.319 --> 00:03:49.159 and then make even decisions as to where to put your money? Right? 43 00:03:49.719 --> 00:03:54.080 The last number I read that since twenty twenty one, there have been about 44 00:03:54.280 --> 00:04:00.319 one hundred and twenty billion of total climate assets under management. And that's not 45 00:04:00.680 --> 00:04:08.000 just venture capital or corporate VC, but that's growth and infrastructure private equity funds. 46 00:04:08.199 --> 00:04:13.080 So that's kind of the whole universe. What we look at is companies 47 00:04:13.159 --> 00:04:19.399 that are in the early growth stage in the intersection of two different macro trends 48 00:04:19.480 --> 00:04:25.439 that we're super excited about. One is the energy transition as I mentioned it, 49 00:04:25.680 --> 00:04:30.319 and the other one is the software, data capture, processing and application 50 00:04:30.399 --> 00:04:36.720 area. We look at this intersection where software and data meets energy transition and 51 00:04:36.759 --> 00:04:42.399 why have we chosen that lens because we are all worked in different sectors with 52 00:04:42.560 --> 00:04:46.240 that lens over the past decade. Everybody at Bluebear has I understand the big 53 00:04:46.279 --> 00:04:53.240 picture, but can you give me some example in your portfolio of investment you've 54 00:04:53.240 --> 00:04:58.199 made and why did you choose to make those investments. We're currently investing out 55 00:04:58.199 --> 00:05:01.319 of our third fund, and that off beginning of this year. We've been 56 00:05:01.360 --> 00:05:05.959 around since twenty sixteen. So in Fund one, some of the themes that 57 00:05:06.000 --> 00:05:15.839 we invested in were the operationalizing of wind and solar technologies. Companies like Ratromaps, 58 00:05:15.879 --> 00:05:20.079 who provides the system of record for utility scale and large commercial and industrial 59 00:05:20.120 --> 00:05:26.399 solar installations. Another one is a company called Shoreline. They do with something 60 00:05:26.480 --> 00:05:31.240 similar for large wind projects, specifically in the offshore wind stage. So back 61 00:05:31.279 --> 00:05:39.720 in those days we saw a lot of optimization on operationalizing of these wind and 62 00:05:39.759 --> 00:05:46.120 solar assets. In fun two we move more into the battery and EV space. 63 00:05:46.519 --> 00:05:53.000 For example, we invested in a Cure company that provides intelligence, safety 64 00:05:53.399 --> 00:06:00.480 and maintenance tracking of battery systems and stationery and mobile systems, or Pani Energy, 65 00:06:00.839 --> 00:06:06.480 which provides that similar thing for water plants. We also invested in last 66 00:06:06.560 --> 00:06:15.319 Wall, a company that provides cybersecurity systems for critical infrastructure to make sure everything 67 00:06:15.399 --> 00:06:18.879 that's out in the field there is managed and connected in a secure way. 68 00:06:19.240 --> 00:06:25.079 Now we're investing out of our third fund and we're getting more into the operationalizing 69 00:06:25.240 --> 00:06:30.279 of for example, electric vehicle charging infrastructure. We invested in Charger Help. 70 00:06:30.120 --> 00:06:40.079 They help charging network owners and operators optimize and manage charging infrastructure because today about 71 00:06:40.399 --> 00:06:45.240 twenty to thirty percent of the chargers are not actually working. Another company in 72 00:06:45.279 --> 00:06:51.000 this fund is Scone out of the Netherlands, who provides software and a marketplace 73 00:06:51.079 --> 00:06:57.040 for mobile clean power because we've got to take all these diesel generators out of 74 00:06:57.040 --> 00:07:00.560 the market. Yeah, we love schoon did I have a special story Wispitople 75 00:07:00.879 --> 00:07:04.759 that I've known for quite some time. I think it's a great company. 76 00:07:05.079 --> 00:07:10.519 On average, your ticket size would be what five million, ten million? 77 00:07:11.160 --> 00:07:15.439 Do you have a parlymit lower limit? So our ticket size on average, 78 00:07:15.720 --> 00:07:19.360 the first check that we write is three to six million, and then we 79 00:07:19.399 --> 00:07:25.639 reserve two dollars for every dollar we invest in as a follow on. Because 80 00:07:25.800 --> 00:07:30.160 our strategy is a high concentration, high conviction strategy, we're only looking to 81 00:07:30.279 --> 00:07:34.839 make fifteen to seventeen investments out of each fund. We want to be close 82 00:07:34.920 --> 00:07:40.240 with these founders. We want to help these companies grow and not play the 83 00:07:40.360 --> 00:07:45.319 large numbers game investing, praying and praying as a lot of folks say, 84 00:07:45.720 --> 00:07:48.800 into dozens and dozens of companies and hope that a few of them make it. 85 00:07:49.319 --> 00:07:53.720 Carolyn, I'm really interested in You have this huge funnel of companies that 86 00:07:53.759 --> 00:07:56.959 you're looking at, and then you need to take that funnel and come down 87 00:07:57.000 --> 00:08:01.000 to small number of companies. How do you do that? We look at 88 00:08:01.040 --> 00:08:05.879 about one hundred and fifty two hundred companies each quarter, and that's a lot. 89 00:08:05.079 --> 00:08:11.000 We filter out a lot because of our specific view on the market. 90 00:08:11.120 --> 00:08:16.120 That we invest in asset light technologies because we believe there are others that are 91 00:08:16.240 --> 00:08:22.360 better equipped to invest in the asset heavy like private equity investors, more infrastructure 92 00:08:22.360 --> 00:08:26.160 and type investors for the venture scale, we believe that software and data are 93 00:08:26.199 --> 00:08:31.720 going to provide the biggest returns. That's one part of the funnel filtering out 94 00:08:31.759 --> 00:08:35.080 hardware. Then when we're looking at the specific sectors, we're only looking at 95 00:08:35.240 --> 00:08:41.440 companies that already have revenue. So if it's a pilot, hopefully it's already 96 00:08:41.480 --> 00:08:46.600 product sale that we can see customers are actually buying what they need. And 97 00:08:46.639 --> 00:08:50.519 then we use our network to really understand if there is a broader need for 98 00:08:50.879 --> 00:08:56.440 what the company is offering or for the technology innovation. So during our diligence 99 00:08:56.519 --> 00:09:01.559 process, we reach out to our network and our LPs which have a strong 100 00:09:01.639 --> 00:09:05.000 foothold in the energy private equity industry, and have these conversations. So of 101 00:09:05.000 --> 00:09:09.639 course we can't do that with all the two hundred companies we see per quarter, 102 00:09:09.000 --> 00:09:13.159 but because we've all worked in the energy industry before, we pretty much 103 00:09:13.360 --> 00:09:16.879 already know what could be a fit. And then, yeah, we only 104 00:09:16.960 --> 00:09:22.840 make about four to six investments each year, so it's a very narrow tip 105 00:09:22.879 --> 00:09:26.360 of the iceberg. I'm not going to flatter you, but having you and 106 00:09:26.639 --> 00:09:31.600 the type of scrutiny you put in your investment is a key foundation in my 107 00:09:31.720 --> 00:09:35.639 opinion of the success. And I hear that the generic business model of VC 108 00:09:35.919 --> 00:09:41.480 would be Okay, one company or two out of a portfolio of twenty make 109 00:09:41.559 --> 00:09:45.399 it through within five years. But I guess you have a better percentage of 110 00:09:45.480 --> 00:09:50.200 success than one in twenty. Yeah. Our goal is that all of our 111 00:09:50.240 --> 00:09:54.200 companies are going to get to an exit, not each of them is going 112 00:09:54.279 --> 00:10:00.159 to be a huge IPO. That's also not what we're underwriting because that it's 113 00:10:00.159 --> 00:10:05.279 also not what we have seen in the history of the energy and climate markets. 114 00:10:05.480 --> 00:10:09.879 We just don't have these proof points. So I'm sometimes scratching my heads 115 00:10:09.919 --> 00:10:16.679 when general is invest in companies in a space with a huge valuation and then 116 00:10:16.000 --> 00:10:20.679 just not understanding what the history of the exits and the market is. So 117 00:10:20.759 --> 00:10:26.840 our focus really is to make each of the companies in our portfolio success. 118 00:10:26.960 --> 00:10:31.480 We've shown some of that with some early exits. But also one goal for 119 00:10:31.600 --> 00:10:35.159 investors is main and key goals not to lose any money, and we have 120 00:10:35.519 --> 00:10:39.360 shown a terrific track record on that of course as well. I like what 121 00:10:39.440 --> 00:10:43.480 you said there. You talked about valuations, and I really would like to 122 00:10:43.519 --> 00:10:46.480 talk about what's going on in the market present, because one thing that certainly 123 00:10:46.639 --> 00:10:50.080 I've seen over the last twelve months, maybe fifteen months, is that you 124 00:10:50.320 --> 00:10:56.000 had a lot of investors who did in turn rounds because what they wanted to 125 00:10:56.000 --> 00:10:58.080 do was delay down rounds, if i'd like to say, in other words, 126 00:10:58.159 --> 00:11:03.080 valuations were too high. And now what you're seeing this year is there's 127 00:11:03.159 --> 00:11:07.399 quite a lot of difficulties in the whole climate tech market. So I don't 128 00:11:07.440 --> 00:11:09.679 know if you're seeing the same thing, but maybe you could comment on that. 129 00:11:11.080 --> 00:11:16.120 There are a few trends that we're seeing currently. There has been quite 130 00:11:16.240 --> 00:11:20.919 fewer numbers of investments made. I read some numbers that it's forty percent less 131 00:11:22.080 --> 00:11:26.240 in the first half of this year than in twenty twenty two. So it's 132 00:11:26.279 --> 00:11:31.480 harder to raise money and less people are raising money, and the way that 133 00:11:31.519 --> 00:11:37.440 the market reacts to that is, of course valuations are going down. We 134 00:11:37.639 --> 00:11:43.279 are fortunate and also have been pretty scrutinous on ourselves in the past two years 135 00:11:43.279 --> 00:11:48.840 when valuations were high, really still finding the deals and finding the founders in 136 00:11:50.080 --> 00:11:54.399 different geographies, for example and the Netherlands, in Germany where things were not 137 00:11:54.480 --> 00:11:58.440 as inflated as for example, in Silicon Valley. We see there is a 138 00:11:58.519 --> 00:12:03.000 lot of ry powder, so money is there, but people are waiting and 139 00:12:03.320 --> 00:12:09.720 trying to see how the market is going to correct. We're continuously making investments. 140 00:12:09.000 --> 00:12:13.519 We've made four investments this year so far. We think that they're really 141 00:12:13.600 --> 00:12:18.799 good proof points within the industry and the industry growth that we want to take 142 00:12:18.840 --> 00:12:24.320 advantage of. And the big thing and the big driver are what we see 143 00:12:24.320 --> 00:12:31.080 in the exit markets, so follow on investors. We usually invest in seed, 144 00:12:31.200 --> 00:12:35.440 series A and sometimes Series B stage. Following investors in serious C and 145 00:12:35.600 --> 00:12:41.320 later rounds have been much slower because there haven't been as much many exits that 146 00:12:41.360 --> 00:12:46.240 we've seen. It's not just about IPOs. Everybody has talked about the IPO 147 00:12:46.360 --> 00:12:52.159 window being closed, but also acquisitions have been fewer, and so that's why 148 00:12:52.200 --> 00:12:56.799 things are a little bit slower this year. I'm still very bullish on how 149 00:12:56.840 --> 00:13:03.399 things will develop because there's so much dry powder in the space and people want 150 00:13:03.440 --> 00:13:07.720 to make investments, and it's just going to take a little bit longer. 151 00:13:07.799 --> 00:13:11.720 But it is still happening. Caroline, I know it's almost the end of 152 00:13:11.799 --> 00:13:16.000 twenty three and we always want to look at the future. But let me 153 00:13:16.039 --> 00:13:20.480 tell you, as a key observer of what's going on, I've seen some 154 00:13:20.600 --> 00:13:26.159 sparks listed which are an absolute disgrace. That was a quick, easy money. 155 00:13:26.639 --> 00:13:31.200 But I'm sure the reasonable people, and I think you're part of them, 156 00:13:31.279 --> 00:13:37.600 have indirectly suffered from this frenzy of evaluation for company who were like really 157 00:13:37.639 --> 00:13:43.159 worthless or am I just bubbling here? The people that have suffered most from 158 00:13:43.200 --> 00:13:48.039 it are some of the founders. Yes, there have been a few winners, 159 00:13:48.399 --> 00:13:54.120 but the founder psychology it has been really difficult because you see these big 160 00:13:54.200 --> 00:13:58.159 names, you see these big exits, and you feel, as a founder, 161 00:13:58.200 --> 00:14:03.360 I have to get myself and that puts a lot of pressure on you. 162 00:14:03.720 --> 00:14:05.919 And we know that starting a business is hard in and of itself. 163 00:14:05.960 --> 00:14:11.559 And now you're a climate tech founder that sees some of these backs in twenty 164 00:14:11.600 --> 00:14:16.759 twenty one and sees the average number of deals and deal sizes and exercise, 165 00:14:16.080 --> 00:14:22.840 and that average number is just very much skewed towards those few very big deals, 166 00:14:22.120 --> 00:14:26.399 and you're just starting to doubt yourself. So what we're really looking for 167 00:14:26.440 --> 00:14:31.759 our founders that are also very grounded and that are industry experts, that are 168 00:14:33.120 --> 00:14:37.399 trying to automize the job they might have been doing before there were consultants and 169 00:14:37.519 --> 00:14:43.039 doing environmental risk assessment, and now they're automating those people that have been building 170 00:14:43.519 --> 00:14:46.879 wind and solar plans in their past and really understand that this is not the 171 00:14:48.000 --> 00:14:52.720 space where you build the next Google or Amazon. This is a space that 172 00:14:52.919 --> 00:14:56.679 is a little slower, and that is a little harder and requires a lot 173 00:14:56.720 --> 00:15:01.120 of industry expertise. We're not here to move fast and break things. We're 174 00:15:01.159 --> 00:15:07.080 here to move the needle slowly, one ticke at a time. Darling, 175 00:15:07.240 --> 00:15:09.840 I go back to how you started the whole conversation, which was you're saying, 176 00:15:09.879 --> 00:15:13.919 this is the greatest opportunity of our lifetime in terms of growth opportunity, 177 00:15:13.960 --> 00:15:18.759 and there's going to be huge businesses created. But you're sort of criticizing yourself 178 00:15:18.799 --> 00:15:22.240 here when you say that, So how do you match that the investment opportunity 179 00:15:22.320 --> 00:15:28.679 in and of itself that we're going through this energy transition in the transportation sector 180 00:15:28.759 --> 00:15:35.559 and the electricity sector and the building sector. That's a huge opportunity and there 181 00:15:35.600 --> 00:15:39.840 will be winners, there will be the ten x and one hundred x, 182 00:15:39.000 --> 00:15:43.440 multiple winners, but are there going to be the one thousand, x and 183 00:15:43.600 --> 00:15:48.200 whatever beyond type of winners. I don't know. In general, as an 184 00:15:48.200 --> 00:15:52.759 investment opportunity, I stand by my word, this is the biggest opportunity of 185 00:15:52.840 --> 00:15:56.720 our lifetime because we have to go through this massive change. And listen, 186 00:15:56.799 --> 00:16:00.480 I think myself in the ROME would grief fully with you that this sector is 187 00:16:00.519 --> 00:16:04.759 incredible in terms of the growth opportunity, etcetera, etcetera. And we've already 188 00:16:04.799 --> 00:16:08.440 seen this in terms of you know, the Tesla's, the byds and all 189 00:16:08.480 --> 00:16:11.919 these great solar companies that have been created, and most of them have been 190 00:16:12.039 --> 00:16:15.840 very capital intensive. What I think is very interesting about you you're doing is 191 00:16:15.919 --> 00:16:21.440 you're not going capital intensive, so you're going at this digital area, which 192 00:16:21.480 --> 00:16:26.000 we think is incredibly critical to the energy transition. But the point I want 193 00:16:26.039 --> 00:16:33.279 to ask you really is you're trying to digitalize a very very conservative energy industry 194 00:16:33.279 --> 00:16:37.919 and I'm talking about a wider energy, agriculture, carbon emitting industry. It's 195 00:16:37.960 --> 00:16:41.480 difficult, is it not? How do you see it? It totally is 196 00:16:41.519 --> 00:16:47.840 difficult, but it is happening, and we're seeing the optimization in the market 197 00:16:48.080 --> 00:16:53.279 that have been driven by software and data and we've used for example, manufacturing 198 00:16:53.519 --> 00:17:00.799 internal combustion engines. Yeah, we've used industrial optimization software over years. Now 199 00:17:00.879 --> 00:17:07.200 we're translating this to battery manufacturing. We've used software and data and consulting to 200 00:17:07.279 --> 00:17:14.039 optimize oil and gas sourcing, handling, refining, and now we're doing this 201 00:17:14.119 --> 00:17:19.200 with wind and solar. What we're seeing on these steep degradation curves in pricing 202 00:17:19.319 --> 00:17:25.839 of wind solar battery assets, there's a lot of software and data driving that, 203 00:17:26.440 --> 00:17:30.519 and that's what I'm super excited about because it is happening. So when 204 00:17:30.799 --> 00:17:36.160 Luberg Capital was created almost eight years ago, and again that's a bit of 205 00:17:36.279 --> 00:17:41.640 contrafactual, but what investment have you not made you wish you had made? 206 00:17:41.960 --> 00:17:45.400 And what about investment you made? Is our crap? That's you know, 207 00:17:45.599 --> 00:17:49.559 that was that call. Sometimes I think we could have made more exceptions and 208 00:17:49.680 --> 00:17:55.759 investing in some hardware companies. Our focus really is on the software side. 209 00:17:56.160 --> 00:18:00.119 For example, I am an advisor and not an investor in a company called 210 00:18:00.200 --> 00:18:07.759 Liminal. They create ultrasound systems to optimize battery manufacturing. I wish we'd be 211 00:18:07.839 --> 00:18:12.039 an investor here. I'm an advisor, so I still have some upside in 212 00:18:12.079 --> 00:18:17.960 the company, things that I wish we wouldn't have invested in. It would 213 00:18:17.960 --> 00:18:22.960 have been great if we had invested in more cybersecurity startups in general, to 214 00:18:23.079 --> 00:18:27.359 understand the space better. It's a tough space to navigate, and if you 215 00:18:27.519 --> 00:18:32.119 just do one or two investments in the space, it takes a lot of 216 00:18:32.160 --> 00:18:37.079 time to stay on top of things that are happening in the market. We 217 00:18:37.119 --> 00:18:41.720 have two investments in the space today with a company called Mission Secure and another 218 00:18:41.759 --> 00:18:45.880 one called Last Wall, But just staying informed about what's going on there is 219 00:18:47.079 --> 00:18:51.759 really taking time and is hard. And in a parallel way, what type 220 00:18:51.759 --> 00:18:55.799 of investment you're doing now that you would not have done, say five years 221 00:18:55.839 --> 00:19:00.359 ago. What are the new themes you're really excited about now? A few 222 00:19:00.400 --> 00:19:04.359 things that we haven't made an investment yet but we're tracking right now. That 223 00:19:04.440 --> 00:19:10.359 are different is we're taking a much deeper look into the hydrogen space. We 224 00:19:10.440 --> 00:19:15.079 see that there is always hardware investment first and then software investment comes later, 225 00:19:15.400 --> 00:19:21.240 so hydrogen is just starting to become more prolific. We're taking a closer look 226 00:19:21.279 --> 00:19:26.000 into nuclear that five years ago wouldn't have been on the table because there was 227 00:19:26.079 --> 00:19:30.960 not that much innovation coming to the market. Actually, another space is the 228 00:19:32.039 --> 00:19:37.960 electrification of everything in buildings, and that's actually a space that largely driven by 229 00:19:37.039 --> 00:19:41.799 regulation, which we don't like to take the regulatory risk, but we see 230 00:19:41.960 --> 00:19:47.960 that in North America and in Europe there's such firm regulation in place trying to 231 00:19:48.000 --> 00:19:52.559 electrify the energy, heating and everything that's going on in a building that we 232 00:19:52.680 --> 00:19:56.079 think now the time is right to do that. Can I ask you just 233 00:19:56.119 --> 00:20:00.920 about something else, which is just I mean, you're investing internationally. Can 234 00:20:00.960 --> 00:20:06.000 you talk about the differences between investing in maybe Asia, Europe and the US, 235 00:20:06.200 --> 00:20:08.480 and also how you see that going forward in terms of innovation. Where 236 00:20:08.519 --> 00:20:14.559 is the innovation in this area taking place? Our focus really is investing in 237 00:20:14.720 --> 00:20:18.200 North America and Europe. I'm originally from Germany, I'm in the Bay Area. 238 00:20:18.680 --> 00:20:23.680 More of our team has also experienced working in the UK, and we're 239 00:20:23.720 --> 00:20:29.480 all located in the US at this point. So I think one general benefit 240 00:20:29.559 --> 00:20:33.599 that we bring to folks is that we can help, for example, European 241 00:20:33.799 --> 00:20:37.960 companies enter the US market, much like we're doing with Scone and a Cure 242 00:20:37.000 --> 00:20:45.799 who mentioned before. But overall investment in Europe in the space has been taking 243 00:20:45.880 --> 00:20:51.160 up much more and much faster, partially through the regulation that is happening, 244 00:20:51.279 --> 00:20:56.880 and just also more stability and predictability in what's going to happen on the regulatory 245 00:20:56.960 --> 00:21:03.920 side, compared to the US, where a lot of climate tech discussion is 246 00:21:03.960 --> 00:21:10.440 still very much politicized. So we've been looking more into European companies. We're 247 00:21:10.599 --> 00:21:15.839 making about a third of our investments in Europe and the rest or North America. 248 00:21:15.480 --> 00:21:19.519 We don't invest in Asia. We just don't have that knowledge. Honestly, 249 00:21:19.799 --> 00:21:25.200 it's a different world. But generally, what I'm seeing in the market 250 00:21:25.240 --> 00:21:30.279 and also reading the numbers, is that global venture capital in Asia has been 251 00:21:30.480 --> 00:21:34.839 decreasing a little bit, whereas in Europe it's been increasing, and the America 252 00:21:34.920 --> 00:21:40.119 is still the same at about fifty percent. I think that's an interesting trend 253 00:21:40.240 --> 00:21:44.200 that kind of plays into our cards. I'm in the Bay Area, it's 254 00:21:44.200 --> 00:21:49.079 still the top market of investing. Our portfolio is not so much concentrated in 255 00:21:49.079 --> 00:21:53.200 the Bay Area, but for me, it's just great because everybody travels through 256 00:21:53.240 --> 00:21:57.799 here and wants to meet investors, and no matter where you're from in the 257 00:21:57.839 --> 00:22:00.960 world, so you can meet me in a Bay Area to have a coffee 258 00:22:02.000 --> 00:22:06.119 and have a chat. Caroline, where'd you see blueber Capita in five years? 259 00:22:06.519 --> 00:22:10.119 You have grown? Do new funds and how do you see it going. 260 00:22:10.640 --> 00:22:15.519 I see that we will continue with our strategy, which I love because 261 00:22:15.759 --> 00:22:21.079 investing in early growth companies is a space where we can provide a tremendous amount 262 00:22:21.079 --> 00:22:25.160 of help. It's where I worked before and startups that are at seed series 263 00:22:25.200 --> 00:22:29.720 a stage. So far, we've been on that interval that we start a 264 00:22:29.759 --> 00:22:33.640 new fund every three years. I think we will continue doing that, and 265 00:22:33.680 --> 00:22:37.359 then I hope we will continue to start some side activities. For example, 266 00:22:37.440 --> 00:22:44.359 we have a partner of organization Deep Green Solar. They invest in rooftop solar 267 00:22:44.680 --> 00:22:48.160 and areas that are maybe a little bit more of the beaten track. I 268 00:22:48.160 --> 00:22:52.839 hope that we do more of that for examples, and storage that may be 269 00:22:52.359 --> 00:22:59.079 law and us. We can combine forces and invest in more storage opportunities and 270 00:22:59.480 --> 00:23:04.359 that we yeah help these founders tackle those markets. I am very cautious on 271 00:23:04.400 --> 00:23:07.920 what's going on in the climate change world. I think in five years will 272 00:23:07.920 --> 00:23:15.000 have a lot of clarity of what temperature increases we will see towards the end 273 00:23:15.079 --> 00:23:18.039 of the century. Because we're not meeting our goals. So I think that 274 00:23:18.200 --> 00:23:23.160 we will have to invest much more in the climate adaptation space and that this 275 00:23:23.400 --> 00:23:27.680 is a space where hopefully we'll have our next conversation on with gol I. 276 00:23:27.880 --> 00:23:32.200 It was great to have you on the show. It was great to have 277 00:23:32.319 --> 00:23:36.359 this panorhamma of climate tech investing. So on one hand, a lot of 278 00:23:36.400 --> 00:23:41.839 optimism, but also keep your feet on the ground and understand the thesis of 279 00:23:41.119 --> 00:23:45.559 this company that are going to grow a job. And I'm looking forward to 280 00:23:45.599 --> 00:23:51.240 talking about climate adaption next year with you. Very important. No, it 281 00:23:51.279 --> 00:23:52.880 was great having you. Thank you very much. Thank you for having me 282 00:23:52.960 --> 00:23:56.759 both. It's all run. But you think when I'm going to be very 283 00:23:56.799 --> 00:24:03.640 direct in the industry of you have plastic bags and air mess bags, and 284 00:24:03.680 --> 00:24:08.000 I can tell you Blue Black Capital that's Hermes Bag, it's Royalty. No, 285 00:24:08.200 --> 00:24:14.480 really, they don't do the normal VC strategy, what they call spraying 286 00:24:14.559 --> 00:24:21.519 and praying. Their investment are highly concentrated. They add value to the management 287 00:24:21.839 --> 00:24:26.440 and I would trust any startup who was blue Bear in their cap table. 288 00:24:26.079 --> 00:24:30.839 Actually, I like the way you polish, which is a lot of venture 289 00:24:30.880 --> 00:24:33.200 capitals. What they do is just spray money, and they don't really bring 290 00:24:33.279 --> 00:24:38.799 value to their investors or to the companies they invest in. But if you 291 00:24:38.799 --> 00:24:44.480 have a much more focused approach, which is what Caroline does at brings value 292 00:24:44.480 --> 00:24:48.759 to everybody. So I really really like it, like what they're doing and 293 00:24:48.799 --> 00:24:52.039 again not saying, okay, if one of our twenty investment works will do 294 00:24:52.160 --> 00:24:56.319 fine, and probably that used to work back ten years ago. Now you 295 00:24:56.440 --> 00:25:03.559 need to be extremely selective. A team they analyze hundreds of opportunities per year 296 00:25:03.599 --> 00:25:07.400 at some point, she said, like two hundreds every quarter and she makes 297 00:25:07.880 --> 00:25:14.240 what four to six investment. The work they are doing is amazing. Yeah, 298 00:25:14.319 --> 00:25:15.759 And then don't forget what you don't see is the work they do that 299 00:25:15.839 --> 00:25:22.200 behind the scenes, which is you're actually helping these businesses scale as opposed to 300 00:25:22.279 --> 00:25:26.079 I know many venture capitalists and what their job is is to just go from 301 00:25:26.079 --> 00:25:30.400 one board meeting to another. So that's not bringing value to the company you're 302 00:25:30.440 --> 00:25:34.519 investing in, right, So I really do like that selective approach. Obviously, 303 00:25:34.559 --> 00:25:37.839 in the climate area, it's really important because what we wanted to be 304 00:25:37.920 --> 00:25:42.519 able to do is get the critical technologies that we need to get to market 305 00:25:42.559 --> 00:25:47.000 quickly. If I look back at my experience in the climate, whether it's 306 00:25:47.359 --> 00:25:51.200 solo win the batteries. Sometimes it takes a long while to get these technologies 307 00:25:51.200 --> 00:25:55.160 to market because you have a lot of resistance from incumblents. I would say, 308 00:25:55.200 --> 00:25:59.000 you know, so they need help, and I like that approach. 309 00:26:00.920 --> 00:26:06.640 We thank Caroline for coming on the show, and we thank our partner, 310 00:26:06.880 --> 00:26:11.039 our fever partner, Aquila Capital. Guys, you're so great. We thank 311 00:26:11.039 --> 00:26:15.200 you so much for your support along the years. Thank you Lars and the 312 00:26:15.200 --> 00:26:18.880 rest of the team. We love you. For once, I haven't cursed, 313 00:26:19.240 --> 00:26:26.319 so I hope you're happy. Okay, Yard, all right, talk 314 00:26:26.319 --> 00:26:29.799 to you in two weeks time. Take care, my friend. Thank you 315 00:26:29.839 --> 00:26:34.160 for listening to Redefining Energy. Don't forget to rate the show and subscribe on 316 00:26:34.319 --> 00:26:38.519 Apple, Podcast, Spotify, or the platform of your choice.