🌎 Climate Tech: What have we learned so far?
Founders Factory Startup Bulletin #27
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Investing in climate is nothing new. We’ve been here before—between 2009 and 2011, $44.5 billion was invested into the ‘clean tech’ sector.
That the clean tech movement is rarely mentioned—at least not in positive terms—speaks volumes about its success, or lack thereof. The majority failed to return investment at Series A stage.
Many reasons are given for its failure—from the complexities of investing in hardware, to macro factors like cheap natural gas and fluctuating silicon prices. But the one accepted consensus is that we can’t afford to fail again. The reality of the climate crisis is already being intensely felt, and the time for action is now.
In setting up G-Force and the Sustainability Seed Programme two years ago, we were at the forefront of a second wave of climate tech investment that has now taken hold. In this Startup Bulletin, G-Force partners Louis Warner and Marian Gazdik share some of their biggest learnings from Fund I, and what that means going into Fund II.
Also in today’s newsletter:
Our top recommended reads
Opportunities in tech—including jobs & events
📣 Before we start—shout outs
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🌎 What we’ve learned about investing in climate
By Louis Warner & Marian Gazdik, G-Force partners
1. The quality of talent working in the space is high
It should come as an assurance to anyone concerned about climate change that the quality of founders building in this space is extraordinary. Today’s best scientists and technologists are channelling their efforts into solving these enormous challenges that face the planet.
In our portfolio alone, the talent is exceptional. We’ve got PhDs (Jonathan Bean, founder of Materials Nexus, and Yka Marjanen, founder of Manna Insect), chemical engineers (Federico Trotta, founder of Metalchemy), and climate scientists-turned-award winning entrepreneurs (Jo Parker-Swift, founder of Solivus).
2. There is a global demand for climate change solutions
One of our investment criteria is the potential for your solution to scale globally. This is critical for us, and any climate founder. Climate change is a global challenge, and as such has a global demand. This is less a challenge and more an advantage: any founder in the world would jump at the opportunity to build a product with global demand.
Quiron Digital is a great example of this. They use satellite imagery and environmental data to predict forest fires at a high degree of accuracy (within 10 days and a 10 metre radius). The company originated in South America, but has quickly gained traction in Australia, California, and Southern Africa, all regions that face the issue of deforestation and degradation.
3. The best founders can blend hardware and software
One failure of prior clean tech movements was a reluctance to invest in hardware solutions (we all know how investors prefer ‘bits’ to ‘atoms’). The issue is, climate change is a physical challenge that requires physical solutions.
What’s seriously impressed us is the businesses who combine hardware and software solutions. Materials Nexus is the perfect example: applying AI and quantum computing to the development of rare earth materials that might ordinarily take 20 years to research and develop.
4. Just financing isn’t enough for climate founders
We always set out to differentiate our offering on the Sustainability Seed Programme. Unlike other climate investors, who would just deploy capital, we wanted to offer something more to founders. We applied our tried and tested Founders Factory formula, offering six months of operational support alongside capital, as well as support on applying for grant funding. We set out to test if these three pillars were an attractive proposition to climate founders (and our volume of applications would suggest they were).
That said, we understand how important capital is to founders at this stage. We’ve actually increased our investment package, from €150k up to €250k, to give founders more firepower and flexibility at this early stage.
5. Climate is hard to fit into buckets
We initially set out with five key investment themes. But what we quickly discovered was that climate tech is often hard to fit into buckets. Solutions are many and varied, and we didn’t want to restrict ourselves through strict criteria.
For that reason, going forward, we’ve defined the following criteria:
Do you solve a large and clear problem in a unique and compelling way?
Do you have the potential to scale effectively across borders?
Will you have a clear impact in lowering greenhouse gases?
These learnings are abridged from a longer article written by Louis and Marian.
G-Force Fund II is officially up and running. They are partnering with Seedrs to offer eligible investors the opportunity to get involved and embark on their own climate investing journey. You can find out more on their Seedrs page.
📚 What we’ve been reading
AI and the Burden of Knowledge (The Generalist)—comparing how humans and machines acquire and retain knowledge, and what that means for the future of AI
The Rise of Multiplayer Software (Northzone)—exploring the rise of collaboration in the software space, and the startups driving this forward
AI Leapfrogging: How AI will transforms lagging industries (NFX)—capability of AI to help certain industries skip gradual evolution, just as fintechs helped many countries ‘leapfrog’ the credit system
The economic potential of generative AI: The next productivity frontier (McKinsey)—McKinsey’s deep dive into the impact of Gen AI on the workforce and productivity
The Age of Reenchantment (Wunderman Thompson)—global trends report on how brands can recapture consumer attention through emotionally-captivating experiences
Opportunities in tech
🛠️ Roles
Founder Opportunity (London/Hybrid)—we’re exploring opportunities around longevity in the fintech sector (everything from protection to health to wealth). This is a chance to co-found a business with us in our Venture Studio, alongside the UK’s biggest insurer Aviva. Find out more about where we’re looking to build
Product Coach, Founders Factory (London/Hybrid)—join our product team and get the chance to work with early stage founders in our Accelerator
CTO/Head of Data Science, Martee’s (London)—automated micro-markets for fresh food
CTO Co-Founder/Tech Lead, Project Chiron (London/Hybrid)—digital platform for chronic health condition management
Tech Lead, Renbee (London/Hybrid)—dedicated platform for renewable installers
📆 Events
Tech for Good Power Hack: Helping women into tech (July 27th, London)—join this free hackathon run by SheCanCode. Find out more
Tech Chill Milano (September 25th - 27th, Milan)—annual international festival of startups and tech. Find out more & get a pass here
See you next month 👋
Interested in reading more of the same insights? Check out the Founders Factory blog, and previous newsletters
I learned personally during the climate crisis that institutions and their leaders who have enormous decision-making power are not reaching out to the right resources to provide an effective solution to climate and energy problems. We have known for a long time that it is the bad energy used that creates climatic disturbances. Indeed while these problems began to be threatening. An interesting article which makes it possible to desalinate sea water without pollution, without energy. See: Journal of chemistry and chemical engineering www.davidpublishing.com volume 7 number 9 September 2013. The article entitled New Method for desalination of seawater was quickly picked up by the Academia.edu network. The biggest advantage of this technology is: in addition to water and potassium it provides a considerable amount of clean and renewable energy (more than 700,000 calories per liter of desalinated seawater) which can be converted into electricity via steam turbines. If we had applied it for these 10 years, we would no longer need oil and the world would stop dumping CO2 into the atmosphere. And yet we still promote membranes to desalinate seawater. A polluting, energy-intensive technique.
I also have another motivational motor rehabilitation project (Wankel) hydrogen fuel a more efficient motor than the electric motor that does not need heavy batteries (I have built 2 prototypes, I am looking of partners to commercialize this research. Therefore any form of help that I have never had would be welcomed.
Thank you for reading my message!