Insider's Guide to Energy

38 - Meet Buoyant Ventures, a female-led fund boosting data start-ups in cleantech.

September 20, 2021 Chris Sass Season 2 Episode 38
Insider's Guide to Energy
38 - Meet Buoyant Ventures, a female-led fund boosting data start-ups in cleantech.
Show Notes Transcript

Amy Francentic from buoyant ventures talks about the investments into start-ups that use machine learning and advanced data analytics to foster new business opportunities arising with climate change mitigation and adaptation.   The energy transformation takes investors willing to invest in solutions making immediate impact and Amy shares success stories she has uncovered.

Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is ‘Insiders Guide to Energy’. 

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 | Timestamp | Speaker | Transcript

| 08:34.27 | chrissass | Welcome to another edition of insider's guide to energy I'm your host chris sass and with me is go-host Johann oberg yo on what's going on this week
| 08:42.94 | Johan | Great to be back again. Chris another week another interesting episode continue our talks around energy and and this case a little bit sustainability but it's interesting to see you know we can't always talk about the weather but let's skip that 1 but. Really interesting now to see the europeans coming back to business. You know we talked about our long holidays and taking a you know, according to americans and you guys 6 weeks off, but we don't but now we're back and we're full speed ahead. So it's been an interesting week and we're back in business.
| 09:17.31 | chrissass | I'm excited to have people back Obviously my day job I work in a commercial role so to have people to actually call and talk to in Europe. It's been fantastic because you know for a while the continent just shuts down but it's great to have people back. I'm curious about your opening statement I'm sure you didn't mean this. But what is a little bit of sustainability.
| 09:33.21 | Johan | No, but we we talked about sustainability on the show before you talked about okay is this a kind of a microt trend. Is it just a buzzword are we using it it I think it's taking over more and more and more we talked about c o 22 years ago sustainability is not only driven by the companies. It's driven by the investments. They're driven by the corporates and I think today will see a little bit of mix of both.
| 10:00.14 | chrissass | Yeah I have to agree with that. Our guest today brings a wealth and knowledge of what what's out there in the industry I mean she has seen what's coming I mean 1 of the reasons I'm excited to have someone in the investor space or in the front end space is people are pitching them. They're they're telling them what they want to do and and they'll see the innovation probably before the industry will so it's kind of exciting to see if she's as optimistic as we are about what's coming down the pipe. That's what I'm hoping to get out of this and then I'm also hoping to hear about their business because it's It's a uniquely positioned spot in the industry and I'd love to hear about how they're doing what they're doing.
| 10:34.50 | Johan | No I agree and and also what what are the companies that are out there maybe not the specific 1 but definitely the trends. It was quite interesting coming back to to my native country in Sweden we had a big state visit this week from the german president. And what was really interesting is him and the king did the usual roadshow that they always do visiting a large large amount of companies but the key trend this time was they were all sustainable. They were all talking about the new energy landscape so Scania the big truck company. Yes, they're going electric. North vat with their batteries. Yes, they were there. We talked about another brother ones even h 2 green steel which is another thing in terms of this 1 so the whole state visit and the corporate direction around this was around sustainability. So really really interesting but was not the core of today. So I think it's time to get our guest on board get her involved so with further ado and maybe apologies for my pronounciation but welcome to the show amy francetic from buoyant.
| 11:48.67 | Amy Francetic | Thank you, thank you so much for having me and you pronounced my name perfectly. Thank you johan um, you know what? you just said about Sweden I had a call this morning with um a swedish investor and.
| 11:54.76 | Johan | Thank you.
| 12:06.32 | Amy Francetic | Basically said sustainability is table stakes now for anybody raising capital in the pe world or the venture world. So they said that's such a requirement um throughout the Nordic region and I couldn't agree more and you know europe has been leading the way on all things sustainability and the us is. Hopefully gonna catch up and we've got some good federal leadership to to put in place some excellent you know policy tailwind so we can go a little faster but there's terrific leadership already throughout europe on these issues.
| 12:39.20 | chrissass | So I've starting with a question so you talked about sustainability being a part of an investment portfolio Strategy. What does that mean to your investors so you're out raising a fund or if you're out raisingising funds and you say hey we've got the sustainable Fund. What is meaningful about that. What is the word a buzzword these days or is there a definition that you can stand behind that's validated and proven.
| 13:03.37 | Amy Francetic | Well, it certainly is a buzzword that is for sure and I think you know this started a few years ago when the investors started to ask their large asset managers to measure what kind of carbon impact they had in their businesses and to. Fos some of the investments that might be more carbon intensive because even though a lot of folks were pledging to do better and to identify sustainable investments. They still had some pretty deep holdings in heavy emissions in you know, um. Um, oil and gas and coal plants and steel companies and and cement companies. Some of the folks that are the largest contributors to climate change and so there was a ah call for greater. Closure and this is starting to happen in the us and they're taking the lead from europe so the task force for climate-related financial disclosures really gained strength and momentum from a lot of the leading financiers around the world but really anchored throughout europe and now the Biden administration has. Pledge to adopt some of those same guidelines to require u s investors to identify climate risk in their holdings and to expose that risk to to give visibility to their investors about that risk and then when they make pledges you know that they have a. Um, a sustainable fund or an esg- focused fund then to make very specific promises about what that will include and what that won't include and then a lot of this has come from the lp the individual the institutional investor community because they're getting a lot of this pressure as well from their. Funders some of those funders are university some of those funders are sovereign wealth funds that are really looking to you know to have greater visibility because this is part of their overall mission and goal. So we're excited to see that some of the legislation will require this disclosure to be a little bit more clear. And a little bit more honest, um and it won't be good enough just to omit things they're going to want to be looking for investments that not only deliver impact but also really deliver financial performance. Tied to those sustainable goals and so we're super excited about that as well because we certainly think as an investor in the category by making investments in these companies that are helping with climate change adaptation or mitigation.
| 15:37.66 | Amy Francetic | That's the thesis of my fund of buoyant ventures. We're investing in digital solutions for climate change. So mostly software some hardware that either helps reduce emissions or helps us adapt to climate change and we're doing that because we think it's going to be financially successful. So. Not doing it to just make ourselves feel Better. We're doing it because it's going to deliver real financial benefits to folks over the years
| 15:59.41 | chrissass | So I think you went where where I think the the logical step would be is who we are. You started to to give a little bit of buoyant ventures and I was just too excited to get into the topic and I just dove right in but I think your business is pretty impressive in of itself. So Maybe we should step back. And tell us what buoyant ventures is and who you are.
| 16:20.93 | Amy Francetic | Sure sure. So so we're a new fund of venture fund I'm actually in Chicago illinois my partner alison myers is in denver so we're 1 hundred percent female owned. Um and we are investing in as I mentioned digital climate solutions. Basically we have the point of view that we have a lot of the technologies today to really address climate change and we need to get them in the market today. We need to invest in these young high-growth companies that have solutions that can be delivered Today. We completely applaud. Funders that are working on potentially very impactful ways to suck carbon out of the air or to reduce the carbon impacts of say some of the heavy emitters that I mentioned but those are very long duration development cycles and they require hundreds of millions of dollars to scale. We're investing in companies that have solutions that are available in market today and that will take tens of millions of dollars to scale up. Um, and these could be you know companies that are um, we're looking really across the energy agriculture. Built environment and transportation sectors and 1 of the areas that we're trying to be specialists at is this climate risk intelligence and so these are folks that are using data to drive some kind of decision making that will help reduce emissions or help improve adaptation. They tend to be software companies for the most part in some cases they're using hardware to collect unique data to inform their software solution and there's also a lot of companies that are financially um, coming up with new financial solutions new insurance products new ways to measure risk and financial portfolios. New ways to make infrastructure more resilient ways to measure the cost and the return on those investments to address the risks that they have so it's it's it's it's kind of like a ah lens of looking at all these great data companies and what they can do to help um reduce emissions and. Um, help us adapt to climate change.
| 18:30.57 | Johan | So so when when looking for these companies literally if we break it down to 2 1 is how do you find them which is 1 the first 1 that there's a number of them out there so where are and where did they find them and also secondly the background of. These companies where do they come from. Is it mainly coming out of the energy industry or is it now coming more or with convergence from maybe the digital side which not have the energy background. Do you see any kind of correlation. There.
| 19:03.68 | Amy Francetic | They're um, honestly, both of what you said for sure Johann they're coming from. Um so a lot of what's exciting is a lot of folks that have gotten advanced degrees in climate related fields. Whether that's a ph d in climate science or folks that maybe would have traditionally found their career path say at 1 of the federal agencies are now joining climate Startups. So that's a really great thing is all these great. You know people that got doctorates in climate or glaciers. We. Just put in a term sheet actually for a european company and 1 of the founders has a ph d in Glaciers. So you know he's like so these awesome scientists that have been ringing the alarm bells you know for decades are now starting to start companies which is terrific. Um, in other cases they might be folks that are coming traditionally from the software world because a lot of these technologies are um, artificial intelligence machine learning data analytics and that is evolving out of you know, traditional software industries. In other cases they might be coming from the financial industry so they might be like we've been seeing a lot of great innovation of folks that came from either um the sort of stock and sort of hedge fund worlds or sort of debt worlds where you know risk. Measurement and underwriting or the insurance worlds lot of really cool innovation coming out of the insurance industry as well. So insure tech in this space is very strong and so folks that are used to consuming large amounts of data to sort of drive some kind of benefit or unique. Business angle are starting to turn their attention to climate and and insurance is a really important um category because they're on the front lines. You know when you see the floods that happened in germany the floods that happened here in the states. Um, just.
| 20:51.82 | Johan | T.
| 21:00.80 | Amy Francetic | Very recently hurricane ida and you know 8 inches of rain falling in a few hours in new jersey and new york and these are this is generating tremendous losses for businesses and and individuals and so the insurance companies are really trying to figure out. Okay, our old underwriting models don't work. What do we? How do we adjust that for the future for climate and what kind of insurance solutions. Can we sell people that are going to help them recover.
| 21:26.51 | Johan | So I think it's quite interesting just I curiosity you mentioned that the 1 of the companies that you were working with or at least at 1 of the contacts on glaciers and what would you would you say that there's a different kind of characters in these new companies compared maybe to to others. Are there. Motivated by different are they coming from different or is it still is it still kind of equal to to other kind of investments who are.
| 21:52.72 | Amy Francetic | No, they want to make a difference and they want to make a difference now you know and this is something that I so I've been in the space I kind of came to my personal epiphany. Um I counted as sort of like 9006 so many years ago I've been at this for a while. Um, but I just actually had a health scare in my life and and unfortunately recovered from that and then quickly had 2 2 kids and decided that I had been working in the high-tech industry before and I wanted to. Take my attention and work on climate solutions because the natural world was so important to me personally to my health to my spirituality. You know my mental health that I wanted to preserve it and I didn't like what I was seeing happening and I was listening to what the scientists were saying I'm I'm a big. Science junkie I'm not a scientist but I love hanging out with scientists I love reading about science I love I respect them I you know I want to you know, live my life kind of like being paying attention to the you know the facts and and even as we're seeing with you know covid of what's just happened like you know you got to listen to the scientists.
| 22:46.30 | Johan | That.
| 23:03.27 | Amy Francetic | Um, but anyways, so that was an epiphany that I had a number of years ago and determined to ah commit the rest of my life to working on climate solutions and um and there's a lot of people that were having that same epiphany at the same time and then there's a lot of um. Students that are graduating now taking classes or majoring in or getting doctorates in sustainability energy climate because. I think they just feel so strongly and so passionately that something has to be done and frankly they feel so let down by the leadership around the world. Um, and when you hear you know greta thberg and some of her. You know we have failed but the the leadership the adult leadership has failed the next generation on these issues and so. A lot of young folks. Are you know, focusing on this at the university are looking for jobs in this field. There's a lot of great talent coming graduating every year and so I think that when you so to go back to your original question sort of a long. Winding answer to your question about like why are folks doing this. They're doing it because they really deeply care and they want to have purpose in their work and they want to be working on solutions and then there's probably a good number of them that are betsy dollar signs too. You know they see well this is I can work on something that really makes a difference. It's good for the world and I can make a lot of money at this because this is going in this is there's going to be great financial upside in coming up with solutions.
| 24:32.91 | chrissass | Well I'm glad you had the epiphany because that means you're out raising a fund to help people invest in this I I was going to tell if you hadn't gotten to the financial upside I was going to say that no matter how altruistic you are. The the more I spend time talking to people that are doing startups and interesting things to get to a sustainable future or a net zero. Um I can't help but think of the the upside I came from a technology background and I lived through the technology boom and we didn't have a forced deadline with with the. Planet and the scientists saying if you don't do things they won't do that. So imagine compressing that tech cycle disorder. There are so many interesting companies out there. But my question to you is do you invest in the people or the technology. So you're an early stage investor I think right? So you go there. Are you looking more at what they have on the truck today or what the potential the individuals that make up that team bring.
| 25:31.55 | Amy Francetic | Well, you know I mean so I don't want to take a lot of technology risk as I mentioned because I want these solutions to be able to go into market right? Away. So it's mostly a speed and scale issue right? We're looking for solutions that can be deployed today and that can be scaled up. Rather quickly and with with not you know an enormous amount of capital. There are folks that are working on these long horizon solutions they may have ah more capital to deploy. They may have a longer time cycle on their funds. So they're able to wait for things to develop over sort of 1020 years but we want really things that can really go to market and and and have an impact in the next call it. You know 3 to 5 years is what we're looking for so that we can invest our money now and then exit in the sort of you know, 5 to 7 year timeframe um but that means that you've got to have great. Leadership too. So we we will. We care a lot about the solution and that it is a viable solution that it can compete. We will do some diligence and some work on the technology. We'll call would like it if they have customers so we can talk to the customers and hear what they like and they don't like about it. We also like um to know that the company is very customer focused and so sometimes what we'll do is we'll introduce some of these companies to potential customers. Before we decide whether to make an investment and then we'll listen to listen in on those conversations and we always learn something about what the customer wants and needs. But then we also get to see how well the ceo or founder hears. The customer interacts with the customer are they really listening to the customer because what you always have. Um, at the with these early stage companies are folks that have fallen in love with their solution and they may not understand what headwinds or even really truly what problem it's solving in the marketplace they may think it's solving 1 problem over here. But the real problem is over there so they might need to make some adjustments to the solution in order to solve that problem and it's really important for them to be customer focused and so that's something that we try to assess in the leadership before we make an investment decision and kris you just asked the average age of our ceos. Um. So we you know I would say the average age is in the the sort of call it mid thirty s so not not not really really, young you know not super young folks. That's kind of a little bit of ah, a startup myth.
| 27:57.17 | chrissass | Um, so pretty young.
| 28:06.55 | Amy Francetic | You know that all of these amazing ceos are like 25 or 21 or didn't go to college I mean that certainly happens and there's lots of good examples of Mark zuckerberg and other people sergei brin and others that came you know left Stanford to go create their companies. But for the most part these are folks that are um. Probably starting a company after they've had some really relevant experience in the workforce or maybe they have um, started um, a company after failing which is honestly really great. You know if you started a company and you failed and now you're. Um, and as long as you didn't do something illegal or fraudulent or evil you know in that course of that failure. It certainly made you a better more experienced ceo so that when you take another run at it. Um, you're going to be a little bit. You're going to be Smarter. You're going to know where some of the the potholes are you're going to know where some of the landmines are and and if you can hire a team that maybe work with you before so that you can bring to the company some momentum from a hiring standpoint and maybe those are people that you worked with in the past so I would say that that's something that you you have in your sort of late twenty s early thirty S more often than not and not to say that we're ages about this at all or you know a lot of great ceos that are also hired to work alongside founders. Um, to lead a company who have more experience some some more business experience. So folks that are older that are brought in a lot of times after a larger round of funding so that they can bring their management skills to the company and they can bring some of maybe their their relationships. From a sales standpoint to the company that they have you know worked really hard to earn over their their decades of experience.
| 29:53.25 | Johan | So in terms of the people which is obviously an important part as you mentioned and not being an investor myself with limited experience of of a venture fund. What is there a specific and especially on climate focus. Otherwise I return on the investment I can understand. But. Are there specific kind of high level criterias when you when you assess a specific Company. You know these are the top 3 top 5 things that needs to be kicked in order of development to but to qualify into the perspective of of this because it's not just a financial return on this 1 It's actually also the climate part of it So is there. Any. In a way to say. Okay, this is the very high level assessment. This is kind of necessity. Otherwise we'll walk away.
| 30:35.62 | Amy Francetic | Yeah, yeah, yeah, so so we do we. We worked to create call it an impact methodology that we use to assess all the investments that when we find a company we will. Sort of run it through our impact methodology and we have committed to our fund to deliver impact along the lines of 7 of the un sustainable development goals and so we're looking for companies that will help us deliver that impact. And then we will understand sort of where it fits and every company's different. You know they're they're not 1 size fits all like some company 1 investment that we have so I can talk about a few couple of examples to give this to illustrate this but 1 company that we invested in last year is called raptor maps and they actually spun out of mit. Nikil and eddie are the founders there and they're using machine learning software to analyze drome footage that is captured by flying over large scale solar systems. Ah utility scale solar arrays and they analyze those systems and deliver. Suggestions back given the phone the the drone footage to make suggestions for improving the output from the solar panels. So it might be suggestions for cleaning vegetation management to manage shading repairs they have thermal sensors on these drones that can understand sort of which panels. Um, might need repairs and then those improvements can actually reduce the cost of the solar power it produce more power so that ultimately it's optimizing those solar panels for better output. So we we count that on the mitigation standpoint so they're helping to reduce the impacts of. Of climate change becausere more solar energy is going to be produced as a result of raptor maps's intervention with their customers and then we measure that you know we have a calculation for that in their case of how does that compute to how much carbon can be saved based upon how much additional solar power. Um, is created based upon their their customers using their solution. So that's 1 example and that's in the sort of climate mitigation category on the adaptation side is a little bit harder to measure. Um, and there are not as many standard. Um, guidelines on this There are starting to become some better guidance on climate adaptation. But 1 company that we invested in that we are going to be announcing soon is a company called storm sensor and they put sensors inside sewers and then they have a software platform that gets.
| 33:16.37 | Amy Francetic | Every five minute information from those sensors and helps people that are managing the water infrastructure make better decisions especially during big storm events on how to adjust their management of the water infrastructure to avoid urban flooding and also to avoid releasing. Sewage into the waterways which happens a lot I don't know how often this happens in europe but it happens a lot in the us and some of the older combined stormwater sewer systems when it rains a lot. They start to they they get overwhelmed and they release sewage into the lakes and rivers which is really obviously a bad thing. And when you see urban flooding people don't realize that a lot of that is sewage mixed in with all the rainwater so you definitely don't want to go peddling around in it. You know and and walking through if you can help um you can help it so um so their solution will help you know reduce urban flooding. Um, and then the other thing that is really good about their solution is um at the coast a lot of what's happening with the seas rising is the sea water is starting to infiltrate the city water infrastructure. So the pipes under the cities on the coast are full of sea water. So it doesn't take very much in a rain event. It doesn't even have to be a big storm for there to be floods because there's there's seawater in those pipes and that's a big problem for a lot of the cities on the coast so they can give you better visibility into what's happening in those pipes under the under the city. And that's in the climate change adaptation category. So the more cities that are deployed the more people and populations that they cover the the better the impact can be around reducing urban flooding and then the more you know in some cases these are loss of lives you know in certain instances so we can measure kind of like safety and health impacts. As well as environmental benefits of using their solution.
| 35:06.86 | chrissass | That's pretty cool I I see the internet of things I I know that yo yohann are gonna be talking to a company that uses sensors coming up to to manage the gas networks and things so that that's a pretty exciting use of the technology your your first example. Coincidentally. Lines up to a guest. We're having on that has a similar concept. They have a drone company that uses ai to monitor solar fields or company out of denver and that leads me to wonder how crowded are the space. How many is similar I mean it's very similar on paper I'm sure there all the devil's always in the detail. But how crowded those spaces how many of these ideas are coming across your desk that you know if you if you see a Hundred pitches. How many of those are similar and would you fund multiple competing because the industry is so big and growth is so big. There's room for a lot of competition would you fund things in your portfolio. There are similar.
| 35:58.40 | Amy Francetic | Um, ah we would. We would definitely try not to fund direct competitors and you know that is always our intent because we're trying We don't want them to be competing with each other for customer contracts because what we're trying to do is help them win those customer contracts so we would hate to have them. Have them feel like we were helping 1 over the other Sometimes what happens is they move into each other's space over Time. You know so like you start out with 1 kind of approach and then they start to cross over so it's not always possible to ah completely avoid that but we wouldn't start from the beginning investing in direct competitors. And I think that you ask about how crowded the space is um is getting more crowded. That's for sure So like you know, um, the and there's getting to be some consolidation and some of these bigger investors are coming in so like the hedge funds are coming in to do venture capital and they're sort of anointing winners. By giving them very large sums of money you're hearing about um you know Tiger Global and Cotu and and Vista and some of the other investors starting to move into the venture space and writing very very large checks and they're um, you know in in that case that does give a. Whoever is got the most capital can now go on sort of a buying spree and kind of you know in in certain cases purchase competitors that might be complimentary to them or will help them go faster and scale up faster and so you know we are I mean I Guess our bet is that we see this Space. You know. Expanding and increasing in Values. So Even if we're making a bet in 1 area and there may be multiple players that we're expecting that even in the course of the the growth of the sector and consolidation happening that it will still deliver a venture return for our investors because of that overall growth. So. It is really hard to know like who's going to win especially at the early stage. That's where you're really kind of doing your best to assess the technology and then really trying to understand if these leaders and these founders have what it will take to really um to grow grow quickly Because. You have to go fast. You know it's hard to go fast. There's lots of missteps you know hiring is really challenging now in the Us. There's a very tight job market people you know are very picky about where they want to work. They want to work at companies that care about employee benefits. They want to work at companies. Have you know, great upside but they also care about the culture of these companies and so that's also something 1 of the things that we do as a fund in addition to measuring climate Impact. We also care about measuring diversity and inclusion. So We're my.
| 38:48.23 | Amy Francetic | Partner Alice and I were 1 hundred percent female owned and we really insist that when a company decides to accept our capital that they make a commitment to implementing a diversity and inclusion policy to considering diverse talent for their their job openings to. Band and sort of cast a wider net to bring in folks outside of their immediate network so that they can start to build a really diverse team and that is important you know to us because we have ah you know we think Diversity drives Alpha drives better Outcomes. There's a lot of great data to support that. Um, but the other thing is it's very it makes it more attractive to folks to join the company too. They wanted. They want to work with diverse um coworkers and they it's ah it's an important thing to communicate from a value system to the potential recruits.
| 39:36.77 | Johan | which which I think it's wonderful and that old diversity is is is a topic of it own I think we could we can dwell down into that and in many ways 1 thing that was curious. You mentioned diversity. Of course you mentioned go fast. You mentioned culture a lot of these companies that you're funding are. Energy companies as we said moving into an industry where they probably need to work with some of the let's say the the legacy companies in 1 way or the other and with my experience and many many with us maybe diversity culture and go fast is not. The the first words you think about and in the legacy industry. So how do you see how how do you see that the combination here where where where they actually eventually need to work and and solving the problems together in 1 way or the other.
| 40:16.24 | Amy Francetic | Um, yeah.
| 40:26.20 | Amy Francetic | No, that's really true johan but I mean they they do need to usually deliver their solution by going in partnership with 1 of the and those are their customers. So their customers could be those very large. Um, you know, corporations or institutions or you know government agencies in some cases and so they're very entrenched and and they're they're you know I think a lot of the learning I would say from call. It. Clean tech 1 point zero you know in the um, the. 2000 s the 2007 a 2010 time period was the funding of a lot of solutions that were intended to disrupt the status quo and how hard it is to completely disrupt the status status quo in this case where you're really needing to deliver your solution. In partnership with them and so you um, you have to kind of figure out like how to work with them. Not how to blow them up or go around them whether that's a utility company or a big bank you know or a leading corporation or you know, um. So so that's so that's number 1 is knowing how to work with with the incumbents number 2 to your point. What's interesting. So 1500 corporations have made net zero decarbonization pledges and in order to meet those pledges. They are oftentimes trying to implement changes in their existing businesses. So reducing the climate impacts and carbon emissions of their core business you know and then as well as their supply chain and this commitment to working with diverse. Companies as part of their suppliers is is a definitely a growing trend so we just submitted a term sheet to a company that is 1 of the leading um organizers of a network of they've got seventy thousand suppliers around the world. Sell to big brands and retailers and they have had them fill out these very long questionnaires to try to um measure and rate their esg qualities so that these big companies can choose folks that will help them meet their goals. Help them meet their esg goals or help them meet their their decarbonization goals and the companies they do a lot of this compare and contrast between the different suppliers and and and and out onous way as well as when the ping customer might might be the big retailer can come in and and then see specifically who these folks are.
| 43:01.76 | Amy Francetic | But they can kind of show you as a supplier. So if you are you know you work and you make um you know, ah Pajamas so you you make pajamas and you can see like compared to other pajama makers. How well do you rank and rate on these different metrics and then this young company that we submitted the term sheet to will help you makes. We'll make some suggestions to you to help improve your score so you'll be even more attractive to those large corporate buyers of your solution and so yes, it's true that those large corporations probably are not leaders in these things but they are certainly now. Um, they have a preference for this. They are looking to work with vendors that will deliver that have these qualities that that rate highly from an environmental and social and governance standpoint and that by working with them will help the corporation meet their own ambitious goals. Around esg or decarbonization.
| 43:57.38 | chrissass | I think that that's important right? It was. We've you and talked to a number of companies and we've talked to a number of startups focused on esg and what it really means that that it's not just talk that what it's really there. Um I guess. Changing tax a little bit. What? what? I'd love to hear about is what kind of things you seeing in the market you gave us some examples of things that you funded in the past are you bullish about where we're headed are you are you seeing a lot of activity come in with exciting ideas that are actually as you say near term wins. So. Understanding that you're going into a gray field. You don't have a green field. You can't blow up the world and start again. We've got to deal with what we've got what kind of things are you seeing or what can you share with the audience because to me that's what's exciting I mean I see some really ambitious goals for 2030 out I see trillions of dollars getting pumped that way. We've had guests come on and tell us we're still about ninety trillion dollars short of the projects needed to hit net zero so is the technology and stuff really going to get us. There are you seeing a lot of exciting things.
| 45:02.60 | Amy Francetic | Yeah, yeah, so um, there it's going to require a lot of different kinds of solutions to to get us there. It's going to require a lot of political will and the mobilization of trillions of dollars of capital for sure. There is no 1 area to focus on like that's the challenging thing about this. Is what a sophisticated patchwork of technologies is required. So um, you know we are um, a couple of areas that we're bullish on so just to talk about this like what where we see tremendous upside. Um the natural carbon sinks. You know so natural ways to capture carbon in forests in regenerative agriculture in the oceans. Um, as opposed to and I know a lot of people believe that we have to look at some of the heavy equipment and more. Um, mechanical ways to suck carbon out of the air and there are some folks that are pioneering some solutions there but they are terribly costly and they won't really scale up without some serious government subsidy however natural carbon sinks are not very costly. And they do have an impact immediately and they don't require invention. You know so so planting trees and doing regenerative agriculture and spreading limestone over fields and improving the carbon sink qualities of the ocean. These are all things that we can do today and improve and make an impact in today. And from our perspective and our thesis. The reason we're excited about that is digital technologies are really critical to validating that that carbon is being sunk and that creating the marketplace for what we're calling those offsets so when someone makes a decarbonization pledge. They want to purchase. Some offsets to help them meet their goal because they've now made all these adjustments in their own business. They're asking their suppliers to be um, more esg favorable and to to reduce carbon in their own operations so that they can get into sort of their supply chain. But then they're still going to purchase offsets. So. It's really important for digital technologies to validate those offsets to to measure validate certify them to make sure we're not double counting them to make sure that they're high quality because if we see we see that there's going to be billions of dollars flowing into the Offset market. And if they are not high quality offsets then they won't deliver the result that we're all counting on you know so you have to make sure that if someone's doing regenerative egg practices that the soil is actually sinking a certain amount of carbon in order for the offset that they sell to be worth anything. So.
| 47:55.25 | Amy Francetic | There's a lot of room for digital technologies to play in that market and to prevent fraud. Um or to prevent. Um you know people from um, not even fraud just making mistakes you know and how they do this so. That's a really really important area of innovation. And that will um, buy us time for the great scientists to come up with some hopefully cost effective ways to suck carbon out of the air. But it's going to take a long time for those solutions to scale up and they're not cost effective today so they will require heavy subsidy.
| 48:25.93 | chrissass | So what kind of digital technology Specifically so are you talking about like verifying like blockchain type thing or there are there some other innovative things that you can share that that might show that you know you you planted more trees or you did X Y z.
| 48:40.22 | Amy Francetic | Yeah, yeah, yeah, yeah, so we published some research on this. Um, there are some companies that are using um soil testing. So so that's actually 1 of the most concrete maybe most reliable ways is you can actually sample the soil so there are companies that are sampling the soil. Um, there are companies that are using satellite imagery to um to analyze forests. So this is another big area so you've heard about a company called patchma and there's others that are in this category that use satellite imagery to analyze forests to understand whether or not the you know. What are the what is the age and the growth of the trees that are being planted it Monitors monitors those plantings over time so that we can make sure that if people are selling offsets related to planting trees that those trees are not being cut down you know and that they're growing and that they're delivering a certain amount of carbon benefits and they're doing that with satellite.
| 49:36.31 | chrissass | Very cool.
| 49:38.31 | Amy Francetic | Footage so satellite imagery is really an important. It's an important technology in the course of climate intelligence. It is getting very very sophisticated very high resolution. It. It still has limitations. It is costly to purchase it. And and sort of frequent intervals and it is the resolution in some cases is not necessarily sufficient to prove in the case of regenerative agriculture the carbon sinks but you could imagine taking pictures of forests and you can yeah you can kind of measure like how big those trees are and if somebody's cutting down forest us or not so. So there's ways that satellite imagery plays a really important role in this and then in other cases people are flying planes or like we said drones over certain areas if you wanted to get closer to the ground and a little bit higher resolution then you would need to use a plane or a drone to capture this footage but those are a few different ways to measure this. Um, and and folks are trying to figure out now like what combination usually it will end up being like an actual sampling if it's in ah if it's an agricultural solution a sampling of soil in combination with something at the. Plane or satellite level and the soil becomes sort of like the um ah tunes it tunes the what they're learning from the satellite models and sort of validates it um excuse me sorry turn off my phone I should have done that before. Um, but the ah the yeah, a combination of those technologies is honestly the best because um, the Earth science kind of the the satellite and the geospatial solution is very scalable but the soil sampling is very accurate.
| 51:20.11 | Johan | I know we're we're coming up a little bit on time but I have have some things I really want to throw out there. You mentioned a lot of times in terms of the digital technologies and and in my experience I worked in iot and I worked in a lot of different I sectors and really when we talked about digital technology. We talked about scale. So how can you take the the technology and scale it. But there is a challenge within the energy industry and that is that it's also regulatory and it's also geographically different. So so how do you see this. Access an opportunity or maybe even a challenge where you where you have a digital technology that might work very very well in 1 country but scaling it into other due to other factors that is really not technology drivenve is that do you see those as a challenge or is this just a temporary thing that.
| 52:09.33 | Amy Francetic | Well I think that's a real important quality of these startups to know what their Go-to-market Strategy is and what geographies are the best ones to start with because you've got to be able to focus initially on some geographies that are going to deliver enough.
| 52:09.77 | Johan | Could be changed.
| 52:27.85 | Amy Francetic | Revenue and growth as a business to allow you to become you know to scale up your solution and become successful and hopefully help you raise that next round of capital while other markets mature you know or adopt some of these solutions and that's why we're seeing such great innovation coming out of europe you know when you're looking at sort of carbon accounting. Um, carbon offsets. Ah you know risk Measurement. There's a lot of great technologies in europe because they've been developed alongside favorable regulations in some of the european countries and now they're coming to the us because they're finally seeing these signals these market signals. That the us will be a good market. Um, and that there will be a you know good uptake here in the us. So that's that's an important consideration is that folks really understand sort of their market and their geography and that they don't get too caught up in being able to be everywhere. You don't have to be everywhere. You don't have to be global. As ah as a young company. You really have to build a strong business to get yourself to a certain point that will become attractive for some other companies to help you go to to go the distance and so it's very likely these companies will sell to a large incumbent over time who will help. Buy them because they've got revenues. They've got a solution that they want and then they will help them go global so you don't have to be global. You don't have to plan for world domination. You've got to be able to build a successful business and in our case, you know we're investing in companies when they have about a million dollars or so of revenue and we're. Trying to get line of sight to them growing to 20 million dollars of revenue and when you hit 20000000 dollars of revenue. Especially if it's recurring as is the case with a lot of software companies and digital companies. Um, then you are very attractive. To larger players. So whether that's folks that will do very large financings or maybe will help you get to the stage where you can go public or other companies will really want to see this business become part of their own business. So so that's what's most important is you've got to. Target your geographies very carefully so that you could see that path to growth.
| 54:34.99 | chrissass | Ah I think the advice you're giving is is awesome. So there's there's a number of people listening I'm sure that have aspirations of having a tech startup or something in the energy space. Unfortunately we are at the. Top of the hour for our recording. So we're running out of time for the show I was fascinated by the use of satellite and soil sensors and all that that's just an amazing opportunity with basically cots. What's on the shelf kind of technology that you can purpose to do something amazing. That's exciting that you're finding opportunities to invest in companies like that and that you can raise a fund and help bring that technology to Market. So I really appreciate you joining us today I've had a great time on this show. Do you want to have any final thoughts thoughts today. Do you want to share with the audience.
| 55:24.47 | Amy Francetic | I Would just say that feel free to share my contact information with your viewers because if anyone is out there and they have a cool idea for a climate tech solution would love to hear about it and as we said we do invest in sort of these digital Solutions. So. Um, if you have something that doesn't fit our thesis. We'll let you know right away and if we can be at all Helpful. We're happy to point you in ah in a more productive direction. But um, you know I'm just I'm very inspired by the the amount of talent that's coming into this category. It absolutely does give me hope. And thank you gentlemen for giving me an opportunity to talk about buoyant and to talk about climate Tech I'm I'm really thrilled to be here. Thank you.
| 56:07.30 | chrissass | Well thank you so much for being our guest I Hope we have you back in the future to hear more because I could go on for a long time I Love to hear about some other things coming up for our audience you spent another hour listening to insider' guide to Energy. We Love having you if you enjoy the show as much as we do making it. Please get your friends to subscribe hit the subscribe button hit the like button and share the content.