Technology innovation and entrepreneurship play a critical role in addressing what is
one of the biggest challenges of our lifetime climate change.
Last year, successful technology entrepreneur Lance Uggla, established BeyondNetZero climate
growth equity venture focused on supporting high growth companies that are addressing
climate issues and driving solutions at scale zero combines General Atlantic's global platform
with leaders and advisers across the financial, industrial and climate sectors.
I'm delighted to have Lance with us today as BeyondNetZero CEO, is going to give us
some insight into its important work.
Welcome Lance and thanks for joining us.
Thanks Michael and it's a pleasure to be here today and get to present to you and I'm delighted
to tell you a little bit about BeyondNetZero to get started.
You mentioned we're a growth climate fund.
That's a very important part about our our mission in that we're investing in companies
that are, you know, beyond their conceptual risk and are actually growing growing strongly
and we're backing those companies and their entrepreneurs with minority stakes to help
them you know, progress their progress there because we've made five investments so far.
And when you think about BeyondNetZero, you should think about climate focus companies,
not infrastructure and not venture.
So we really are in that defined discipline, that General Atlantic has really you know,
set themselves up as a real leading private growth investor.
We're focused yes, where we're really focused on is BeyondNetZero.
We chose three kind of key themes and of course those themes have broad underlying swim lanes
that make them quite expensive.
But the three areas were decarbonisation, energy efficiency, resource conservation,
and finally emissions management.
And then the underlying themes that support each of those, right?
And Lance, you've had a hugely successful career in financial markets, leveraging big
data and you established IHS Markit for those who don't know and you sold it to S&P in 2020.
What is the intersection that you see between technology data and climate change and and
how how are you mobilising that for beyond that?
Well, I think what's really interesting is I look back through my career really from
86, all the way through to the present.
I think the omnipresent change agent at any point in time and probably that existed before
me and will continue to exist in the future is how technology influences the work that
we do, whether it's in financial markets, whether it's in a corporation, whether we're
we're a consumer business or a B2B business.
You know, if I look back over my career, you know, whether it was cell phones, spreadsheets,
the introduction of the web, whether it was object oriented programming, high speed computing
power, rapid retrieval and storage, then it became the cloud, then it became data science
and in the future.
I'm sure quantum computing will play a role in a lot of the things that you know, will
impact decisions and processes and innovation.
So technology has always been omnipresent in my career through financial markets, being
an info tech entrepreneur and now within the BeyondNetZero fund, you know, I'm finding
that the impact of technology, whether it's to an industrial process or measurement, whether
it's to, you know, new technologies that are being implemented, it really is an intersection
to everything that we're doing.
And so the skill sets of the industrialists and BeyondNet Zero with the tech entrepreneur
and the General Atlantic, disciplined growth investing really, those intersections are
are very important and will be a key component to our competitive advantage.
And to that point, just around you mentioned emissions measurement and and I'm interested
in your views around effective measurement, you know, it's hard to measure every tail
pipe, and and you've got this partnership with systemic and and I'm intrigued just given
your background around data, if you could talk about your partnership with them and
how also just around measurement, how do you see an effective way of measuring emissions
including scope three, which is such a big part of right?
No, that's a that's a good question.
And I think the first thing, you know, systemic are experts in climate consulting, they have
very deep expertise, several hundred partners globally and Jeremy Oppenheim really, you
know, stands out as one of the experts in the field in terms of advising construction
of measure measurement, standard setting and so for BeyondNetZero, what we wanted to do
from the outset is have that expert advice and make sure that we weren't marking our
own homework.
And I think that's a really important feature of BeyondNetZero.
This systemic relationship which is exclusive to us allows us to work with our investors.
The companies we invest in all of them need to set science based targets.
So they all have to be committed to climate, change and setting their own targets.
But the actual measurement of the emissions reduction potential, we want that done independently.
And that includes whether it's scope one , two or three.
We want somebody to put the the expertise and measurement to bear and then to advise
our team and of course, our LP's on the actual impact that we can we can create either directly
or indirectly.
Because some of the investments that we make may have a very small carbon footprint themselves,
but actually their impact to climate change in assisting others is quite substantive.
And then also, just obviously, the energy security topic is looming large for the world.
You talked about your four central themes before, has the energy security challenge
resulted in a change anyway, in terms of your focus and where you're spending your time?
Well, I think the actually the four areas that we're focused on all our have equal importance
in terms of our team and our forward, you know, building of a pipeline of potential
companies to invest in and a big part of what we do is building that pipeline, identifying
those great entrepreneurs that fit the themes of the strategy and then out of that you know,
mapping following, building relationships with and ultimately investing in some 20 or
25 companies over the next 3 to 4 years.
So the selection and that process is very important.
The companies, you know, regardless of what's going on in the, in the world, from a climate
change perspective and the impact of the energy crisis that the world is facing right now,
given the, you know, the war in Ukraine and Russia, that's a substantive, you know, impact
to supply and therefore the conversations have shifted of course in many settings.
But the ultimate goal of hitting that zero by 2050 remains reinforced in COP 26.
It'll be reinforced again in 27 in Cairo and 28 in Abu Dhabi.
I think it's really important for us to maintain that our fund is going to invest in companies
that are going to have positive impacts to the climate agenda measured independently
and covering those four themes, regardless of what's going on around us, each of those
themes is very active.
So if you look at some of the investments we've made, they range from technology to
support supply chain efficiencies.
So that's 09 technologies, it's a company that's dealing with, you know, world leading
companies around the world, creating, you know, transportation efficiencies, or you
know, food waste management and these efficiencies all fall into that you know, the scope of
what the company is doing for others and very, very important.
Of course we've made investments in companies that are in vertical farming, in solar as
a service in Africa.
We've recently invested in a company that does sustainability ratings founded in Paris
called EcoVadis.
So a real, mixture that covers all our themes and each of those is incrementally adding
to the, you know, the importance of carbon reductions in emissions reductions.
Yeah, you mentioned the investment you made in Africa, Sun King.
Obviously the developing world is in dire need of these new technologies as well.
Is that a key focus for BeyondNetZero.
Taking these technologies to parts of the world where they don't have access to capital
or the ability to deploy well, you know, what's interesting is we're identifying great entrepreneurs
and those great entrepreneurs exist all around the world.
And it so happens that with respect to Sun King, great entrepreneurs that are focused
on Africa have a large business, you know, um, you know, more than, you know, 100 million
of revenue growing strong double digits and this company is bringing you know, the first
electrical appliance to millions of rural homes in africa and so all already they're
serving millions, but the target addressable market for a company like that is you know,
hundreds of millions of rural customers who are going to get there, you know, first lighting,
first, you know, plug's ability to charge cell phones, ability to do homework in the
evenings, ability to you know power other appliances.
And this replaces, you know, carrying kerosene and using kerosene for your needs and which
isn't as safe isn't as healthy and in fact, you know, has other other challenges.
So you know, for us there, that's just a great entrepreneur, great investment that happens
to be in Africa and serving the needs of a developed economy, we could make five investments
like that, or 10 as long as they fit the theme of the overall portfolio.
And so, you know, to date, we've done one European investment, one African investment
and three investments that are, you know based out of North America.
And that doesn't necessarily have to define the next 20 investments, so we really are
focused on, on finding those growth companies that need our capital and I hope that a good
percentage of them are in the developing economies?
Great and Lance, you're a very successful entrepreneur yourself.
Can you give us some insight into what you're looking for in an entrepreneur?
What is it, you see so many companies, what is it that activates you or get you to the
point that that gets you to realise that this is the investment to back.
Right.
Well, I kind of go back to real principles in terms of entrepreneurship, so somebody
has to have passion about their idea, you know, I love to meet an entrepreneur that
is really passionate about their idea, so I think that's very important, I think that
no matter what we do in life, whether it's whether you're an entrepreneur or you're working
in a company or you're working, you know at a school or a consultancy, hard work to me
is still top top shelf in terms of you know, I need to be to drive a company and to drive
the success of that company and hard work to me is also disciplined and organised because
you know, it might take me 80 hours to do something, I call that hard work, but I equally
respect the person and I've seen many people in my life that I can do what I do in less
time and so I don't think hard work is always just time, but it is a committment to organisation
and discipline and then of course with passion and hard work, you have to have an idea and
you have to stick with it and you've got to get it from, you know, it's concept to its
first stage of growth and second stage of growth which are usually the venture rounds
and then as you come out of that you have a company that is hitting a tipping point
and needs a new type of capital and a new type of backing and that's where we come in,
that's gonna help with, you know, location strategy and the tech platform and leveraging
the content and data sets of the company organising the sales strategy.
You know, the digital marketing strategy becomes very important.
So it's in that next phase of growth where I think we can particularly help the entrepreneurs
we back and of course I want to you know, provide any any knowledge that I might have
learned myself and I can help our companies do better.
I want to do that.
So that's that's the going to be our magic formula.
Right?
And so when you look at defining success for BeyondNetZero, what do you think it will look
like?
I mean, you've got these objectives, obviously the time horizon around climate change, investment
duration and balancing that with the investor demands, how do you, how would you, what would
be success?
Well, I think that you know, I heard McKinsey say that, you know, the technologies needed
to really drive a net zero in 2050, you know, 90% of those technologies are available and
we need to use them.
Some of them are mature, others are, you know, in early stages, whether it's synthetic fuels,
whether it's.
New materials resource management, recycling, there's so many things that are available
to us today, that need to be implemented and improved and developed.
So I think for us, looking back, you know, in thirty-four or five years time, I want
to make sure that BeyondNetZero has participated positively in the agenda to get to Net Zero.
And that would be number one to that.
We backed some great entrepreneurs and help them deliver exceptional results, which will
deliver results in turns to the LP's that are back General Atlantic's BeyondNetZero
and ultimately have a lot of fun doing that, both with our own team that we put together,
which is exceptional as well as the the companies were backing and our relationships with the
broader General Atlantic team and so here we are, we're at the part of a journey with
a exciting path and one that I'm sure will be exceptional in many different ways.
And just just finally, Lance, I know technology valuations have come off a lot of late, but
as you mentioned at the same time, there's a huge need for investment in um in the energy
transition and particularly around technology, how do you view valuation for investments
in that context.
Right, Well, you know, to me, I look back to whether it was '87 , '97, 2002 dot com
2008 financial crisis or the current big market reset that we've seen here.
And each of those presents, you know, great opportunities for investing and identification
of companies that have, you know, substantive addressable markets, an opportunity to grow
regardless of the economic environment.
And so the companies that you know, we invest in, of course there's a different valuation
environment at the moment.
But ultimately what drives great companies is growing your top line revenue, looking
forward to profitable margin expansion, having an addressable market that you can organise
yourself for.
And when you put that together, multiples and evaluations will have, you know, various
points in time where they're either very rich or very cheap.
But ultimately great companies grow their revenues even done earnings and that's what
we have to focus on.
Fantastic.
Well Lance, thank you so much for giving us your time.
We could go on for another forty-five minutes very easily.
Thanks for joining us from London and all the best with BeyondNetZero and creating a
better future for everyone.
So thank you.
Great.
Thanks Michael, I appreciate you hosting me.