Transcriber: nono yayo Reviewer: Said Louksairi
I want to tell you why and how we need to reconstruct venture capital to tackle
the climate crisis and to build a regenerative world.
And I'm talking specifically about European venture capital.
In Europe, we are very strong in talking,
we want to become the first continent on Earth to be climate neutral,
and we do a lot for that.
We invest like crazy into climate tech R&D like no other continent.
Only on European Union level, we will invest until 2027,
thirty three billion euros into climate tech R&D, and we’ve done already here.
We have only on European Union level
invested already 58 billion euros into climate tech R&D. Adding to that,
more than 100 billion euros on national budgets and national level, France,
Germany, Italy, Spain. So we are top when it comes to investing into climate
tech R&D. And this is showing huge results.
One third of all leading research institutions and university
on Earth are European. Those who are relevant for climate tech
and 28 percent of all climate tech patent applications come from here.
And this leads to something else what’s great and fantastic.
We are number one when it comes to founding climate tech companies.
If we look at the energy space, energy companies founded in Europe, 363.
USA 243 in the year 2020.
And if we take a closer look
into battery companies founded between 2019 and 2021,
102 in Europe.
And if we combine U.S. and China together, they only have 80.
That's great because the opportunity is huge as never before.
Also we are talking of course,
about the biggest crisis humankind has ever had to tackle.
And it's difficult to talk opportunities about opportunities when you have this
crisis in mind. Still, the investment opportunity for
a venture capitalist is huge.
Also, because corporates are queuing to pledge climate neutral,
not only continents and countries want to become climate neutral,
but also companies like BMW, Siemens, IKEA until 2030.
So it’s already been eight years, and this for the big four
are talking about a multi-trillion market within the next 10 years.
And only recently, Larry Fink, the CEO of BlackRock, the biggest investor on Earth,
said the next thousand unicorns
will be in climate tech and he will be right,
because performance has proven over time.
We already once had an era it's called Clean Tech 1.0,
where mainly American venture capitalists invested twenty five billion US dollars
into climate tech companies that called clean tech companies,
and those companies today are worth more than a thousand billion US dollars.
I’m talking about the companies like Tesla, Beyond Meat, QuantumScape.
Very important is also to know that there was for a long time
a misperception that clean-tech was a failure, because in 2011
those 25 billion were only worth two billion, then only 36.
So we’ll talk about this valley of death,
that is longer for climate tech companies and for other startups.
Again, in a minute.
Also, when we look at the financial returns from year to year.
Climate tech companies outperform other startups since 2014,
so we can see there's a lot of reason to invest into climate tech companies
for planets and people, but also for profit.
So what happens in the lab shouldn’t stay in the lab,
but in Europe, far too often exactly this happens.
Only 10 percent of European venture capital goes into climate tech.
And if we compare this to other parts of the world.
China
invested that 20 billion US dollars between 2013
and 2019 into climate tech start ups. North America,
29 billion US dollars. Our continent leading in climate tech research
and development, leading in founding climate tech companies only seven billion.
So the gap is huge. And only recently there was a study conducted by
the Deutsche Energie Agentur who was the German Energy Agency,
part of the German Ministry for Economy and Climate.
They quantified the gap with twenty two point seven billion euros per year,
only for Germany.
So if you talk about a gap, think about this one.
And when we look at the capital invested into European climate tech startups,
it's more and more capital from Silicon Valley.
So more than a fifth already it's Silicon Valley capital.
So thank you, Silicon Valley for investing into European climate tech,
because we don't do at least not to the extent we should.
One of the reasons is the size of the funds.
In North America, we have 41 venture capital firms that invest into climate
tech companies. Big Climate Tech,
big venture capital funds with more than 100 million US dollars assets under
management. We in Europe have small funds
and only six of those bigger funds invest into climate tech.
So
we have to use this opportunity with a new approach.
And I’ll tell you the three reasons that have to,
that are the reasons why we are in Europe hesitating to invest into climate tech
and what has to change. So we need patient capital.
We need bigger funds and we need smart capital.
So patient capital, as you remember, I talked about the valley of death.
Usually, climate tech companies,
climate tech startups need more time to grow and to succeed.
So this for we need capital that has more time and we need more capital
because usually those climate tech companies have hardware components,
higher capital expenditure.
This for we need bigger funds and we need smart capital.
When I say smart capital, I'm talking about
the investment teams in European venture capital.
Those teams shouldn’t only consist of people who understand the business,
they should all also consist of people who understand the tech.
We need more chemical engineers, mechanical engineers, chemists,
biologists, nuclear physicists, physicists.
We need those people in European venture capital investment teams, so that
we have smart capital to invest.
If you should lead the climate agenda,
why do we let someone else handle the action?
Why? it’s time to get’s beyond talking. Let’s act.