Gregory Dewerpe – Noa

David Hunt (00:01.384)
Hey Greg, it’s great to have you on the podcast at last.

GREGORT (00:03.842)
Nice to see you.

David Hunt (00:06.235)
There’s lots of course, as there always is to talk around the world of what’s going on in the investment community in cleantech, but very specifically in terms of what NOAA are doing, I think it’s quite fascinating. So perhaps we can start with that because I think it’s probably about a year ago that the fund was renamed or rebranded from AOPropTech to NOAA Capital. So perhaps you can share a little bit of what was behind that name change and what’s evolved in the investment thesis and what’s the kind of primary focus now.

GREGORT (00:35.576)
So it was a long time in the making. think suddenly we went from a crop tech initially, which was really not very well thought through, but I had many things to think about as I was launching a new firm and raising money. We wanted people to know in what category we were playing immediately from the name because we were completely unknown. Hence the crop tech term very quickly. I think I was having issues with the

PropTech, which I thought was not a true reflection of what our mandate was, particularly as it continued to evolve over time. And I’ll come back to that. But also the AO, people didn’t know how to pronounce it. was, think, if you search AO online, I think there is an online retailer of electronics in the UK that’s well known. People didn’t know it AO, ANO. So it was long time in the making. And I think as we were…

closing our new fund last year. I just thought it was a good time to reflect on where we were, what the thesis was, really the evolution of our thesis from opportunistic prop tech to more broadly the built environment to really going beyond that, really in anything that’s physical and that can be improved in the physical world. And we just thought NOAA was an interesting

word because it kept the letter A and O from EOS, so was kind of a continuation. The way we’ve designed it’s a lot of circles, so really everything that surrounds you, the physical world. And I think it’s an easy name to remember and to pronounce. And I think people can give it different connotation as they see through. And I think that that was something that really was well received. We announced it during our AGM last year in June.

We had great reception. think it really corresponds our ethos and our brand a lot better than it would have been the case before.

David Hunt (02:36.581)
Yeah. I when you came on the scene, I was quite struck again, as you say, you were new on the block, but you made some really what I thought was, you know, some cool investments in the early stages. has the investment thesis evolved? Obviously that you’ve explained a little bit about the name and the branding, why that’s maybe evolved a little bit. has there been any real change in the types of businesses? And perhaps you can share some of the portfolio or some of the investments you’ve made just to give us a feel for where it is that you’re active.

GREGORT (03:03.342)
So I wouldn’t say there’s been a drastic change or U-turn. think it’s more in the first fund we tried a number of things that were more or less far from the core Proptech spectrum, more more hardware as we went along and realized that these are the things that we just believe can have a tremendous influence on the world around us. But also my worry has always been, we’re a newcomer.

David Hunt (03:11.077)
Mm-hmm.

GREGORT (03:32.11)
completely unknown, completely outsiders from the VC industry in a very overcrowded industry. are way, way too many VCs in the market. And we’re not saying where we should be there and others shouldn’t be there. There’s just oversupply of capital, regardless of who people are. And I think more than ever, there’s just a lot of consensus safe, that’s perceived as safe investing. And it’s always the same funds trying to black the same type of companies.

David Hunt (03:57.201)
Mm-hmm.

GREGORT (04:01.23)
and following each other. And we just thought, we’re going to have to do the stuff that’s less obvious, that’s maybe less in the alleyway where everyone wants to play if we want to be generating genuine alpha. We’re not going to generate alpha if we do what everyone else wants to do. And this is not to say we think we’re smarter or better. We need to be different if we want to have a real longevity in this business.

We can be different because we have an expertise, we’re specialized, and I think in itself it’s already a really good place to be as a young venture capital firm today. I would never want to be a generalist firm today because I just think there’s just no way you can get anywhere meaningfully as a young firm today, given how the big crossover funds are playing and how much supply of capital there is. Being a specialist is already a great differentiating factor.

You can build a thesis and have a differentiated opinion that you can qualify and quantify because of your expertise. And I think it’s a good, safe, it feels like a safer place to be in. I wouldn’t want to be a VC now having to back yet another VibeCoding app at 150 times ARR that’s not really ARR and everyone pretends it’s ARR and it’s not.

David Hunt (05:04.551)
Mm-hmm.

David Hunt (05:28.327)
You

GREGORT (05:30.094)
I wouldn’t know how to invest in those companies because something can scale from zero to a hundred million in six months, then what does that say about defensibility and all those things and customer retention? I just don’t know. But when you go and do harder stuff that we started doing in the first fund and that worked out for us, you get more confident. You get better versed at some of those things and you dig into some of those verticals that…

David Hunt (05:50.993)
Mm-hmm.

GREGORT (05:57.838)
were favorable to you because you also have more momentum and it’s scary when you launch your first fund. Like you’re scared to get it wrong. And it’s actually very hard because you should never think about the downside when you’re deploying venture capital. But in a way, that’s all you think about when you’re launching because you have all those people who’ve trusted you with hundreds of millions of dollars and you’re scared to get it wrong. So you have to really get past that. We were lucky that we navigated in 2020, 2021 really well, all things considered.

And I think that gave us the confidence to be able to say no to stuff when we didn’t feel like it, but also to double down on things that are not as of use to the outside because that’s the only way we can make our expertise shine. And so that’s what we try to do from backing hardware businesses to space businesses to many other types of companies.

credible transaction in the US right now. We’re closing one in you know, kind of drone infrastructure for weather modification, where we’ve backed amazing AI-enabled robotics labs for new material discovery. All those things, if you had asked me five years ago that we would even look at it, I would have said there’s no way that we would have accumulated the expertise or the confidence to go into those spaces. in a way we have, not to say that we are

We have won everything we’ve done, we’ve made mistakes, we’ve backed companies that we probably shouldn’t have, I haven’t played out the way we hoped for, but within all those different decisions that we’ve made over time, there’s been some really good ones that allow us to carry on and to expand the horizon in which we think about the world.

David Hunt (07:45.948)
Yeah, yeah. Again, as you say, some of those things wouldn’t typically fall within the previous sort of confines of PropTech that you invested in. at the moment, what I guess is the sweet spot in terms of ticket size, type of tech, type of company, what are the things that you’re looking for in those first investments?

GREGORT (08:02.702)
So, you know, our thesis around how to deploy capital as a specialist is we’re hopefully going to see most of the stuff that’s relevant to us, not all of it, but most of it. And we want to be able to back the best companies that we see within our space. That means we are able to write the first ticket in seed AOB. That gives us the flexibility to really not miss out on something because it really doesn’t fit in our pre-configured

That’s really useful to us. We’ll write typically ticket size from 2 3 million up to 15 million first checks, depending obviously on the stage. And then we’ll reserve differently depending on when we came in. Our idea is to have a certain amount of capital deployed by the time the company closes their Series B. Rather than think about the amount of ownership that we’ll have, I think

in a world where valuation are a bit distorted. think ownership can be an artificial metric to follow. And so for us, it’s been good to just think about, we have a specific amount in each round. Let us know that we have enough skin in the game and any given company that we really believe in by the time they reach Series B. And from here on, we can still underwrite, you know, five, 10, 20 acts, whatever it is, and that’s good enough for us at that stage.

David Hunt (09:29.735)
Okay, perhaps share some of the companies who may be better known or some of the deals which may have caught maybe more of the attention just to give the audience a bit of a flavor of some of the sort of types of technologies and types of companies you’ve invested in.

GREGORT (09:40.654)
Sure. It was recently announced we’ll add the series C to one of our existing companies called Passive Logic. Passive Logic is kind of the first fully autonomous building management system that’s using deep physics and AI to make buildings autonomous. And what that does is that reduces energy consumption by a tremendous amount, you 30 to 60%.

and obviously the cost associated with it by the same amount. And so that’s really interesting because our view is if you want to have an impact you need to find solutions that are going to be able to scale because they do much more than just reducing carbon emission. If you try to sell solution in the name of doing the right thing in the name of climate, well guess what it doesn’t work. It doesn’t work because

no one’s going adopt something just because it’s the right thing to do. They’re going to adopt something because it makes them more money, saves them more money, or make them more operationally efficient. And I think that’s one of the biggest issues we’ve seen with climate over the last few years, and that’s changing, which is that so many companies that have emerged that people backed because it sounded like the right thing to do, but the unique economics never made any sense. There was no economic rationale for the end customer to use it.

to adopt it and therefore it was only existing on an oversupply of climate capital or subsidies or government support that is no longer there in most countries or a lot less here in a lot of countries. So that’s typically a great example where passive logic is helping you transform your building into an autonomous intelligence system that’s much more operationally sound.

that allows you to do predictive maintenance, that allows you to have a full digital twin of your portfolio and to take really insightful actions on the asset management. And by the way, it allows you to reduce your energy bill and by the way, allows you to reduce your carbon footprint. That’s a great example of something that can scale. wrote our biggest tickets ever in this company as a fund after having been an investor for already five years. So it shows you that there’s nothing better in our view than to be

unfortunate enough to be an insider and have the conviction of an insider into writing, you know, a larger check five years into the company. That’s one that’s been really good. That’s another one we led, or co-led recently was Radical AI. That’s autonomous AI-enabled autonomous, sorry, AI-enabled robotics lab for new material discovery. So the idea is we’re going to be able to come up

David Hunt (12:16.795)
Yeah.

David Hunt (12:37.735)
Thanks.

GREGORT (12:39.392)
with new materials for a number of applications that are going to happen a lot faster than typical new material discovery and leveraging AI to good use for those things that are going to help transform entire industries. And the idea is to have the labs, the robotics lab directly connected to this engine that’s doing the research so that you can go and test out and spit out a lot of new iteration of a new potential material at a speed that’s never been

achieved before. And so we think that’s going to be critical in driving industry innovation forward across the board, whether it’s in energy, whether it’s in aerospace, you name it. So we’re very excited about that.

David Hunt (13:20.647)
Okay, okay. things that you wouldn’t typically put into PropTech, I guess maybe the first a little more so. Picking up on a couple of things, Greg, you obviously talked about the fact that non-dilutive funding, grant subsidy funding is clearly down significantly, particularly in the US, of course, for obvious reasons. And there’s a lot of talk that we hear of dry powder. You talked about oversupply of capital.

And the VCs that we’re working with are making bets and making deals. if you look statistically, I just saw a report this morning saying that VC funding was down to 2020 levels. just trying to get a view perhaps from yourself of why you feel, if that’s reflective of what you see and if it is why you feel that that might be the case.

GREGORT (14:09.356)
The VC funding drop that you’re mentioning is LP into GPs or GPs into companies? Or both?

David Hunt (14:19.431)
I think it’s both. The LP is again slower to liquidate or create funds or put money into the funds, but also then the VC is slower to deploy that capital.

GREGORT (14:30.154)
Yeah, look, think there is a couple of things at play. The VC funding environment from LPs is really dire for most managers, particularly the emerging ones. And it’s the bigger funds who are getting bigger. That’s number one. And so I think the headlines don’t really tell the full story.

If you’re a young emerging manager today, I think the graduation rate from front one to front two is gone from 40, 50 % to less than 10 % or around 10%. That’s a game changing number and that’s reshaped the industry, not necessarily for the better. mean, my view has always been, you know, that VC should be something where it’s about, you know,

David Hunt (15:16.391)
Hmm.

GREGORT (15:28.054)
craft and human relationships and smaller scale. It’s kind of an art or it’s supposed to be. And it’s not that anymore in most places. And the bigger you become, you become an asset manager, you’re not a venture capitalist anymore. But if it’s hard to build a new firm, like who’s going to be doing this in a more artisanal way, right? And I think we need that in the industry. So I think that’s a big issue.

Second is a lot of the funding from GPs into companies is dominated by AI, particularly in the generalist funds. And so you have on one side, know, verticals that are attracting a lot of capital that’s very competitive with the big well-funded funds are playing and that’s attracting complete frost. I mean, the multiples, the…

the way in which deals are done, the speed at which deals are happening, the lack of due diligence, all those things are worse than I’ve seen in 2021 right now. And then you have a whole other part of the market that’s completely ignored because it’s not sexy, not AI, not whatever that is, where it’s trading at historical low multiples and there’s just no availability of capital for those companies. it’s really a tale of two worlds and…

David Hunt (16:41.447)
Mm-hmm.

GREGORT (16:51.208)
It’s not easy to navigate today and I think the headlines or the averages really don’t tell the story. And if you double click on Europe and more specifically the climate space in Europe where we spend a material amount of our time, I actually worry quite a lot about that side of the market because what happened the last few years is pretty much anyone that was trying to raise a fund

label themselves as impact, Article 9, because that was the only way to attract capital. A lot of them I’ve raised from the more state kind of pockets, the EIFs of this world. And they end up with having raised more capital than they needed in a space that they were not necessarily kind of really focusing on to begin with.

David Hunt (17:27.335)
Mm-hmm.

GREGORT (17:48.04)
with a lot of restriction from the type of capital there is from. And so what you see today is when there is a company that’s ticking all the boxes that allow you to qualify for SFDR9, qualify for the more state LP capital, you have all those funds in Europe, because most of them would not exist without that state capital, let’s be realistic, that are bidding for those companies at crazy prices. And I think it’s…

in a way a lot more expensive than it is in the US because we have to face the reality that we can’t really underwrite the types of outcomes that we can underwrite in the US and Europe. So when I see a 80, 90 million valuation seed round in Europe, I just wonder what’s going to happen to the capital that goes into that company because the statistics are not in your favor.

And clearly folks are investing in it and pushing the valuation because they have to tick the box and because there’s so few companies that they can do given how restricted they are with the type of LP capital they’ve raised that they just do it in a way to logo shop. And the valuation is not a reflection of the value or the potential. I worry a lot about that because there’s a whole part of our industry in Europe that’s on life support from the state LP capital.

David Hunt (19:04.731)
Yeah.

GREGORT (19:14.347)
And I wonder whether the state capital should be used, should be put to better use instead of funding other companies that shouldn’t be funded just because, you know, there is non-dilutive funding or by funding VCs that maybe shouldn’t be funded or that would never get funded in the US or elsewhere, but they get funded in Europe because they tick the ESG box, they tick the EU box, they do all those things.

David Hunt (19:41.627)
Hmm.

GREGORT (19:41.992)
And we are distorting the free market in Europe in a way. And I think what makes the US very strong is its ability to fail and succeed very fast, which we don’t really have in Europe. We take a long time to fail because we can stay on life support for long time. And we take more time or longer to succeed because of the intricacies of the European

markets. And so as a result of that, the recycling is a lot slower. I’m not saying it’s not happening. I’m not saying it’s not getting better, but it’s still a long way away from being fully efficient. And so I think a lot about those things because I see that there is a vicious cycle of the source of capital, the strings that comes with it, and how it impacts the behavior of capital allocation.

David Hunt (20:39.111)
There’s a couple of things there that actually jumped out, one of which was the zombie companies. So we’ll touch a little bit on your thoughts there, but also just that thing about Europe versus the US. again, I think it’s due to go into Brussels in December for the Clean Tech for Europe summit. I think it was last year we were diving into the Draghi report, which was around how to make Europe much more competitive in clean tech, but more tech more broadly. And again, that does seem to be…

typical of Europe. Not a huge amount of change, a lot of conversations, a lot of good ideas, but not necessarily a lot of change. again, maybe you can evolve your thinking there in terms of how and why we’re still struggling in Europe to create some of these real scale up organizations, why we’re slow at producing unicorns and why, yeah, what those differences are. Because again, the US landscape clearly has changed, but it still seems to be a different playbook than we’re playing in Europe.

GREGORT (21:39.602)
I I need to be careful when I say because there’s this whole make Europe great again movement and everyone’s trying to be super enthusiastic and I think that’s great and we need more of it. But we also have to be realistic. I think we should stop comparing ourselves with the US. We can be our own thing. I don’t think we’ll ever be able to be like the US just fundamentally.

They are the ecosystem, the way people work, the intensity, the markets, the pro-business environment. We just can’t replicate a lot of it. That’s the reality. And that’s okay. We have great things going for ourselves. We have great talent, great academia. We have more and more interesting entrepreneurs that are more experienced. The ecosystem is maturing in Europe. So I think that’s…

creates better momentum, but we’re still far away from the US if we want to compare ourselves to them. I think we just have to look at our own backyard and try to be the best version of ourselves that we can be instead of trying to be like the US and just continuously failing at being like them. And so I think we need to look at what we have going on for ourselves and we need to look at the stuff that is getting in the way. I think what’s getting in the way is, I think we have a

a European Union framework that’s not really working. We don’t have an homogeneous kind of policy making and kind of, it feels like every government is trying to do their own thing. And I think that gets in the way of building businesses that can get very confusing for someone who’s particularly trying to build a business in climate where you have to deal with regulations and whatnot. I think those things can be…

can be detrimental to scale and speed of adoption. I think we need to tone down on regulation overall. And I think obviously we need to be more confident in ourselves. I just feel often there is a lack of confidence in Europe. I see entrepreneurs who are thinking about the downside before they think about the upside. And that’s not always their fault. I think we have a culture in Europe where if you fail, if you dare failing, no one will give you money again.

GREGORT (24:04.139)
In the US, if you fail, people will jump to give you money because they’ll think you’ve learned very valuable lessons. And I think this whole fear of failing is really hampering our potential in Europe. And VCs are also responsible in their way because we are sometimes responsible for that, which is we try to underwrite the downside. We’re not in the business underwriting the downside. We’re in the right.

the business of trying to think about how big the upside can be if you back the right people in the right sector. And I think too often, particularly, you know, maybe when you have LP capital from the government, from the state, that tends to be pretty conservative, you are not likely to really overindex on upside. You’re going to try to overindex on downside protection. And I think those things trickle down the system and create a culture where we are satisfied

too quickly, we’re not ambitious enough to go the next step and we get worried or scared or in defense mode also too quickly because we want to preserve what we have and we’re scared to just try harder or try bigger. And so I think it’s a cultural problem first and foremost. And I think there’s a new wave of entrepreneurs, of VCs, of folks who have seen what great…

greatness looks like, we’ve seen what success looks like, even in the US and are trying to bring that work ethic, that mentality into Europe. I’m hoping that, you know, that brings some momentum. But that would be really my thing, which is let’s stop looking over there. We’re not gonna be them. And we shouldn’t try to be them. We should try to be ourselves and focus on what we bring to the table, but just instill better work ethic.

David Hunt (25:44.23)
there.

GREGORT (25:58.142)
better ambition and self-confidence.

David Hunt (26:01.223)
Yeah, and there’s two key things that I think I should say, one of which is don’t compete, but just be the best version of yourself. I think that resonated a good deal because Europe does have, I should say, so much to the author. And the other thing is about this failure thing. And again, I did this, I had a solar business. I started in 2007. We did triple digit growth for the six years, multimillion pound revenues, hired 50, 60 people. And then we crashed, basically, we crashed the company. And then when I was trying to…

create Hyperion 14 years ago, was kind of like you were at Pariah. It’s like nobody would talk to you because you were part of this thing which didn’t, you know, on many levels it succeeded tremendously well and was pioneering. on the, you know, when they came down to it, we crushed the company. So yeah. And, and, and again, you hear and see other European founders who’ve been through the same kind of thing. You have to almost kind of justify or find blame for, or an excuse for the failure other than that’s just how capitalism works, right?

some fail, some succeed. Yeah, so I think there’s definitely some lessons there that we need to just get a little bit more prepared for failure and accepting that it should be, as you say, the lesson learning, they’re the hard lessons, right? We’ve learned so much in that process. Maybe we can evolve that a little bit into this thing about the zombie companies, because you talked a little about keeping companies alive for too long, which hinders the recycling of both talent, which I’m interested in, and capital. So perhaps you can share a little bit more what you think around that.

GREGORT (27:27.282)
I think in Europe we have companies that are able to tap into a number of non-dilutive funding or almost interest-free loans from government entities that just keep them going for decades or years and years and years. And I think that’s tricky because you need to have a free market and you need to have companies fail and succeed.

as fast as they can because if they fail, it’s Thailand that’s recycled into the next endeavor, the next one, the next one. And entrepreneurship is about just iterating until you crack the code and you kind of find your place in the market. I just feel often you’re enabled just to stay average and idle for too long.

There was an interesting stat that I came across earlier this year. I don’t remember the exact number, but I think 80 or 90 % of startups in France have government money. And I probably think that a similar number of venture capital in France has government money. That’s insane.

David Hunt (28:47.771)
Hmm. You can look at that maybe two ways. There’s obviously it’s good that the state is trying to play a part, but it’s equally as you’re alluding to, they’re actually counter counterproductive.

GREGORT (28:58.258)
I think we should try to, and I don’t claim to have the winning answer, but if you look at US, Europe, China, how government is involved in the startup ecosystem, US is kind of the extreme end of the spectrum, which is free market, private capital, back the best people, made the best win, and you promote a great culture of doers and change makers that are

are finding capital somehow in the market from private sources. And the government is just involved in making it very easy to build a business and to scale the regulations are super pro business. And so that’s one way. You have China, which is quite different, which is they decide on a vertical where that’s really strategic for the government and their long-term vision. They’ll back 20 or 30 entrepreneurs.

doing that. And then it’s like Hunger Games, made the best win and they don’t get involved anymore. And it’s just, you know, let the best talent, the most innovative company kind of win the race. And then we have Europe where we just give money to everyone. Doesn’t matter. The bar is pretty low. And therefore, the best companies face unnecessary competition from those ghost idle companies who are just occupying part of the market that shouldn’t really be there.

It distorts pricing dynamics. It creates a false perception of unit economics because you have those grants, all those things that sometimes can pollute a little bit, like really the true business making. And I think there’s probably a better way for the government to be involved, not by just backing everyone and every company, but maybe by centralizing purchasing.

dynamics like through the government becoming a big customer of the best product. So if you build a startup and you have a great product, you’ll get a big contract from the government. And that’s great because that’s money that’s flowing into the ecosystem as opposed to just throwing money on everyone and just keeping all those people alive for way too long. And I it may sound a little bit harsh when I say it, but the reality is I don’t think there’s anything worse for an entrepreneur to be stuck in the wrong business forever.

GREGORT (31:24.317)
Like let them free them up, let them fail, learn, pick them up and start again somewhere else with somebody else and another company again on their own, doesn’t matter. But I think the power of this iteration is really strong and we’re somehow not letting it happen at full speed in Europe.

David Hunt (31:46.084)
Yeah, you know, one of the things I see, and again, without sounding harsh, because again, the reasoning to some degree is valid, is this kind of trying to, I guess, maintain jobs or protect companies to keep jobs. And of course we want people in jobs and that’s critically important, but it does create that situation where you have companies who are too debt laden or too lacking in innovation to grow, but equally not quite at the state of failing or supported on this life support, perhaps as you put it. And then it’s a waste of talent because there’s some

really good people in those organizations, which could be doing better things elsewhere. But also from what you’re saying, you know, as you say, other companies are competing against these people in the world where margins are quite small between success and failure. can just as you

GREGORT (32:27.881)
And those people and most of those founders are staying alive not because they fundamentally believe they have a chance to figure it out, just because they’re so scared to get to a conclusion where they fail because they know it’s going to be so hard for them to rebound from there given the negative cultural bias towards failure that we have in Europe. So I think it’s all interconnected. People are just holding on forever.

just by fear of failure, we’re enabling them to stay idle forever because of this government inefficiency. And I think that’s a tremendous part of the market that’s inefficient. If we can change that, if we can change how government interacts, if we can remove that fear of failing, suddenly the wheel, the flywheel goes a lot further and a lot faster. That’s my opinion.

David Hunt (33:23.835)
Yeah, nice. Yeah, it’s interesting. think you see, we spend a lot of time on LinkedIn, as I’m sure many do, that you’re starting to see now very occasionally a founder will make this post, you know, really sorry, we failed and they tell their story a little bit. But given the number of comments that fell, it’s still that underlying, you know, if you failed, you keep quiet about it, you pretend it didn’t happen, you find an excuse that it didn’t happen rather than acknowledging it and like you say, keeping the momentum or keeping the speed.

GREGORT (33:54.334)
I spent a lot of on LinkedIn. I think it’s a giant pile of garbage. Everything you see there in smoke and mirrors. mean, for me, the best example was we exited a company of ours. It was a really bad outcome. We, all investors lost all their money. And I saw some of the investors celebrating an amazing exit on LinkedIn. And you have to wonder like, you know, what has LinkedIn become? I think it’s…

I don’t think the best founders of VCs are active on LinkedIn. I think it’s not what it used to be and think the noise and it’s frankly like shocking LinkedIn.

David Hunt (34:37.637)
Yeah. But that reflects a little bit of society where again, everything’s smoke and mirrors. Everybody has to give a spin on something about who they are, this personal brand kind of stuff. I think that’s quite frustrating. And it does being, like you said, a of a showroom where nobody really tells the truth, but tells you what they want you to think. But I think that’s a broader thing than just licking.

GREGORT (34:53.545)
The thing to someone was no Facebook, no Instagram. I don’t think I’ve, I think I’ve posted once the whole year because I was, I had a gun to my head from my team to post something. But I think, I think it’s, it’s, it’s scary because we are in an industry that’s supposed to be about human connections. And I feel like we’re hiding behind this LinkedIn, like, I don’t know how to call it, but you know,

behind LinkedIn, it’s not genuine at all. Anything you read is fake, untrue, distorted. And I think I dislike it a lot because for a lot of founders, they are putting themselves under so much pressure because when you go on LinkedIn, you think everyone’s so successful, everyone is growing 100 % month on month, and everyone’s making a lot of money, and it’s not true. Everyone’s going through a tough time, everyone’s struggling, it’s hard to build a business.

incredibly difficult, there’s so much pain and suffering that go into building a business. And then you feel so alone if you check LinkedIn as a founder and you think you’re the only one who’s going through that. And I think just for that is doing a great disservice to the ecosystem.

David Hunt (36:03.697)
Yeah, yeah.

David Hunt (36:08.503)
I think it’s definitely down, it’s gone more down that path, but I pretty much can do social media apart from LinkedIn, which I need to use for work a little. yeah, I guess that’s a broader societal issue, but it’s an important one in terms of just, as you say, this stuff is really, really hard and quite often, more often than not, you’re going to fail and people just need to accept and realize that that’s how it is. that’s the, know, that’s the, I guess the appeal as much as the anything else for those who are entrepreneurially minded.

There’s a few things I wanted to discuss also in the conscious. We’ve spent some time Greg. One of these is around, and you touched on this before, AI of course is a big topic. It sucks up a lot of energy, of course, which is a big issue, but it also sucks up a lot of talent, sucks up a lot of capital. And there’s a lot of people who are, a lot of VCs is always in this me too, or I’ll have what he’s having kind of mentality of chasing those kinds of things. And I think you’ve spoken in the past about this little bit of that.

following the trend kind of invest in and where AI really will be game changing, where it’s just putting money into fake ARs and this kind of stuff. how do you see the present, because you’ve invested in some clearly, through the noise of AI a little bit at the moment?

GREGORT (37:22.131)
As I said, feel fortunate that we’re not the generalists who has to invest in all those AI application layers and stuff that is also… I’m not generalizing, but I think a lot of it is not very useful for humanity, right? Being able to post, generate videos that you’re going to use on your TikTok, great, but what does that do to our lives? What does that do for the next gen? And actually, if you think about it,

It’s consuming so much energy. I think in the US I was reading that energy costs are skyrocketing because of how much demand there is for chat, GBT and Sora and whatnot, all those stuff that is not necessarily that useful. When there is actually so many incredibly useful, potentially life-changing

endeavors that can be enabled by AI, whether it’s in healthcare or in energy. so we are lucky in a way that we’re focusing on the stuff in the physical world, which by design is going to be more useful because it’s going to impact us and our daily lives. And I like to say AI has never been more physical. AI is more physical than it is digital. There’s no AI without energy, water.

physical infrastructure, grids, all those things that are happening in the background that a lot of people are not even aware of. That’s the place where we invest. We invest in physical AI that is going to enable the cost to come down, that’s going to be able to potentially be applied to incredible discovery on new materials or the likes of it. And I think I always say the build world if we come back to that.

doesn’t need to become greener, it needs to become smarter. If you make it smarter, it will be greener. But that ability to transform it into intelligent infrastructure is going to be critical and AI is going to play an amazing role in it. And so in a way, AI is the pain and the remedy at the same time. It’s the pain that consumes a little more energy as a result of it.

David Hunt (39:44.028)
Yeah.

GREGORT (39:47.389)
particularly for those superficial application layers that are fun but are not really useful. But at the same time, AI is going to enable our physical world to become a smarter consumer, store a redistributor of energy so that we can be a lot more efficient when it comes to AI. And so it’s playing a role across the entire spectrum. And that’s where I believe there is tremendous value to be unlocked.

tremendous positive transformation that can emerge out of it. And that’s what we do. So I don’t have to worry about the stuff that is potentially more hype. Of course there is hype everywhere. I’m saying there’s a lot more hype in the more generic consumer facing AI applications. I would not know how to underwrite it. I would really not know. And in a way I’m glad that the businesses I back,

David Hunt (40:36.913)
Yeah.

GREGORT (40:41.512)
They take a long time to go from zero to one, one to 10, 10 to 100. Certainly it doesn’t happen in months or weeks or however it’s happening in some of the consumer stuff. I get more excited by those than I get excited by a company that goes from zero to 100 million in six months and potentially from 100 to zero in six months or so. Who knows? So yeah, we’re…

David Hunt (41:05.831)
Yeah, yeah.

GREGORT (41:10.866)
We are looking beyond the hype and I think there are really serious real life implications where I can be incredibly powerful and for me that’s in the physical world, that’s nowhere else. healthcare obviously, which I’m not an expert of, besides my own personal interests, but from what I see and what I know, it’s where there’s real difference to be made.

David Hunt (41:21.797)
Yeah, no.

David Hunt (41:36.454)
Yeah, absolutely. We’re working with obviously a lot of companies who are in that sort of grid, battery, renewable space where AI is really becoming quite game changing right the way from yield prediction through to actually physically managing the assets. yeah, there is a lot of frustration. There’s a lot of money just chasing stuff, which is clearly froth. But I guess that’s the part of the cycle. Maybe that’s a good way to end, asking you to get out your crystal board a little bit and just give maybe a little bit of how you see

the clean tech, climate tech funding scenario or landscape in the next couple of years, if there’s anything big you see on the horizon or any concerns you have in terms of… Because ultimately, we’re all doing this to get to an objective, is to decarbonize and to create a more efficient world and hopefully we have a planet for our children. perhaps in the next couple of years, is there anything that you see which will either boost or hinder?

This transition.

GREGORT (42:36.678)
I think a lot of people have been worried about Trump and the impact Trump is going to have on everything we’ve been working on. I actually don’t think it’s as much of a threat as people like to believe because in the end, if you are building in climate and clean tech solutions that are going to make the cost of energy cheaper, the cost of operations cheaper or more efficient.

you’re going to have a natural adoption, particularly under Trump administration, who is just looking at the economics of things. And in a way, that should have always been the case. And so I think that actually in the US at the time where the economy is booming, the infrastructure spend, excuse me, on the AI is just incredibly hot and it’s not probably going to go anywhere for a while, that lack

of affordable energy, the grid limitations, the need to adopt solar at a pace that’s kind of really hard to imagine, they’re going to happen not because they’re good for the climate, they’re going to happen because that’s the only way they can turbocharge the economy. And by the way, solar is probably the best source of energy or the cheapest one right now. And so in a way, doesn’t matter

you know, why people do things, what matters is the end result. And I don’t care about the reasons behind or the motivation behind clean tech adoption. I care about the adoption itself. And I think that’s an interesting one. And I am very hopeful that the more and more entrepreneurs, because there’s less funding in some respect, because there’s less subsidies, they are forced to build real businesses in clean tech.

whether unit economics are going to stack up with or without government intervention. And that people are going to adopt not because they are cleaner, but because they are cheaper. That’s for me the big transition in clean tech and how we’re going to have a massive wave of adoption. And whilst people are busy talking about how bad Trump is for clean tech, we should also look at what’s been happening in Europe and Germany where we’ve cut subsidies and we’ve destroyed

GREGORT (44:59.589)
an entire series of businesses who were building on the back of those incentives that have vanished overnight because we don’t have a balanced budget, because we have political volatility, because, because, because. And so I think we just need to go back to the basics, which is let’s build fundamentally sound and sustainable companies. The rest will happen naturally.

David Hunt (45:22.011)
Yeah, that’s I always thought about is just build better stuff, right? And whether it’s solar, whether it’s an electric vehicle, it’s just a better technology. It’s cheaper, it’s more efficient, it’s easier to run. So you could be the biggest climate denier in the world, but if it’s cheaper, hey, let’s go do it. So.

GREGORT (45:36.967)
Yeah, I like to say we shouldn’t build climate on altruism. Altruism is just not a way to build systemic change. And you see when people are struggling or when we’re going through an economic downturn, it doesn’t matter how well-intentioned they are, at the end they have to pay their bills. And if climate gets in the way of that, they’re not going to adopt it. So we need to build with that in mind.

David Hunt (46:01.447)
And that, I guess, comes back to making sure that companies are succeeding faster or failing faster.

GREGORT (46:08.292)
Exactly.

David Hunt (46:09.315)
Interesting, interesting. Well, listen, we’re kind of out of time, but Greg, thanks very much for showing your thoughts and ideas. It’s great to catch up and look forward to obviously pushing those out into the to getting some feedback from the markets or from the audience and also to staying in touch and seeing how your thesis and investments evolve over the coming years. But really great to this time with you. Appreciate it.

GREGORT (46:29.893)
Look forward. Thanks for having me.