Episode - 08 Transcript

[00:00:00] Danijel: The only thing we can do to reverse global heating is to reduce the concentration of greenhouse gases in the atmosphere. We need to decarbonize our economy and we will. And all those companies that will help us with will become the most valuable companies of the next decade. I think that's a no brainer. What's a no brainer for us is to invest already now in those kinds of companies. Well, we are founded in this decade to become the most valuable in the next decade.

[00:00:31] Waheed: This is the Innovation Civilization Podcast and I'm Waheed. My guest today sits in the heart of selecting, investing and scaling up technology that would undo the effects of climate change. The whole idea being- is to make the more sustainable outcome, the most profitable outcome, and only then will it become the most probable outcome for you? Daniel is the founding general partner at Europe's biggestdedicated climate tech venture capital fund called the World Fund.

[00:01:00] Danijel: Our focus is to basically get the concentration of greenhouse gases in theatmosphere decreased. We focus on those startups that are able to save at least a hundred mega tons of CO2 or equivalent emissions per year.

[00:01:15] Waheed: We also talked about the differences in investing in traditional venture backedcompanies like SAS software versus deep science, climate tech companies, the ones Danijel is doing.

[00:01:25] Danijel: The valley of death is longer for companies because you have hardwarecompetence, you have deep tech, and it's not a software e-commerce company where you can expect returns or a break, even after a year, two, three X, a bitmore time, but then the returns are higher.

[00:01:41] Waheed: We also briefly talked about the political realm in fighting the climate crisisversus the entrepreneurial realm in fighting the climate as well. And Daniel's thoughts on that.

[00:01:52]Danijel:  We don't want our companies to be dependenton regulations. I know. I've been there. If you know what's happening on yourlevel of regional, taxonomy, gas, even being declared green companies, thatentrepreneurs have to be successful without being dependent on regulations.

[00:02:07] Waheed: Wealso talked about what are the exact technologies that can help reverse theclimate crisis and the latest updates on where those technologies are in.

[00:02:17] Danijel:It’s when we put this filter on the technologies that they have to be able andhave the potential to save at least a hundred megawatts per year. And they gottons of CO2 or excellent emissions.

[00:02:27] Danijel: Then you have like 60, 70 technologies in two spaces that are relevant for us to invest in energy and food. Agricultural end use energy consists also of construction tech. So, building all sorts of manufacturing or industry and transportation.

[00:02:42] Waheed: That and much more coming right up on this episode.

[00:02:49] Waheed: Well, thank you, Danijel, for being on the Innovation Civilization Podcast. What a pleasure to have you here today?

[00:02:54] Danijel: It's a pleasure for me Waheed. Thank you for having me brilliant

[00:02:57] Waheed: At the start of every podcast episode, we want to know about the person who started the venture and a bit more about yourself.

[00:03:04] Waheed: So, can you tell us a bit more about yourself, your story, how you got into climate tech investing? I know you've got a very interesting background, sowould love to kind of dig deep into that.

[00:03:14] Danijel: Yeah. Thank you. Interesting background. Quite uncommon for a person like me to become a general partner and a venture capital founder - because most part ofmy business life I was a journalist with a focus on venture capital and startups.

[00:03:28] Danijel: Then after being a journalist, I was corresponding for the, as we called it yourvisual appearance of angle America, the German chancellor between 2012 and2017. And basically, only then in 2017, I started. Also in terms of consultingof venture capital and startups, in 2017, I started to work for Project A it's a huge, very successful VCcompany.

[00:03:53] Danijel: I lived in Berlin before starting the WorldFund - what today is the biggest climate tech VC in Europe.

[00:03:59] Waheed: Interesting. One of my cousins was talking about going to journalism and I waskind of dissuading him saying, oh, you got to limit your options. Today.Everyone is a journalist. Yeah, definitely. If you can get into venture andactually help build companies that suck CO2 from the atmosphere by being ajournalist, that's a good one. Let's get right to it. Can you tell us moreabout what you're doing right now and in terms of World Fund? Who you guys are, what youguys do and yeah. Give us the updates.

[00:04:26] Danijel: Our focus is basically what you have said - to get the concentration ofgreenhouse gases in the atmosphere decreased. So, we focus on those startupsthat are able to save at least a hundred mega tons of CO2 or equivalentemissions per year. We are very much focused on this indicator as we call itCPP, the ClimatePerformance Potential. There are two reasons. The first reason is the onlything we can do to reverse global heating is to reduce the concentration ofgreenhouse gases in the atmosphere. And, the second is we need to decarbonizeour economy and we will. And, all those companies that will help us with thatwill become the most valuable companies of the next decade. I think that's a nobrainer. So, it's a little better for us also to invest already now. Thosecompanies who are founded in this decade to become the most valuable in thenext decade. I think we'll achieve, I hope very much the word chief two thingsto make our investors happy in two. Without money to, in a way safe life onearth, I helped to save it. And so to make them even richer.

[00:05:32] Waheed: Yeah. Yeah, absolutely. So just having lots of stuff done pack there, but let'sstart off with your first proposition, your investment thesis of investing instartups, which are like, did you say it saves a hundred mega tons per year?It's a million tons of seed, right. Okay, fantastic. Yeah. As I was kind ofresearching for this episode, I mean, I didn't know this, but it was quiteinteresting to me that apparently every single year we're putting in. 60 giga,tons of CO2 into the atmosphere every single year. Right. Even if you guysachieve whatever you're trying to achieve, that's still going to be like asmall part.

[00:06:04] Waheed: Right? So you need others to do and pull their weight. Is that correct?

[00:06:06] Danijel: Yes. I'm happy that you use this number. 60 can gettons because of this 60 what's most times mentioned is those 40 gigatons of CO2and adding to that 10 gigatons of methane and other gases. This was onlyrecently discovered that in fact, it's 60 gigatons that's humankind emits peryear. I think it was a story by the financial times. Great research. They'vedone the right before the cop 26. Sorry. Now the question you asked, could youplease repeat

[00:06:32] Waheed: that? Yeah, so I was saying basically if you're doing like a hundred megawatts.And that's over what few decades, right? No, no, no. That's per year.

[00:06:41] Waheed: Per year. Okay, cool. Fantastic. So if it's a hundred mega tons per year, butwe're actually putting in the 60 gigatons every single year. So it's still asmall proportion, right? It's true.

[00:06:51] Danijel: But it's per investment and minimum. So, or goal is to save two giga tons withinvestments we do, or that the investments, the companies we invest in. Withour first font and we expect it to be around 35, 40 companies will invest inthat they will help us to save two gigatons of CO2 other in the 2014 per yearat the latest. Yeah. So it's a fraction, but this is still a both goal and ithelps us very much to differentiate in. Climate tech. And what's not becausethere's so many things out there describing itself as Climatec, but if I'mallowed to name micro mobility studies show that it's adding emissions and it'ssaving micro mobility is not climate tech.

[00:07:34] Danijel: And if you look at the numbers and how many billions, how much capital isinvested into climate tech, you chunk goes into that micro mobility. And it'snot clear because once

[00:07:42] Waheed: they make emissions, thanks for a break at this point, I was going to ask youthis anyways, but how do you define climate tech versus clean tech?

[00:07:50] Waheed:I know that people have. That's words they're put out there to do queen washingand a lot of stuff. So tell me, define for me, what is exactly climateaccording to you? And then what do you think is wrong with those definitions?For the media who are basically causing this transportation? It has to beclimate tech.

[00:08:05] Waheed:That's no

[00:08:06] Danijel:different. So Cleantech was the word that we've been using between 2006 and2009. So there was a period of investments into clean tank. Then so-calledclean tech 1.0 era, and those companies were mainly in energy. But if you wantto differentiate between those two words or descriptions, the description ofclimate tech, I think it happened for two reasons.[00:08:28] Danijel:The one reason is it's not only energy tech companies, what are clean tech,Automic tech companies. It's also companies from the food agriculture and bleduse space, the fellow sector. And another reason that I could imagine is that.Brought this new wording up climate tech is that Cleantech was perceived as afailure, but Cleantech one point [00:08:49] Waheed:coastal ventures and Kleiner Perkins lost a lot of money in that decade.[00:08:53] Waheed:Basically the [00:08:54] Danijel:beginning. If you think about Tesla beyond meat, quantum scape investments thathave been done then. So if you combine those 25 billion us dollars ofinvestments, then the companies that grew out of this money valuable. 2000billion us dollars today. So the credible, that's definitely not a failure.[00:09:13] Danijel:It's just the perceived because it needed more time to grow. So the value ofdeath is longer for companies because you have hardware competence, you havedeep tech, and it's not a software e-commerce company where you can expectreturns or a breakeven after a year, two X, a bit more time. Then the returnsare higher.[00:09:32] Danijel:That's [00:09:32] Waheed:also COVID. Yeah, obviously there's a lot of, kind of failure in there, but thereturns are higher, like you mentioned. So talk me through your fund mechanics.Sarah. So what check sizes are you guys putting? How much have you guys raised?How much equity do you take? What valuations are you seeing right now yet?[00:09:47] Waheed:Walk me through everything. [00:09:48] Danijel:Basically. It's raising 350 million euros. So that's our goal. We're stillfundraising and we exist already for two years, but. Disclosed ourselves threemonths ago. Right. And why we only disclosed us three months ago is because wedidn't want to communicate that we are building the biggest climate tech VC inEurope before having done a huge chunk of the work for Europe, for the Americanlisteners, it's like three 50 million Euro fund.[00:10:13] Danijel:Come on, let's switch to another podcast, boring and Europe it's used,especially when you're focusing on climate tech. So we don't have the fund sizeassess in the U S and in. That's strong funds, but they are smaller and we havea huge gap, but I'll tell you a bit more about the gap and European climatetech later.[00:10:33] Danijel:So when you, we need a big front to fill this gap and we only can disclose itwhen we have really done something. And so we also knew that we need more time.So we invent. Basically something what's called the pre-closing and thathappened in October, right before we went out in public because thispre-closing wasn't very well, so a bit more than half of the capital is alreadycommitted.[00:10:54] Danijel:And so then we knew, okay, this will not only be an idea about plan. This willwork out the official first closing will only be an April end of April thisyear. And we started to invest yet. That's also maybe a very, very importantLPs wants to see track record my team. And I, we have a very strong trackrecord was helping us to find.[00:11:12] Danijel:But it's even better when you have a portfolio already. And that's what webuilt last year. We even have a significant app round. Now I can't tell you toomuch about it, but it's very much with the fundraising. [00:11:22] Waheed:Interesting. So in terms of the rounds that you participants is like seedpre-seed or yeah, [00:11:27] Danijel:it's from seed to series B initial ticket size is one to 8 million and reservemore than 60% of our capital for follow on rounds to be able to go with.[00:11:39] Danijel:Two more [00:11:39] Waheed:Morales. Right. Okay. That's amazing. And are you guys usually leading theserounds or kind of coexist? [00:11:45] Danijel:Yes. Our goal is to lead every round and to have board seats. Whatdifferentiates us also compared to other funds, especially in Europe, ourinvestment team consists of people who have a scientific background under.[00:11:57] Danijel:The business behind a startup company, but also the tech. We have a chemicalengineer and mechanical engineer and nuclear physicist physicists, chemists,mathematicians. That's what we learned. One of the reasons why European VCs toohesitant to invest in this huge investment opportunity of European climatetech.[00:12:14] Danijel:And now we have the team to understand the tech and we lead the rounds andtradition. European VCs. We are very happy about that are co-investing [00:12:22] Waheed:right. Okay. That makes sense. So this is a dedicated climate fund, like youmentioned, right. And the biggest one in Europe. Can you tell me about what doyou think the advantages or the disadvantages of being a dedicated climate fundversus like a Sequoia or a soft bank doing some of these investments?[00:12:38] Danijel:Really? Yeah. Very good question. I would say one thing is. Just talked about,we have a team of scientists. I mean, if you compare us to Sequoia, et cetera,of course, it's hard to compare and to look better than those do the job fordecades. Not only, well, I mean, they're the best. So our difference is that weare in Europe and we've learned that especially compared to those traditional.[00:13:00] Danijel:We win the deals because, Hey, we understand the tech B, we are in Europe. See,we have the deep pockets, comma tech companies need to follow the rounds. Onevery important thing. And maybe it's even the most important. Those founderswere the best that purpose-driven those funders in climate tech who really.[00:13:18] Danijel:The most successful companies in chroma tech so far and who are building it arethose who are not only in it for the profit. They're also in it because theyunderstand the climate crisis. If you understand the climate crisis, you knowthat we are in deep trouble. And if you love humankind, you will dedicate yourlife to tackle this challenge.[00:13:37] Danijel:And those founders, what purpose driven. They very fast understand if theinvestor that. It's only in for the money or if he or she is reallyunderstanding what's driving you and we are driven yes. By financial returns,but we also driven by the mission we are in. It's not only talking. I mean, Ican tell you that we are, for example, also support by cozy cozy is a treeplanting company.[00:14:00] Danijel:The biggest search engine. And they are our first investor with 10 millionjournals. Is that purpose company. So the founder of it's Christian and Tim,Tim is the co-founder of me and the world fund. So this company is a valuevaluable, more than a billion, and they made it a purpose company, each owned50% of it, 500 million euros, and they made it purpose companies.[00:14:22] Danijel:They gave away this money. They're walking the talk. I'm talking that walking. [00:14:26] Waheed:Yeah, that makes sense. That's fascinating to me. I did not truly understandthe purpose of investing in climate tech before I started my research,basically, because I think if we want to make the most profitable outcome alsothe most sustainable outcome and also make it.[00:14:44] Waheed:Probable outcome. We probably need to invest in tech. It's too late, basicallyin a lot of ways, the IPC report and others talk about how actively we need toinvest in tech and create new tech to undo some of the geoengineering we'vedone to the. Right. Tech is almost like a game changer when it comes to that,it can basically be a technological discontinuity with the current kind ofenergy harvesting systems we have, it's just not possible.[00:15:13] Waheed:You know, we need better growth models. There are 3 billion plus people inChina and India who are going to come out of poverty and they need energy. Theyain't going to stay in poverty, you know, no matter how much you tell them, wedo need a ways to create sustainable energy. That's where I think tech is sofundament.[00:15:31] Waheed:To be a game-changer. [00:15:32] Danijel:Yes, it is. We need to invest in every thing. And my dream land, of course, Iwould love to invest only in green energy on the mitigation tech, but I mean,climate causes a severe, and we also need to invest in adaptation. I'm not afriend of gear engineering, huge risks. We want to do this.[00:15:50] Danijel:I can clearly say, but also know that research in this direction is veryimportant because when the time has come and we really are in this deeptrouble, even deeper, and this will happen. I PCC report. You just set itthere. Also, you can read that we have no chance to reverse global warminguntil 2050 global warming will continue until 2050 questions only.[00:16:10] Danijel:Everything. We can see the floods, the fires, it will accelerate. So if we actnow, we only can improve the situation for the time after 2015. If we don't actnow, catastrophe afterwards, we need to prepare for everything we need to investin mitigation. It's what we mainly do to reduce the concentration ofgreenhouse.[00:16:27] Danijel:And the atmosphere, or basically it's our founders and the entrepreneurs who doit. They are the heroes. We only serving them and trying to direct as muchcapital as possible into their directions and try and try to make the companiesgrow. But we also need all everything. Would you have said that makes [00:16:40] Waheed:sense before we kind of move on.[00:16:42] Waheed:To talk about your entrepreneurs and maybe the tech actually that you'reinvesting in. Let me quickly ask about the LPs that you're getting. Obviouslythere's the Mr. Burns test so that they know, okay. If I'm investing in thiscompany, is it because it's profitable or is it because sustainable? Right. Alot of time, I see LPs being quite interested in short-term IRR of the fund andhow it's going in as a GP.[00:17:06] Waheed:Almost under pressure to invest in SAS, just because it gives a bit of coolmetrics in the short-term. So are most of LPs, okay. With taking a longer termapproach, are you being very selective and trumps of who you're taking is LP?So how do you manage that expectation of short-term profit versus thelong-term?[00:17:25] Waheed:Yeah, [00:17:25] Danijel:I love the Mr. Burns test. I love it because we also do it when investinginvest in companies that will be successful. Even if we don't have anincreasing carbon price, we don't want our companies to be dependent onregulations. I know Politic's, I've been there. I know if you know what'shappening on your level of right now, taxonomies gas, even being declared greencompanies, that entrepreneurs have to be.[00:17:49] Danijel:Without being dependent on regulations, but of course we have to have this inmind. For example, we invested into juicy marvelous, juicy marvelous is acompany that is producing feely, miniature, the Luke's meat without animals,purely based. And this product hitting the. Now it is better tastier,healthier, cheaper than animal mate.[00:18:10] Danijel:Phelim in young. [00:18:11] Waheed:That's incredible. I never had it, but I should probably after this. Yes, [00:18:16] Danijel:please. We tried it last year in April and they improve the receipt. My wifeate my piece of in your, because it was really, really good. So it has to bebetter than what's on the market only then only Mr. Burnsville will buy it.[00:18:29] Danijel:And they'll also, don't put. It's just a steak or another company is co-op theyproduce Coca-Cola the cocoa bean and the lab. So the product is not a cocoabean, but it's everything. What you get from the Caribbean and putting thechocolate, they produce it. And it's also, again, Test your healthier, likecompared to what there is on the market.[00:18:50] Danijel:Those huge companies that produce chocolate 95% of Coca-Cola used today isproduced through cutting rainforest, planting Kakoa trees and monoculture childlabor. Those companies won't change that if they don't get an alternative.Cheaper healthier, better than what they have. This is all approach. So Mr.[00:19:09] Danijel:Burns tests, the second part of the answer is that we also, within ourportfolio have a mix and this, we have the tech and hardware relatedinvestments, but also software investments. So we have some in Westminsterinvestments where we make the return earlier and the others later. So basicallywe are hedging.[00:19:25] Danijel:That's one part of the answer. The other part of the answer is that especiallythe. You have huge climate tech growth VCs at peace that only last year wereannounced at general Atlantic, Texas Pacific Wellington from Toronto KKR. Iknow will also disclose a fund soon. So it's only those four are close to.[00:19:45] Danijel:Billion us dollars. So you see totally different numbers. The Americans workwith. So we have enough funds that will buy our companies. I wish it would bealso European VCs and grow with fund center. So you see 350 million. Yeah, noneof [00:20:01] Waheed:that makes sense. And yeah. Thank you very much for answering that question.[00:20:04] Waheed:Really. So moving swiftly on, I think you touched on this already a bit.There's different kinds of. Technology that you can invest in to basicallyfulfill your noble investment thesis. Right. And I think you already mentionedsome of the few, but can you talk about what are the kinds of stuff you'reseeing in hard tech and what are the kinds of stuff you're seeing in softwarethat you're doing right now and how that fulfills your kind of investmentthesis?[00:20:29] Waheed:Yeah, [00:20:29] Danijel:it's when we put this filter on the technologies that they have to be able andto have the potential to save at least a hundred. A year and they've got tonsof CO2 already for permissions. Then you have like 60, 70 technologies in twospaces that are relevant for us to invest in. I can, by the way, recommend thebook that already came out in 2017, that inspired us about project drawdown.[00:20:50] Danijel:More than a hundred scientists have done research for three years, publishedthis book, presenting the a hundred solutions we need to invest in to reverseglobal warming or global heating, I think is more appropriate. So it's the twospaces I'm talking to. Energy and food agricultural land use energy consistsalso of construction tech.[00:21:07] Danijel:So buildings also content consists of manufacturing or industry andtransportation. What we are seeing a lot is companies who try to get farmersand to regenerative farming. So this is on the fellow sector. Very interesting.What we see is a lot of precision fermentation, like juicy marbles and Koa, andof course sell hermetic agriculture.[00:21:29] Danijel:And on the energy sector, we see a lot. The research done in batteries, a lotof research done and how to improve efficiency, a lot of efficiency in terms ofheating. And then of course there's a lot of research done on how to improveour electricity generation and maybe the last field, of course. How can youconnect?[00:21:46] Danijel:What's producing energy because in future we'll be decentral with what'sconsuming. So those platforms in between, [00:21:51] Waheed:right? Okay. So that's a lot of stuff in there. I noticed that you did not talkabout. Say specifically carbon capture or like hydrogen. Is that something youguys? Yeah. Interesting [00:22:01] Danijel:that I didn't mention this, but it has a lot to do with our goal to save asmany emissions as possible before 2014, because now's the time we have toreduce later as too late, if it's not already.[00:22:11] Danijel:So Darren, I capture those huge suck CO2 out of the air machines will only makeus a significant difference after 2014. It's interesting conference. Difficult.Yeah. It's compatibly expensive [00:22:24] Waheed:energy while to ensure now. [00:22:27] Danijel:Definitely. So in 2050, I'm pretty sure we'll be super happy that guys alreadyin this decade have done the research and then the investments.[00:22:35] Danijel:But if you have alternatives and there's other stuff like allergies, allergiescan capture for much longer. More carbon much, much more for a low price orregenerative farming or also regenerative forestry. So we do have manyalternatives before you really need to suck carbon out of the air. Thenhydrogen, another thing definitely will also be relevant, but we'll only make adifference after 2040 and hydrogen.[00:22:58] Danijel:I can also tell you that. I mean, it will be huge, but it will need decades tocome. And here, I can also tell you through the political background I have.It's definitely something. Lobbied by gas industry because it's given them anopportunity to keep their stuff going with the promise. We'll turn this into ahydrogen and you can see also on a European level that this is working out gaswill be declared Corinne because it's basically something that is enablinghydrogen and future.[00:23:24] Danijel:So I really have mixed feelings. [00:23:26] Waheed:That's interesting. Would you say if there was some kind of radical innovationdone in carbon capture and hydrogen, which can basically reduce the timelinesfrom like 2040, like you're saying to before, are you seeing something likethat or is there a possibility or not really?[00:23:42] Danijel:I'm um, what I really think, well, be leaps. I think if. Progress and quantumcomputing, this will have a huge impact on materials science. This will have ahuge impact on achieving hydrogen earlier, where we need it. So this would cutup bullets and Joanie would say, this will be a crunch bomb, like a quantumjump.[00:24:01] Danijel:This will really help us to save maybe a decade or two and get a much faster tothose goals. So we're right now also looking a lot at quantum computing, justfor our [00:24:10] Waheed:listeners. That's like, what is the use case of quantum computing and margin?Exactly. Maybe [00:24:15] Danijel:it's for me, easier to do it on the battery levels.[00:24:17] Danijel:So do you have to do a lot of work in the lab plant tests when you try to getthe perfect composition of batteries? And if you have a computer that is. It'sreplicated basically the real world and to make a calculation, instead ofhaving you to do the tests and tests and tests, it will save time, lot of timeand a lot of energy.[00:24:37] Danijel:Yeah. [00:24:37] Waheed:So it's like a lot of simulations done at a large scale with lots of variablesand lots of data that you're talking. [00:24:43] Danijel:Yeah. But to be honest, I'm an economist. My team is here smarter. I told youthat scientific background, I'm learning every day from them. So if you want meto go deeper, Yeah, I'm just a learner.[00:24:56] Waheed:Yeah. And I think that's important as well to translate some of these stuff forthe mass public as well. Right. And you guys are doing that a lot through yourwork, which is really great. So coming back to Europe, you mentioned aboutyou're being a bit behind, so it's like behind the U S and China in terms ofnumber and size of investment in climate tech, and you guys decide toconcentrate Europe.[00:25:18] Waheed:So why Europe? Why is Europe special? When it comes to climate tech. So tellme, tell me more about, [00:25:23] Danijel:yeah, you're investing most capital into climate tech, R and D has most climatetech companies, at least funding. That's why Europe in Europe, we have thehorizon Europe program on European union level 33.4 billion euros will beinvested solely into climate tech until 2027.[00:25:42] Danijel:We have done already since 2014, another 58 billion euros have been invested onEuropean union level. R and D adding to that hundreds of billion euros fromnational budgets, France, Germany, Spain, Italy, investing into climate tech, Rand D. This results into two things around a third of the institutions anduniversities relevant for climate tech are European 28% of all climate techpatent applications come from Europe.[00:26:09] Danijel:If you compare the number of energy. I found it in Europe in the year 2020 it's353 in Europe, 250 around in America. If you look closer at the better Resectr,it's 103 companies founded between 2000, 19 and 21 in Europe and China, uscombined it's 80. So we are leading an R and D climate tech, R and D areleading in climate tech companies, but we lack funding and that's honestly, I'mtalking everyday.[00:26:36] Danijel:From a tech brilliant teams, brilliant tech. And most time I have to say,sorry, we have to decide for, I mean, since our PR lounge, we had 1,100 applicationsand it wasn't an October within three months thousand 100, mainly Europeanclimate tech phone. Reach out apply, go really through a process. Of course wehave to tell, I mean, we can make only 40 investments with this fund.[00:26:58] Danijel:I'm getting emotional because I mean, it's not a missed opportunity for profitsand missed opportunity for humankind. It won't be missed. I mean, luckily wehave Americans, Chinese investors coming over and some European funds alsowaking up. I hope it's not too late. [00:27:14] Waheed:It's very interesting to me. So I love reading about history.[00:27:16] Waheed:You know, it's very interesting to me. The whole kind of thing about greenhousegas emissions started in Europe in the late 18 hundreds, right? Where the firstindustrial revolution and the starting of the industry and getting lots ofpeople out of poverty through the mechanized, working and through industry,basically the use of fossil fuels is very interesting to me as well, to see thesame type of energy transition going on in the same continent again, after likeroughly 150 years.[00:27:46] Waheed:But this time with cleaner energy. Right. So, yeah, it's quite interesting tosee that kind of [00:27:51] Danijel:trend, basically. It is. It's interesting. But today of course we have manymore transitions. If you explicitly all interfered artificial intelligence,digitization, metaverse blockchain. I mean, it's all coming together.[00:28:03] Danijel:Yeah. We are living in interesting times and I'm pretty sure that this willeven accelerate. Yeah. [00:28:08] Waheed:Yeah, absolutely. Absolutely. Cool. So I think you touched on this a bit, butin terms of. Climate tech. Obviously you said that, for example, when you didyour kind of official PR launch, you had a lot of applications come in forfunding and most of these applications would you say were pre product or at aresearch stage, or do you think they already had a bit of traction?[00:28:29] Waheed:So when you say seed investment in a climate tech company, is this like,pre-product, I'm trying to understand this because obviously there is a casefor funding. That's your core research, right. Universities, whatever. And thenonce you have a bit of luck at liftoff, you get the escape velocity, and the,when you come and see what kind of seats stay when you say, see, say what kindof companies are we talking about and how much should we invest in like precommercialization and [00:28:54] Danijel:pre-product yeah, it's mainly two gaps.[00:28:57] Danijel:That one gap is the gap and seed stage. When tech comes from lab and wants toget to market basically years of investments or years of R and D done. Yeah.That's prototype. The second gap is when you really have shown that things workand you need to scale a serious beat, basically stage, and then you need 20million or even more, but then classical European VCs asking for the traction.[00:29:19] Danijel:What's your revenue, what's your profits break. Even then, of course you can'tcompete to software e-commerce companies or those quick commerce companies outthere. So those are the two gaps, those thousand 100 applications we receivedsince October it's across really all. Pages. And I can tell you it's hard todecline again.[00:29:38] Danijel:It's maybe half of it. You can recognize very fast. Okay. It's not getting overthe threshold of a thousand to make her tons, but what do you do at the endwith those 500 that you still, where you see this potential? [00:29:48] Waheed:Absolutely. And in terms of world fund, how do you guys. Your portfoliocompanies. Exactly.[00:29:55] Waheed:What are you doing differently than? [00:29:58] Danijel:Yeah. All of this adding value question. So our team is now it's 12 people. Andwith the final closing, we expect us to grow to 25. My background is incommunications and brand building. So that's what I've done for, uh, hundredsof companies. So that's something that I applied to those funds.[00:30:14] Danijel:Of course I can't dedicate too much time, but it's definitely something how ouradventurous with number one, number two is that political network I have. If,if you have a strong network and sometimes hear about potential regulations andeven more detailed earlier than the others can also be helpful, then toMedallia, they've been at war.[00:30:32] Danijel:Best investors in 2020, they have a huge network in terms of potential followon investors of talent, Craig, as a physicist and chemist who can connect youalso to talent that you need to grow. I think we are adding a lot. We alsohelping a lot of our founders is at the CPP. So at the methodology that we havedeveloped to even save more emissions, what will also turn into more financial.[00:30:56] Danijel:So when you are really a founder who cares for profit and impact, and if youhave an investor like us here, I think it gives you some outside [00:31:04] Waheed:entity stuff to help founders with. So just exiting the technology questions inthe. 30 years. What top three or top two technologies are you most excitedabout in terms of climate tech [00:31:18] Danijel:technology that I'm excited about?[00:31:19] Danijel:I already told you about quantum computing. I'm very excited about, I'm excitedabout the decentralization of energy. I'm excited about it because I'm a fan ofdemocracy. And so if you have a di central energy system come home, you produceyour energy. You can sell it. Everybody can sell it to. That's participation.[00:31:37] Danijel:It's not one or two or three cell too, too many, but it's a, [00:31:42] Waheed:when you say decentralization of energy, is there a precedent for this todaythat someone's doing really well, any country or any company? And if so, likewhat is exactly what. Can you tell me just for our listeners who are notfamiliar with this?[00:31:55] Waheed:Yeah. I can tell [00:31:56] Danijel:you about a company. Grytics where we have been invested before world funds andit's we sold it to Ian what's at utility in Germany. They have produced aplatform that connects basically everything that produces energy witheverything that consumes energy. You can also, you have a hardware component.[00:32:11] Danijel:You can be there installing a tome or in an office, or wherever stuff comes in.That's consumed that produces and consumes energy. I'm just excited about.Guys, I know that how, how purpose driven they are and what they've built, whatother companies have tried to build, and they've done it very expensive.[00:32:27] Waheed:So quantum computing, as well as decentralized energy, what else? [00:32:31] Danijel:Maybe it doesn't sound so sexy, but if we get our farming and our farm.Worldwide to regenerate to farming. Then the ground will, will take 11 gigatonsof carbon. I mean, it's incredible. Even if the whole world, I think, turns toRegina, to farming, I really, you have to put it in the notes.[00:32:50] Danijel:It's even the 60 tons you've been talking about only the gentle farming cansave all of them. We create as humans. So the 11 gigatons was, I think, only onEuropean level. And that's exciting if we just change the way we produce foodproblem solved. [00:33:05] Waheed:Okay. And when you say regenerative farming, what does that exactly mean, sir?[00:33:09] Waheed:Mainly [00:33:09] Danijel:two things, no plugging and no. Fertilizers or less before civilization earthor ground, how do you call it homeless? It's in German soil top size. We onlystarted to do that with civilization and that's, by the way, also learning, Ionly recently had humankind already before industrialization. The concentrationof greenhouse gases in the atmosphere before that Milankovitch cycles.[00:33:35] Danijel:And so you can compare it that there's some pattern and you could really seethat the concentration of greenhouse gases. It has increased since civilizationthrough plugging that in. We also started with Indra. So in Australia rotationto accelerate this using fertilizers, and then all the carbon, basically we arekilling the ground to grow food on it.[00:33:52] Danijel:On that ground. Food grows only through additions. It takes years. Again, I'mnot a super expert in this field, but if. Got the ground to basically be whatit is. And you not only grow one plant, but maybe 19, there's this one movieit's called kiss the ground. Love it. If you have not seen it. Super cool.[00:34:09] Danijel:Super interesting. Cool. Yeah, [00:34:10] Waheed:I think it's tonight's sorted, so [00:34:12] Danijel:yeah. Okay, cool. Sorry by nature saves carbon has carbon, but through the waywe do agriculture, it loses it. If we only would turn to the agriculture or tothe ground, how it has been no more, more on it than that. It's not only likeonce you get the fruits and what you have put in the ground, but you do it moretimes per year and you do 90 different.[00:34:35] Danijel:But only one, then this can save all the carbon we emit. Are [00:34:38] Waheed:there any portfolio companies you have who are in the regenerative farmingspace or any examples of [00:34:43] Danijel:companies we're looking at and comparing right now? Everything. And I'm surethat's one of our next investments will be in this space because it's sopowerful, but it's really difficult to get a business model.[00:34:53] Danijel:I mean, in Europe, worldwide, we have a system that is paying farmers a lot ofmoney to do it from. So to get away from this subsidies, Create incentives andthat's really something, some startups are really trying to achieve and we seesome top stars. Pretty sure we'll do one investment very, very soon.[00:35:11] Danijel:Yeah. [00:35:12] Waheed:Interesting. Yeah. Looking forward to seeing, I know the concept of, okay.Monoculture is wrong or whatever, but I haven't seen any startups actuallythink about regenerative farming at least myself, but that's great to hear.Cool. So shifting gears a little bit, I know we mentioned a few times onpolicy-making and few times on the government.[00:35:30] Waheed:European union. And what have you, so can you talk about the policy leaversthat you think can be flexed in order to help with this noble thesis that youhave obviously entrepreneurs by themselves can't solve everything. These aremore like a nation, state level stuff we're talking about. Right. What do youthink is the role of government and what kind of policies do you think shouldbe introduced to help you with this common [00:35:53] Danijel:prize would help a lot because we would internally.[00:35:58] Danijel:External costs, sorry, I'm an economist. And that's a really totally economistsentence of what I'm saying is we have so many companies who do harm for free.Yes. I mean the companies who burn oil gas and sell it for a very, very cheapprice for the real price of carbon, there was a study that came out threemonths ago.[00:36:18] Danijel:If you really include the costs also. The next generation's 4,000, you askedothers ton. You know, we are talking, we are happy that in Europe we have closeto a hundred euros per ton, and this is something many companies alreadycomplained that it's too expensive and that we have also the biodiversitycrisis, which we're not even talking about.[00:36:36] Danijel:I mean, if things go wrong here, then this deep trouble we have. I think thenit's over. So this would help a carbon price to really, to have the real priceson what's destroying our planet subsidies, all those billions and trillionsworldwide per year. Just, just don't don't don't subsidize island gas.[00:36:53] Danijel:Don't subsidize this kind of farming that is basically destroying us and theplanet. I mean, it's enough, please. Just do nothing is better than peeringinto those killing machines. [00:37:04] Waheed:Yeah, that makes sense. Really? The question of governments is always a trickyone. What's your opinion? On the recently concluded cop [00:37:12] Danijel:26.[00:37:12] Danijel:It's something better than nothing. I have no hacked expectations. Let's notwait for politics. I mean, this example of Tesla, I love to read. Tesla ischanging the kindest three Tesla. It's not regulations. It's it's entrepreneurswho change the world. And that's also the reason why I turned from journalismand political to an investor, because I see those who do, and those who change,not those who talk entrepreneurs power.[00:37:38] Danijel:So. They can make a difference and then politics will comply. [00:37:43] Waheed:Yeah. And I guess the best results ideally is when your politics aligns withyour kind of entrepreneurship. Right. And I think even for Tesla, the firstcouple of years, they had government subsidies, you know, to this day, when Igo to California, I see that if you will have like electric car previously, itwas only Tesla.[00:38:01] Waheed:You can actually take the carpool lane, even if you're driving all alone. Soit's almost incentivizing kind of electric cars and. A couple of othercountries in the Eurozone are also going to start doing [00:38:11] Danijel:that, right? Yeah. That's of course you can see if, if politics has done right,can accelerate us into the right direction.[00:38:17] Danijel:I'm not done. Wait, that's what I say. I'm always happy when things like thishappen or in Germany, I'm also very proud that we subsidize. Wind and solarenergy. Technically we developed a lot thanks to subsidies that happened toyou. But then we also stopped it in the last, especially last five years, wereally stepped on the brake because some big companies didn't earn the moneywith the businesses stay, have been in and are still because of thiscompetition that grew.[00:38:44] Danijel:And yeah, but now we're trying to roll it again. We have a new government, [00:38:47] Waheed:so that's where tech is quite important to mature and get cheaper. Right?Because at the beginning you can rely on the. To subsidize the cost for you tomake it equivalent to the fossil fuel alternatives. But then again, you needthe tech to catch up in a way that it becomes cheaper to do renewables versusnon renewables, right?[00:39:07] Waheed:So that's always the case that you start off with policy tools, which issubsidized, but you do need entrepreneurs to keep chugging along and thesoftware, the hardware layers to make it cheaper. [00:39:16] Danijel:Basically you don't need subsidies for innovation. It's again, theentrepreneur. The brilliant human kind subsidies can be helpful.[00:39:24] Danijel:And if they are invested right, but at the same time you get, you can see itcan also destroy. So at the end, it's not subsidies that make the difference.It's the brilliant minds. And it's the brilliant humans, those bold people whobelieve in something purpose purpose-driven they make the change.[00:39:39] Waheed:Brilliant. Well, I think with that, we'll leave it as is. I think we had agreat session and we're running out of time as well. Daniel, thank you so muchfor joining us today and sharing your opinions on this very, very importanttopic and hope to have you again very, very soon and all the best with yourfund.[00:39:56] Waheed:Hope that you see some unicorns and DECA corns in the next two decades. [00:40:01] Danijel:Great. Thank him very much. Thank you. Brilliant. [00:40:06] Waheed:Thank you very much for listening to the innovations of life. Podcast. If youlove the podcast, please subscribe on all major platforms as well as pleaseshared with your friends and family.[00:40:17] Waheed:Thank you very much for listening and see you soon for the next episode.