The climate VC who gave up on politics- POLITICO

Danijel Višević entered venture capital after getting impatient with government’s pace in addressing climate change.

He reinvented himself as a tech investor after years working to shape German Prime Minister Angela Merkel’s global TV image as part of her communications team.

Višević is a founding partner of Europe’s biggest climate tech fund, World Fund, which has offices in Amsterdam, Berlin and Munich. It focuses on investing in companies that it thinks have the potential to reduce emissions by at least 100 million metric tons per year. POLITICO caught up with Višević at the Collision tech conference last month in Toronto.

This interview has been edited for length and clarity.

What’s wrong with venture capital today? 

One is VCs often only look at the obvious financial numbers. If you invest in climate tech, and in solutions that solve real problems, you need physicists, chemical engineers, mechanical engineers, biologists that also have venture capital investment experience, who understand tech and can compare technologies to then come to a decision.

A worldwide issue is this short-term thinking among VCs. We are starting to see funds set up with longer lifetimes, but the lack of very good long-term relationships is an issue.

Does European venture capital also need to change? 

Yeah. Americans move fast and first. Germans only move when they have seen that something has worked 10 times. This is a cultural thing, and we are struggling with this at World Fund. I can tell you, very openly, that is why we stayed in stealth mode until we had half of our capital committed: to avoid any impression of failure.

It feels like many VCs and founders are better at siphoning money from a value chain than solving problems.

Yeah, I totally agree.

Did you get your climate focus because you wanted to save the planet, or because of the potential profit? 

I take care not to tell this to our investors, but I’m concerned for not only humankind, but all life on Earth, as a result of the climate crisis.

We are running towards a worst case where we’ll make two-thirds of the planet uninhabitable for people. Hundreds of millions, if not billions, of people will be endangered.

It was not an accident that I had my deep research moments in 2018, when Fridays for Future and Greta Thunberg appeared. I was working for a super successful VC firm, but decided I had to dedicate my life to tackling the climate crisis.

My business partners are really good: both are able to smell money even if it’s behind a three-yard thick wall, so they’re financially driven. That makes us a complementary team.

Why did you choose to shape markets over your background in government and regulation? 

I saw working for Angela Merkel that she was super aware of the climate crisis. She was the Environment Minister before she became Chancellor. She chaired the first COP in Berlin in 1995. She has a PhD in physics. But still, what came out of all that — the politics — was not a good result for the climate and humankind. We need miracles to reduce emissions fast, and tech can help us achieve that.

It’s also the case that we won’t change behavior by forbidding nice things. If we forbid eating meat, for example, there will be a revolt. It’s better to create alternatives so that some will start to change. We want the meat eaters to eat our Juicy Marbles (fermented soya filet mignon). Vegans don’t like it because it does taste like meat, but if it’s cheaper and healthier, why should I still eat animals?

You’re the biggest European climate VC fund. How big is your team?

We’re 15 people.

What are you most excited to be investing in? 

We want to show that you will become richer by investing into real problems.

Are there energy solutions that you’re deeply invested in right now?

We’re looking at many energy solutions: everything that can save at least 100 megatons of CO2 emissions or equivalents per year. So if AI technology is able to save at least 100 million tons of CO2 emissions per year, megatons, then that’s an investment case for us.

Within energy, you have three sub-sectors: industry, transportation, and construction. We’re also looking at an enabling technology that can save up to seven gigatons of emissions. And we have a concrete case with a huge European car manufacturer to build the next battery for cars.

We want to be thinking about new materials, new batteries that we today maybe even can’t imagine. And with new computer modeling, you can build new batteries very fast. You don’t have to build one battery after another and take years doing it. You can do it within days, if not hours.

Then you have food and agricultural land use where, for example, we could turn topsoil again into a carbon sink.

Or there are companies like Qoa: It’s a company developing a cocoa bean alternative in a lab to save rainforests and avoid child labor.

What stands out about the climate tech companies compared to other tech? 

[There are] many more female founders in this sector, where you solve real problems and it’s not only about the money. But they will earn more in the end because they solve real problems.

Purpose-driven founders are stronger, they attract better talent. And because they are totally behind the vision, that’s better if the startup hits bad times.

Do you want to take over the traditional VCs?  

We co-invest with those leading traditional VCs. They invest with us after we’ve done a huge part of the job, but it’s totally okay for them to jump on the bandwagon.

So, you’re subsidizing them but also gaining the scale of their money? 

They’re also subsidizing us with their brands. It means we give a strong signal that we only invest with the best.

What’s a climate risk you wish more people understood? 

The difference between compliance and impact. You can have a super ESG rating because of good compliance, and quite often the oil and gas industry has it because it’s a highly regulated sector. But the impact is a totally different thing. Their impact is basically killing life on earth: It couldn’t be worse. So this is something most investors don’t understand.

I love the concept of carbon shadow. The carbon footprint concept was coined by the oil and gas industry so that we are all aware of our footprints. But a person working for an oil company can bike to work everyday and have a nice carbon footprint, but a big carbon shadow.

So let’s focus on what’s really important: what really matters for the sake of life.

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