We’re still energised from the conversations from our Annual Investor Meeting in June. It was a chance to step back from the day-to-day and look at where the physical economy is heading, a reminder of the quality of founders we have the privilege of backing, how much ground they have covered, and what the future looks like in their spaces.

Before we get into the highlights, a word on the macro environment, and why we think Systemiq Capital is exactly where it needs to be right now.

^{Systemiq Capital Team after Annual Investor Meeting on June 10th}

What we’re seeing - Macro themes from Managing Partner Irena Spazzapan

H1 2026 broke every record and every rule.

Global VC funding hit $510 billion, with Q2 alone delivering $205 billion. AI took 80% of that capital, and OpenAI and Anthropic between them accounted for nearly half of all H1 venture funding; the remainder concentrated heavily in defence tech, energy infrastructure and robotics.

Europe was a relative bright spot, posting its strongest funding quarter in four years at $24 billion, with London cementing its position as the fourth-largest global hub at $8.4 billion deployed.

Exits told a similarly bifurcated story: IPO counts at historical lows, yet venture exit value reached $2.19 trillion in H1, with the SpaceX IPO alone generating more than every US venture-backed exit of the past decade combined.

In our sectors, the concentration pattern is playing out as we predicted: most physical-economy funding went to data centres and adjacent infrastructure: geothermal, nuclear, power generation, confirming that post-Series B, this category has become infrastructure investing.

One space we are watching closely: the next twelve months will see a significant shift toward on-premise AI inference, which could be transformative for out-of-the-money power generation assets like nuclear.

Latest Announced Investment - Cable Energy

Earlier in June, we announced our investment in Cable Energy, founded by long-term friend of Systemiq Capital, Dominic Reardon.

Why We invested in Cable? Electricity grids are in the middle of a structural shift. Power is moving away from centralised generation toward distributed assets like rooftop solar, batteries, smart appliances, sitting closer to where it’s consumed.

That shift creates a specific commercial problem: small businesses can’t easily access the savings that come with it. No roof space. No capital for upfront investment. Locked out of a more efficient system by complexity and cost.

Cable is built to fix that in Australia. Dom’s team installs a battery at the customer’s premises with no upfront cost and uses it to reduce the total cost of energy delivery. Customers pay only for what they consume.

Behind that simple proposition is a serious software stack: real-time battery control, consumption-based billing, and wholesale market positioning. Cable charges when spot prices are cheap, discharges when they’re expensive. The hedge is built into the model.

We’ve known Dom for many years and have backed Cable’s $4M round alongside Black Nova Venture Capital. It sits squarely in the systems we back: founders redefining how energy is traded, managed and used across the physical economy.

Annual Investor Meeting - 10 June 2026

On 10 June, we held our fourth Annual Investor Meeting, and we couldn’t be prouder of how the event turned out.

This year’s gathering brought together our LP community alongside many of the audacious founders from across our portfolio, who had a chance to share with the audience where they come from, the challenges they have encountered, and what’s next.

The agenda covered the market forces shaping each of our three verticals, where the portfolio stands, and where we are looking next. We were reminded, across every conversation, why the physical economy is the most commercially compelling place to be building right now.

We heard from:

• Glen Gowers from Basecamp Research

• David Watson from Ohme

• Vivek Raghuraman from Mixx Technologies Inc

• Ivan Poupyrev, PhD from Archetype AI

• Filippo Rocca from Subbyx

• Shely Aronov from InnerPlant

• Nadav Bocher from Greeneye Technology

It was an honour to be able to give the stage to an amazing group of founders – we felt deeply grateful and positively challenged.

Following the Annual Investor Meeting, Irena and George collected their thoughts in two articles available on our website. They talk electrification, decoding nature, and where their evolving investment theses come from.

We also went on our own Summer Offsite earlier this month. We stepped away from our desks for two days to focus on our team and our goals, making sure the path to get to them is stronger than ever, and our foundation solid. We came out energised (despite the very long walks in the heat!), eager to take on the next few months!

Portfolio News

A snippet of the most exciting news of the past few months across the portfolio:

• Basecamp Research (June 2026)
  Integrated EDEN antibiotic/vaccine-design models into Anthropic’s Claude Science; EDEN-7 candidate showed efficacy against a WHO critical-priority pathogen.

• Archetype AI (June 2026)
  Launched Newton Agents, five ready-to-deploy physical-AI agents for industrial operations.

• ElectronX (June 2026)
  Launched intraday MISO/CAISO contracts, now covering four of the largest U.S. grid operators (~60% of demand) in under 120 days.

• Ohme (April 2026)

  • Partnered with Fleet Operations and Zest to add home EV charging to Fleet Operations’ offering. Read here.

  • Was named as Kia UK’s charging partner for its new PBV Centres. Read here

  • (March 2026) Launched Park & Charge, a new shared/communal charging feature on its ePod S charger. Read here.

• Greeneye (March 2026)
  University of Nebraska–Lincoln field trials showed its dual-tank precision sprayer lifted yields up to 18 bushels/acre while cutting herbicide use.

Team Spotlight

It’s not been quiet at Systemiq Capital – and there is plenty to celebrate. Let’s go in order!

We were pleased to welcome Nancy Mutton to Systemiq Capital as Interim COO in May. Nancy brings significant operational experience and will be covering Jessica Stewart’s maternity leave. Her contagious energy has already touched everyone in the team!

This week, we also announced two more exciting moves: Jasper Wigley has been promoted to Principal, and Gemma Bloemen steps into a full-time Principal role to lead our Applied AI thesis six months after joining Systemiq Capital as Venture Partner. You can read more about it here.

^{Jasper & Gemma}

What we’ve been thinking and talking about

From podcasts, to articles, roundtable discussions and more – find where the team has been sharing their views on the physical economy.

We were extremely proud to publish our 2026 System Report, which includes our view on where the physical economy is heading next, and spotlights some of our amazing portfolio companies.

More on the team below:

• Irena: Her latest article on Electrification combines a personal reflection with her perspective on the future - read it here: Twenty years in power. Three curves. One convergence.

• George: Was a guest on the podcast Ventures, where he discussed the future of AI-driven biotech, the cost curves of genomic sequencing, and the portfolio companies transforming everything from soybeans to lab-grown fat. Listen here! George also shared his thoughts on our Decoding Nature thesis here: “Solving hard, practical problems by decoding nature.”

• Jasper: Joined an episode of The Scenarionist, a specialist deeptech podcast, to talk about in-space compute. You can listen to it here.

Following his event on Taiwan’s semiconductor manufacturing (more on this below!) he was featured in the Taiwan Central News Agency alongside Deputy Minister Christy Chiang and industry leaders. Get your AI translator ready and read it here.

• Gemma: joined two podcasts with Primestart: you can listen to the first one here, where she talks about Scaling Operations, Hiring for Spark, and Investing in Tech That Meets the Physical World. The second one will be released soon! Sneak peek here.

Gemma also spoke during London Climate week on a panel hosted by the Chief Corporate Responsibility Officer for L’Oreal about the funding gab for deep tech companies post pilot phase - “How to Fund What Other Won’t”.

• Sie Yin: led a roundtable discussion on “Sim-to-real gap and the Last Mile Problem in Physical AI” and also published an article on this topic here.

She took part in Startup Strides podcast in Episode 75 (here) where she discussed why the near-term opportunity may be less about general-purpose humanoids and more about vertical robots solving specific industrial problems, and what a true “ChatGPT moment” for robotics might look like.

Where we’ve been & where we’re headed

It’s been a busy few months for the team, and we’ve got plenty more ahead. Here’s a quick round-up. Pease reach out if you’ll be at any of the upcoming ones!

Irena

• Bilbao Energy Tech Summit – joined a panel on data centre power efficiency;

• Attended San Francisco Climate Week;

• Coming up: GIC Conference, Paris (Sept), then on to San Francisco.

George

• SF Climate Week – organised an event with Systemiq and Gigascale Capital, “Profit in the storm – building an enduringly profitable agrifood business in turbulent times”;

• Coming up: US, early August, meeting founders and portfolio companies; The Drop, Malmö (Sept).

Jasper

• Attended EMEA OCP Summit, Barcelona;

• Was a speaker at London Venture Capital Network;

• Organised a compute-focused dinner in London;

• Attended Nvidia GTC in Silicon Valley and side-events hosted by major compute players including Cerebras and SuperMicro;

• Attended Hello Tomorrow, Amsterdam;

• Hosted an event with industry leaders in London on Taiwan’s semiconductor manufacturing ecosystem – featured in the Taiwan Central News Agency alongside Deputy Minister Christy Chiang and industry leaders (read here).

• Coming up: Semicon Taiwan (Sept).

Louis

• Joined Momentum Summit, Zurich (May);

• Attended London Venture Capital Network – spoke on a panel on “The Future of Proptech”.

Sie Yin

• Attended ICRA Robotics, Vienna;

• Was a mentor for the LBS MBA Cleantech Challenge;

• Hosted a Deeptech Asians investors–founders dinner in London, and a robotics investor–founders drinks event at Mashup, Malmö;

• Coming up: The Drop, Malmö (Sept).

Gemma

• Attended Hello Tomorrow, Amsterdam;

• Coming up: The Drop, Malmö (Sept); Norrskken Impact Week, Barcelona (Oct).

Jessica

• Led a fireside chat on scaling firms operationally without adding unnecessary complexity, at the Drawdown Operational Leaders’ Summit.

Elena

• Coming up: VC Platform Summit, Amsterdam (Oct).

^{Jessica during her panel at The Drawdown Operational Leaders’ Summit}

The SysCap team was also invited by the United Kingdom Atomic Energy Authority to visit their campus and learn about their progress towards fusion energy and the companies they’re spinning out in the energy supply chain – a great opportunity for Gemma, Jasper and Louis.

^{Jasper, Louis and Gemma at the Atomic Energy Authority alongside their guide Tim}

If you’re at any of the upcoming events and building in our systems – electrification, the compute layer, decoding nature, or applied AI – please reach out!

News from our friends at Systemiq

• Systemiq celebrated its 10^th anniversary and shared more about this first decade of system change, and what comes next in this publication.

• Ground Truths - the first annual survey to give the growing field of practitioners working on economic system change a voice on the big issues and dilemmas shaping Systemiq’s work. Its aim is to surface key barriers to transition and to identify what is working well.

• Most recent publications:

  • China’s food strategy paper.

  • Steel-IQ v2 and whitepaper.

  • Scaling jobs and skills through climate and development finance – article here.

See you next quarter!

Systemiq Capital Team

2026 has started in the best possible way at Systemiq Capital: while still riding the momentum from our investment in Mixx Technologies, we’ve since announced investments in both Claros and Subbyx. The team has more in the pipeline, we can’t wait to share soon.

Before diving in, we wanted to step back and share some broader themes we’ve noted.

What is happening - Macro trends and thoughts from our Managing Partner Irena Spazzapan

It has been quite the start to 2026. AI advances and the launch of Claude Cowork in January upended the entire SaaS industry, destroying the terminal value of previously loved stocks and triggering mass redemptions in private credit. Now, Operation Epic Fury has triggered the 4^th mega supply chain disruption since 2020. First, we had Covid, then the Ukraine war, then the rare earths weaponisation by China – now Hormuz. Nobody knows how this ends, but this will certainly trigger a highly accelerated shift towards energy security and away from fossil fuels, particularly in Europe and Asia.

What this means for tech, private markets and public markets only time will tell.

In the last post I wrote “Beyond the headlines, we are most excited about fast improving compute, energy storage and automation changing the physical world. When it comes to so called “AI factories”, we see a path to a drastic 80%+ improvement in energy consumption per token which is even more bullish for AI applications – less so for the most expensive AI infrastructure stack.” This now feels inevitable and necessary more than ever given the current environment.

Let’s jump into some highlights at Systemiq Capital.

New investments

Claros

We’re excited to share our participation in Claros’s oversubscribed $30M seed round, alongside General Catalyst, Red Cell Partners, and others.

Claros is tackling one of the most overlooked problems in AI infrastructure. Legacy data centres waste up to one-third of the incoming power before it ever reaches a processor. This is both an extraordinary waste of energy resources, and a significant drag on the bottom line for AI infra players. Claros is the only company rethinking power delivery end-to-end, from chip to grid. They have two complementary products: an Integrated Voltage Regulator (IVR) that delivers power directly to the chip (the ‘last inch’ of power delivery), driving a significant improvement in energy efficiency per AI chip, and Power Gateway, a DC-native power management platform that eliminates the AC/DC conversion steps that bleed energy in legacy power stacks, potentially reducing distribution and conversion losses by up to 50%.

Claros is building the technology the industry needs to become more effective stewards of energy.

We couldn’t be more excited to back them. Read the full press release here.

Subbyx

We also recently announced our investment in Subbyx – the operating system for subscriptions to physical goods and our first investment in Italy. Subbyx enables an alternative consumption model based on access as opposed to ownership, promoting product refurbishment and reuse. Through their proprietary platform, retailers, businesses and consumers can access a wide range of new, used, or refurbished electronics on commitment-free subscription plans.

Alongside their product-as-a-service model, Subbyx has launched a SaaS platform enabling merchants and brands to create and manage subscription offers. Since going live in February 2024, Subbyx has scaled to over 2,500 store partners across Italy and 500+ company collaborations, managing over 20,000 active subscriptions.

Mixx Technologies

In December, we also announced our investment in Mixx Technologies. Mixx had an oversubscribed $33M Series A round led by ICM HPQC Fund and joined by TDK Ventures, Applied Ventures, G Vision Capital and other strategic partners. You can read the full press release here.

Mixx is tackling one of the most fundamental constraints on AI scaling, the networking fabric. Founded by engineers who worked across Intel’s silicon photonics transceivers and Broadcom’s first two co-packaged optics generations, the team has been at the cutting edge of every major connectivity leap for over a decade. Now they’re bringing that expertise together to build a full-stack optical networking platform for data centres - merging photonics, advanced packaging, and system architecture into a unified solution.

As the AI buildout accelerates and compute demand outstrips what today’s electrical networking infrastructure can deliver, Mixx is positioning itself as the foundational layer enabling faster, more parallelised AI infrastructure.

Jasper wrote a full article on why we invested in Mixx, which you can read here.

Portfolio News

Electrification

• Ohme’s partnership with Audi deepens (Q1 2026) - Ohme continued as Audi UK’s recommended home charging partner, with Audi offering a free Ohme Home Pro or ePod charger with every new EV or plug-in hybrid purchase through March 2026.

• ElectronX has officially launched its first U.S.-regulated power derivatives contracts designed for trading and managing intraday price volatility. The first products target the ERCOT market in Texas, where 40% of grid supply now comes from renewables, leading to regular strain during peak usage and extreme weather. Read the full article here.

Decoding nature

• Basecamp Research just recently announced the Trillion Gene Atlas - a landmark collaboration with Anthropic, NVIDIA, PacBio and Ultima Genomics to expand known genetic diversity 100x and collect genomic data from 100M+ species. The goal is to build foundation models grounded in how evolution actually works, compressing decades of discovery into years. Read the full announcement here. Additionally, NVIDIA finalised a pre-Series C investment in to BCR.

• InnerPlant 10x acre expansion planned for 2026, CropVoice coverage set to grow from 50,000 acres in 2025 to 500,000 acres in 2026 through agreements with agricultural retailers. Read the full article here.

• Greeneye Growing farmer adoption coverage, Nebraska corn and soybean farmer Brad Janzen featured in Precision Farming Dealer, details how Greeneye’s precision spraying system has transformed his weed management strategy. Coverage reflects broadening Midwest adoption across the company’s nine-state U.S. footprint. Read the full article here.

Applied AI

• Archetype AI, partners with NVIDA and T-Mobile to bring this new model of Physical AI to life. Read the full details here.

Team Spotlight

• Gemma Bloemen recently joined us as a Venture Partner and we couldn’t be happier to have her with us! Gemma brings experience from Creandum, Norrsken VC and Uber. Fun fact, Gemma has lived on 4 different continents and has seen the Killers live in 3 of those.

What we’ve been thinking

• Jasper, who focuses on our investments in Electrification and the future of compute, looked at NVIDIA’s $20bn quasi-acquisition of Groq, arguing it signals a critical shift within the AI infrastructure stack. By licensing Groq’s IP and hiring its core team, NVIDIA wants to invest in technology that delivers AI responses with minimal delay, something traditional GPUs have struggled to deliver. Read his full analysis on LinkedIn.

• George chaired a conversation on climate resilience at The Economist’s Future of Food Summit in London. The thread was clear: farmers are making hard commercial decisions to adapt to extreme weather not because they’re eco-warriors, but because they want to build enduringly profitable businesses. It’s a reminder that climate resilience is increasingly just good business. Read George’s reflections here.

• Louis argues that the real bottleneck for scaling agentic AI startups isn’t the technology - it’s deployment. In physical industries, integrating AI into legacy systems is slow and expensive, and Louis makes the case that we urgently need a new breed of systems integrators built for the agentic age. Read the full piece here.

• Sie Yin wrote on why robotics is hitting a genuine inflection point - driven by falling hardware costs, an influx of AI talent into the space, and labour shortages forcing manufacturers’ hands. She also maps out where we’re looking to invest across the stack. Read the full piece here.

Where we’ve been

• Jasper attended the NVIDIA GTC AI Conference in San Jose, one of the year’s most anticipated gatherings for AI infrastructure and compute. He attended several side events around Nvidia’s GTC conference as well as the conference itself. Events including a Plug & Play event focused on AI Infrastructure and Energy. While GTC itself was a big event with 100k+ people a key highlight for Jasper was a fireside chat with Groq founder Jonathan Ross about negotiating his company’s $20bn Nvidia acquisition in just three weeks!

• Sie Yin recently spoke on a panel at Imperial College London, where she discussed the role funders play in shaping the long-term impact of frontier technologies. The conversation highlighted the importance of weighing second-order effects early and reaffirmed our conviction that building responsibly and building for scale are not competing objectives but rather, complementary ones.

• Louis hosted a founder dinner in Paris with builders from across the AI stack. Key themes: talent is still the binding constraint, GTM efficiency matters more than ever, and building a durable moat is getting harder as frontier models advance every few months.

  

Where we’ll be

• George → Winterfest Europe GP Summit, Zermatt (12-14 April)

• Gemma → Winterfest 2026, Zermatt (13–14 April)

• Irena & Gemma → Energy Tech Summit, Bilbao (15–16 April) - Irena will be speaking on a panel on AI and energy

• Jessica → VC Platform Global Summit, San Diego (13-16 April)

• Irena & George → NY and San Francisco Climate week (20-23 April)

• Sie Yin → Mashup – Robotics & Physical AI Malmo (15-17 April)

• Jasper → ITF World – Antwerp (19-20 May)

Please let us know if you’ll be in town for any of these - we’d love to say hi!

What we’re reading

• Natures Laboratory: Naturally occurring genetic mutations in humans can serve as a preview of how drugs will work, potentially saving billions in failed clinical trials now that genome sequencing makes studying these “natural experiments” possible at scale.

• The Future of Petrostates, As peak oil approaches in the 2030s, oil-dependent nations face economic collapse and political instability, and even ambitious diversification efforts like Saudi Arabia’s Vision 2030 may not be enough to replace the lost revenue.

• The physical AI development gap: There’s a major gap between impressive robotics research demos and actually deploying robots reliably at scale, and closing it is essential for the US to compete with China in the emerging physical AI race.

• From Saas to AGaaS: Enterprise software is shifting from selling access to tools (SaaS) to selling autonomous execution of outcomes (Agentic-as-a-Service), representing a fundamental restructuring of how software companies create and capture value.

Insights from our friends at Systemiq Ltd

• Systemiq launched “Invisible Ingredients: Tackling Toxic Chemicals in the Food System” - a global assessment funded by The Grantham Foundation. Read the full report here.

• Systemiq Partner Rupert Simons spoke with Food Navigator on why Alternative Proteins still matter for Europe’s economy and food system. Read more here.

• Senior Director Tucken van Acken and our own George Darrah will be hosting an event focused on how to build an enduringly profitable agrifood business in turbulent times during SF Climate Week. Reach out if you’d like to know more!

The big lessons from markets this year is to beware consensus. Since “liberation day”, clean energy stocks are up 60% on average (ICLN ETF). Another supposed untouchable asset class, Chinese tech, is also up 60% since the lows in April (FTSE China Tech Index.) Meanwhile, the AI bears who have been calling for a correction since the summer are still waiting, as markets remain well below any signs of a true peak. And despite all the talk of a major rotation away from the US into global markets, the US still stands as the only game in town.

Beyond the headlines, we are most excited about fast improving compute, energy storage and automation changing the physical world. When it comes to so called “AI factories”, we see a path to a drastic 80%+ improvement in energy consumption per token which is even more bullish for AI applications – less so for the most expensive AI infrastructure stack.

Finally, climate tech is going through a re-invention in all sorts of unexpected ways. In the name of resilience, some investors are debating whether they should back lethal or non-lethal weapons. Others are reconsidering the first-of-a-kind business model which has largely led to tears so far. We remain incredibly excited about the opportunity to apply software-first technologies to the physical world, enabling lower emissions and better resource consumption.

Let’s jump into some of highlights at Systemiq Capital.

Portfolio company announcements:

• ElectronX (exchange connecting buyers and sellers of renewable energy) received full approval from the U.S. Commodity Futures Trading Commission (CFTC) to launch the exchange. Gaining approval was the biggest risk when we invested ten months ago. This is a huge milestone for the company, with the focus now shifting to commercial launch in December/January - with the top trading houses and renewable energy optimisers keen to get in on the action and work with the team at ElectronX. More news to come over the coming months but for now a huge win for the team.

• Did you hear about Basecamp Research (BCR)? As a reminder BCR links valuable proteins found in nature with biotech industry and is viewed as the “OpenAI of biology” was selected by NVIDIA as one of six UK companies for investment as part of Jensen Huang’s $2 billion commitment to UK AI. This gives the Basecamp team huge market validation and momentum as they gear up for their next round. This could see NVIDIA deploying $10’s millions of dollars into the company. We’re incredibly proud of the team of BCR as they’ve been heads down building a truly category defining company.

• Ohme has become the official home EV charging partner to SG Fleet, one of the UK’s largest fleet management and vehicle leasing companies for the private and public sectors. This summer, Ohme also announced a partnerhip with E.On Next in the UK to cut EV charging costs for consumers.

What our portfolio has been up to

• Circulor – Douglas Johnson-Poensgen was named in this year’s cohort on the TIME100 Climate 2025 list.

• InnerPlant Makes World’s First Real-Time Detection of Fungal Infection in Soybeans – They reported the first real-time detection of soybean fungal infection through its CropVoice™ disease alert network. – iGrow News.

• NatureMetrics announces Brazil office – The Global Nature Intelligence company has launched laboratory services in Brazil to bring world-class monitoring, reporting – eco magazine.

• ArchetypeAI – Pulse 2.0 interview with Ivan Poupyrev, CEO of our latest portfolio company.

• Jupiter – JLL and Jupiter Intelligence Expand Collaboration to Transform Real Estate with Unprecedented Climate Intelligence.

• Brimstone – Amazon Signs Deal for Low Carbon Cement with Brimstone.

• Q-Flow – has been selected for inclusion in the landmark ‘Catalogue of Solutions’, a comprehensive guide of clean and profitable products and services with the potential to change and improve the world. Set to be published at this year’s COP 30, the group chose Q-Flow due to its innovative approach to waste management, operational reliability, unrivalled interoperability, efficiency and, importantly, its high success rate in tangibly driving down emissions and saving resources on construction sites.

Team Spotlight

Elena Guglielmini - We are pleased to announce that Elena has now joined the team from HSBC Innovation Banking as our new Operations Associate. She will be at VC Comms forum in Berlin next month where she’s looking forward to meeting fellow Ops team members.

Fun fact about Elena: She speaks 5 languages, Italian, English, German, Spanish and Mandarin

What we’ve been thinking about

Jasper – Investment Associate at Systemiq Capital has been deep in the weeds as of late on Advanced Compute. Here’s what he has to say:

“We are entering a new era for computing infrastructure. After fifty years of steady transistor scaling, performance gains from traditional semiconductor approaches have plateaued. Meanwhile, AI workloads and the proliferation of smart devices are driving exponential demand for compute. This divergence between capability and demand creates a structural investment opportunity in next-gen compute.

The market is expanding rapidly. Data centers are on track to consume 10–12% of global electricity by 2030 (if trends continue), and 2024 saw more than $100bn in M&A as large technology firms compete for frontier compute capability. We see significant opportunities for technically credible founders with rich IP to scale commercially viable products…”

Would you agree? Jasper would love to hear your thoughts on this. Feel free to reach out to him on Linkedin.

Where we’ve been

This autumn, the team has hit the ground running with travel and meetings across the globe. Here’s a quick snapshot:

• Philip was at SuperReturn in Singapore, connecting with LPs in the region who remain highly engaged in climate investing.

• Jasper and Sie Yin attended The Drop in Stockholm, meeting founders and reconnecting with VC peers - both familiar faces and new connections.

• Jessica joined the VC Platform European Summit in Berlin for several days of industry networking.

• Irena and George attended New York Climate Week, where they spent time with founders, peer funds and LPs. They co-hosted a private dinner with our sister company Systemiq with industry leaders.

• Louis was in Vienna visiting portfolio company Podero and meeting founders locally.

• Philip and Irena were meeting investors in Malaysia, Singapore and Hong Kong in October, and hosted an investor dinner in Kuala Lumpur.

• Louis and Irena met founders in Austin and San Francisco last week. Irena also spoke at the WEF Urban Innovation Summit in the beautiful WEF building in Presidio, discussing resilience finance and ecosystem innovation with local government, insurance and finance leaders.

• Irena spoke at the 0100 conference in Milan, engaging in a highly entertaining panel about “the future of ESG and impact investing” alongside our friends at SOSV, Giant Ventures and Astanor.

Where we will be

• Philip – Nordics – November 17^th – 20^th

• Sie Yin and Jasper – Slush – Helsinki – November 19^th – 21^st

• Philip & George – SuperReturn Tokyo – December 2^nd – 6^th

• Philip & George – Hong Kong – December 7^th – 9^th

If you will be at any of these locations the same time as any of our team members, please do reach out!

What we’re reading

• Open source, open season on the AI power hype

• AI will supercharge grid utilisation

• Analog in-memory computing attention mechanism for fast and energy-efficient large language models

• Inside NVIDIA GPUs: Anatomy of high performance matmul kernels

• Green and intelligent: the role of AI in the climate transition

Insights from our Systemiq Ltd Partners

• Jeremy Oppenheim shares his reflections from New York Climate Week 2025

• New whitepaper sets out sustainable pathways for data centre growth

• A new report co-authored by Systemiq, and global experts shows how to embed nature in economic decision-making across policy, business and finance

• Powering up the world’s grids

Capital markets remain in the fog of tariff anxieties, Fed policy uncertainty, and geopolitical tensions. For the time being, inflation remains under control and Q2 economic growth is not (yet?) reflecting a slow-down in business investing and consumer confidence.

Amid the noise, a few clear trends are emerging when it comes to technology:

1. tech returns are dispersing beyond the Magnificent 7, seeking higher return investments that will inevitably come from high quality, VC-backed companies. Yet, equity markets need lower rates to induce some of the $7 trillion sitting in money markets back into risk mode. The “hunt for the next MAG20” is starting;

2. despite all the talk on AI, the US and Europe are unable to add enough power generation to increase compute and satisfy demand from a fast-electrifying economy. In Europe, decentralised power systems are booming with all that comes with it: batteries & electric equipment, power network experiments to increase grid utilisation, aggregation of all devices, negative power prices etc. Yet, new capacity added to the grid remains too small – and most importantly priced too highly as gas continues to set the marginal price. In the US, the latest attempt to curb green with the “big beautiful bill” energy might not succeed because renewables are the only game in town when it comes to new capacity available within a 5-year framework. With or without tax credits, regions that are rich on solar and wind resources will keep adding new capacity no matter what;

3. the next big wave of AI is coming to the physical world, moving beyond generative AI and the focus on language and context generation. The next exciting phase will be all about vision and planning, optimising physical environments like factories, transport, commercial facilities, the power grid, etc. Our sister company Systemiq recently published a paper on Nature quantifying the positive impact of AI on power, dairy & meat, and light road transportation – with a potential for 3.2–5.4 GtCO2e emissions reductions annually by 2035 in these three sectors alone.

This July’s newsletter includes:

1. Start-up spotlight: Station A & Greeneye

2. Team spotlight: Jasper Wigley, Philip Kasumu, Sie Yin Poh

3. Recap: Annual Investor Meeting & London Climate Week drinks event

4. Latest updates on our portfolio companies

5. Systemiq Capital Team in the wild

6. What we’re reading/latest news

Start-up Spotlight: Station A & Greeneye

In June, we backed two standout companies - one in Electrification the other in Decoding Nature. Here's why we’re excited about them:

Station A

In June we invested into Station A, a clean energy marketplace for commercial and industrial real estate owners. The round was co-led by Climactic and Building Ventures.

Station A’s software platform provides best-in-class intelligence on clean energy solutions for a portfolio of sites and then runs a competitive bidding process for contractors and financing through their proprietary network of providers. Their enterprise customers want to confidently buy financially viable clean energy and pay Station A to reduce complexity and shorten timelines by leveraging AI at every step.

Imagine a large school district or logistics warehouse operator looking to decarbonise dozens of buildings. With Station A, they can identify the most cost-effective clean energy option for each site and get it built, faster.

We are incredibly excited to support the three founders (Kevin Berkemeyer, Jeremy Lucas and Manos Saratsis) and their exceptional team on this mission – they have been working together for almost 10 years: they met at NRG Energy while working on an early iteration of this solution, and have now grown Station A into the leading marketplace for solar projects in C&I. The combination of the clarity of their vision and the sharpness of their execution is what gave us such high confidence that Station A can turbocharge solar penetration in C&I on both sides of the Atlantic.

Greeneye

Figure 1 George with Greeneye founder Nadav and the first Greeneye dealer, Jerry Hoech in Nebraska. Jerry expects to be retrofitting >50 Greeneye systems annually within 2-3 years.

We co-led with JVP the Series B round of Greeneye, an Israeli HQ’d precision agriculture company with commercial operations in North America, South America and Australia. Greeneye exists to dramatically reduce farm chemical usage while improving productivity and profitability.

Greeneye’s Selective Spraying System (SSS) uses proprietary sensors and AI algorithms to target weeds directly, reducing herbicide use by up to 95%. The system can be retrofitted to existing sprayers, making adoption seamless for farmers. In our conversations with dealers and farmers in the US mid-west we had a strong sense that this is one of the rare moments where a whole industry transitions to a new operating paradigm. In this case, from broadcasting herbicides and other chemicals, to precisely applying them only where they are needed.

Picture a field in the U.S. Midwest where a farmer currently sprays an entire crop with herbicides, regardless of whether weeds are present. Greeneye’s system allows them to spray only where needed leading to massive chemical savings, healthier crops, and lower environmental impact.

We’ve been incredibly impressed by the strength of the team, led by Nadav Bocher (CEO) and Tsuky (CTO). It’s very rare to find a group of people able to coherently combine cutting edge computer vision, GPU hardening, fluid dynamics and agronomics, while also being at home talking to their customers on the farm.

Team Spotlight

Jasper Wigley – promoted to Investment Associate

We’re delighted to announce Jasper’s promotion to Investment Associate. Jasper joined us with a unique blend of experience - from a specialist space tech fund to leading commercials for a blockchain coding start-up. His tenacity, drive and execution has been instrumental to the team and he continues to build out our expertise in advanced computing, space and much more. His promotion underscores our commitment to nurturing talent from within and empowering our team to push the boundaries of innovation and planet-scale problems.

Philip Kasumu – joined in April as Head of Investor Relations

We first met Philip when he was director of the emerging manager practice at SVB back in 2021 and have stayed close ever since. He joins us from Allocator One where he opened the London office to lead investor relations and fundraising.

Sie Yin Poh – joined in April as Investment Analyst

Sie Yin joins us from KPMG’s Venture Capital team where she developed a strong foundation in technology, commercial and financial due diligence, market analysis, and founder engagement. She’s focused on deal sourcing and execution across our three investment areas: electrification, decoding nature and applied AI.

Our Annual Investor Meeting & Hosted London Climate Week Drinks

June was a big month for us at Systemiq Capital. We had the opportunity of bringing our community together not once, but twice - first for our Annual Investor Meeting, and later during London Climate Week, where we hosted an evening of drinks, conversation, and connection.

At our Annual Meeting, we heard from some of the brilliant founders shaping the future across key areas of climate tech:

• Shely Aronov (InnerPlant) - Plant-powered intelligence for sustainable agriculture

• Sam Tegel (ElectronX) - Unlocking flexibility in power markets

• David Watson (Ohme) - Intuitive EV charging that supports the grid

• Doug Johnson-Poensgen (Circulor) - Supply chain traceability to drive transparency

• Max Jamilly (Hoxton Farms) - Cultivated fat to transform food systems

• Jade Cohen (Qualis Flow) - Digitising construction to cut carbon and waste

We were also honoured to welcome two powerful keynote speakers:

• Matthieu Ricard on how compassion and ethics can shape system change

• Sophie Hackford on the collision of nature and exponential technology

Just a week later, we kept the momentum going with our London Climate Week Drinks. The evening brought together founders, investors, operators and friends from across the ecosystem for a buzzing night of big ideas and bold ambition. From electrification and nature-based solutions to applied AI, the energy in the room was evident.

As we move into the second half of the year, we remain energised by our mission: Backing tech founders solving planet-scale problems.

Thank you to everyone who joined us in June, your partnership, support and energy make all the difference.

What our portfolio has been up to

• InnerPlant–named a 2025 BloombergNEF Pioneer for its climate‑smart CropVoice platform, which enables plants to emit early stress signals via genetically engineered fluorescence.

• Naturemetrics - HRH Prince William visited their labs, sampling eDNA with schoolchildren and calling it “the best day of my life”.

• Basecamp Research – Featured in the FT for building a “digital tree of life” through eDNA sampling in remote locations. Their work has uncovered over a million new species and boosted AlphaFold performance by up to 600%.

• Ohme – Announced partnership with E.ON Next pairing Ohme chargers with dynamic tariffs meaning drivers are able to charge a 49kWh EV battery from 0 to 100% for £3.29, giving 193 miles of range. Ohme also announced a partnership with XPENG, becoming their exclusive home charging partner for the UK.

• Hoxton Farms – building partnerships to bring cultivated port fat to Asia with Mitsui Chemicals and Sumitomo.

• ZeroAvia – are building a new hydrogen-electric aircraft facility near Glasgow Airport, UK—creating 350 new jobs and taking a major step toward zero-emission flight; are leading flight tests, back by a £10.8m Uk government grant to fast-track liquid hydrogen for commercial aviation and signed MOU with Loganair at the Paris Air Show to advance hydrogen-electric engines for 10–20 seat aircraft - stepping toward certification with the UK CAA.

Where We’ve Been

Europe

The team were out an about during London Climate Week in June, including hosting our own event of the summer. In the same week, we co-hosted a dinner for energy start up founders and investors together with our friends at SET Ventures and 2150.

George co-hosted a Food for Thought breakfast in Amsterdam with Systemiq, bringing together founders and senior supply chain execs in the agri-food supply chains. Read more about it here.

Jasper joined the Voyagers Climate Summit on the Camino in June. Read his reflections here.

Irena attended the Plug and Play summit in Milan in May.

George attended Sofinnova’s Industrial Biotech Day in Paris in May.

George and Jessica joined Consumer Good’s Forum’s Sustainable Retail Summit in January, alongside innovators and retailers.

U.S and Asia

George spent the day in Nebraska, visiting farmers and ag-equipment dealers to discuss the future of precision agriculture.

Jasper and Louis were at San Francisco Climate Week in April meeting founders and fellow investors.

Irena visited Singapore and Hong Kong in March, including attending the One Earth Summit. Read her reflections here.

Irena and Louis were in San Francisco in February meeting founders and investors.

Ops

Philip attended Super Return Berlin in June.

Jessica attended VC Platform summit in Miami in April and the Operational Leader’s drawdown in UK in June.

For live updates on team travels, make sure to follow us on LinkedIn.

Learn and Discover

‘Beyond the Self: Conversations between Buddhism and Neuroscience’, by Matthieu Ricard and Wolf Singer. In this book, Matthieu Ricard, a Buddhist monk trained as a molecular biologist, and Wolf Singer, a distinguished neuroscientist - close friends, continuing an ongoing dialogue - offer their perspectives on the mind, the self, consciousness, the unconscious, free will, epistemology, meditation, and neuroplasticity.

Decoding nature - computation and our physical world. George Darrah shares an overview of our investment thesis in Decoding nature: combining technology and nature to act on information we’ve never had before.

Escaping the Hype: Investing in What's Real, “Leaders on a Mission” podcast by Simon Leich. What happens when venture capital escapes the echo chamber of hype? In this episode, Irena Spazzapan, Managing Partner, uncovers how long-term, asset-light investments are reshaping the future of energy, food, and climate tech. Irena dives into founder mindsets, infrastructure bottlenecks, and why chasing trends won’t solve systemic challenges. Learn how targeted capital and sharp strategy unlock climate solutions that scale.

‘The WEIRDest People in the World’, by Joseph Henrich. Explore how Western, Educated, Industrialized, Rich, and Democratic (WEIRD) societies developed psychological traits—like individualism, analytical thinking, and a focus on personal rights—that differ markedly from most human cultures, both past and present. Henrich argues that these traits emerged from unique historical factors—especially the Catholic Church’s medieval bans on cousin marriage and its reshaping of family structures, which indirectly fostered the rise of impersonal institutions, markets, and rule of law. The book challenges assumptions in psychology, economics, and history by showing how culture and institutions shape cognition itself.

By Jeff Currie and James Gutman, The New Joule Order and The New Martial Plan explore how energy security is deeply linked to climate policies pursued by single countries.

‘Power and Prediction: The Disruptive Economics of Artificial Intelligence’, by Ajay Agrawal, Joshua Gans and Avi Goldfarb. n their bestselling first book, Prediction Machines, eminent economists Ajay Agrawal, Joshua Gans, and Avi Goldfarb explained the simple yet game-changing economics of AI. Now, in Power and Prediction, they go further to reveal AI as a prediction technology directly impacting decision-making and to teach businesses how to identify disruptive opportunities and threats resulting from AI.

The $5bn annual investment in early stage, climate tech. In our new report, we share how we define our “investable universe” and what we’ve learnt about its size from the past two years of tracking deals. Two years ago, we started gathering our own data to see how much early-stage funding is going to founders building in our sweet spot at the intersection of innovation and climate impact.

‘The Word for World is Forest’, by Ursula K. Le Guin. When the inhabitants of a peaceful world are conquered by the bloodthirsty yumens, their existence is irrevocably altered. Forced into servitude, the Athsheans find themselves at the mercy of their brutal masters.

Visit our news and insights page here, for more reads.

Insights from our Systemiq Ltd partners

• The Cleantech Reality Check series continues with a health-check on electrified industrial heat, long duration energy storage, and grids. Europe routinely speaks about ‘electrificaton’ as if it is happening. But data tells a diferent story: demand is flat – and has been for years. The much-touted electrificaton revolution in Europe is failing to materialise.

• Green and intelligent: the role of AI in the climate transition. AI could cut global carbon emissions by up to 5.4 billion tonnes a year by 2035 according to new peer-reviewed research co-authored by Systemiq and published in Nature journal npj Climate Action. And that reduction includes accounting for increased emissions from AI and data centres.

• “A Taste of Tomorrow” is the first study to look at the economic potential of alternative proteins for Germany, while also considering broader social and environmental benefits. The new analysis is produced with support from the non-profit think tank The Good Food Institute Europe. It finds that Germany is well placed to become a market leader in this growth sector. Alternative proteins could boost the German economy by up to €65 billion and create up to 250,000 jobs by 2045.

Where We Will Be...

Reach out to us if you want to meet up at any of these events!

Jessica - VC Platform European Summit – Berlin, Germany - September 11 – 12

Jasper & Sie Yin – The Drop – Malmo, Sweden- September 15 – 18

Philip – Super Return Singapore – September 16 – 18

George & Irena – New York Climate Week – September 22 – 24

Philip & Irena – Systemiq Malaysia Dinner, Singapore and Hong Kong Roadshow – October 6 - 10

Irena – WEF Convening on Innovation, Growth & Resilience – San Francisco - October 21-23

Jessica – Superreturn COO/CFO - Amsterdam, Netherlands – October 28 – November 1

Philip – Nordics Roadshow – Denmark, Sweden, Norway, Finland – November 10 – 14

Team – Slush – Helsinki, Finland – November 19 – 21

Philip & George – Super Return Tokyo – December 2 – 3

Philip & George – Hong Kong Roadshow – December 4 – 8

As we approach the end of 2024, we pick the US election and the bankruptcy of Northvolt as the defining moments of the year. As we write this from London, 7000 km from Mar-a-Lago, it is perhaps a bit easier to step away from the domestic polarisation. Now more than ever, we expect the unpredictable, but are also hopeful that a successful deregulation in permitting could greatly help in-the-money renewables, storage and EVs (the latter in the autonomous version where China is behind).

Unlike Trumponomics 2.0, the folding of Northvolt is less talked about, but it will go down in history as a defining moment of what has been known as “climate tech” for the past 5-6 years. A monstrous $15 billion bonfire could destroy what was left of growth investments in capex heavy, pre-revenue FOAK projects.

The downfall of Northvolt is the other side of the coin to the Chinese industrial surplus flooding into Europe. What will happen with tariffs between the US and China - with Europe caught in middle – will likely be the single most important factor influencing financial markets in the next few years.

Looking into 2025, we are incredibly excited about continuing to back asset light, data heavy startups, and continuing to partner with the best founders across Europe and North America. The world is changing with the electrification of everything, technology driving industrial efficiencies and the decoding of nature – accelerated by abundant compute. We are incredibly lucky to work with our inspiring founders and co-investors on advancing these trends in the new year.

Finally, a bit of team news. This quarter, we announced the promotions of George Darrah and Jessica Stewart to Partners, and Louis Millon to Principal. Our best investments are our people, and we congratulate these rockstars for their successes!

We wish you all a merry Christmas with your loved ones, with some time to recharge the batteries before starting the new year!

This December’s newsletter includes:

1. Portfolio company spotlight: Specifx

2. Systemiq Secondee: Dan Nima

3. Event Announcement: AI meets Manufacturing – Transforming Uncertainty into Opportunity

4. Recap: San Fran Founders Event

5. Latest updates on our portfolio companies

6. Systemiq Capital Team in the wild

7. What we’re reading/latest news

Start-up Spotlight: Specifx

In June we invested into Specifx, who are optimising energy consumption in commercial real estate. We joined a group of existing investors who we know and trust, including Powerhouse Ventures, Better Ventures, and Blackhorn.

Specifx is building a vertical Operating System (OS) for facility management, starting with HVAC devices, which represent the largest energy consumption and maintenance spend in commercial real estate (about 40%). They are solving the core problem of data scarcity within facility management, with most asset owners not even knowing exactly what HVAC devices have been installed in their buildings. This generates vast inefficiencies (up to 30%) in both operating buildings under management (e.g. over-consumption of energy in HVAC devices) and planning subsequent capital expenditure (e.g. devices staying in place long after useful life).

We are incredibly excited to support CEO Ryan Martineau and his amazing team on this mission – they started working together building and rapidly growing energy-as-a-service provider Redaptive, which recently reached a $1bn valuation with their latest $100m raise in October, and have demonstrated impressive execution speed in the 18 months since launching Specifx.

Systemiq Secondee: Dan Nima

This October, we welcomed Dan Nima on secondment from our sister company, Systemiq. Dan has brought fresh insights to our thinking on the intersection of AI and manufacturing where we are seeing a large pipeline of startups.

For a deeper dive into his findings, check out Dan’s first blog here.

The secondment program is a cornerstone of collaboration between Systemiq and Systemiq Capital, allowing us to draw on Systemiq’s exceptional talent and expertise while sharing the latest thinking on climate innovation. We look forward to welcoming our next secondee in 2025.

Breakfast Event, 22 January 2025: AI meets Manufacturing: Transforming Uncertainty into Opportunity

We are excited to co-host a breakfast with the venture capital arm of electronics company, TDK, bringing together industry pioneers, investors, and innovators to explore how AI can unlock a new era of sustainable manufacturing, one where transformative growth is decoupled from environmental cost.

If you’d like to join us, register your interest here.

Founders Hike and Dinner in San Francisco

In October, our Investment Partner, George Darrah, co-hosted a hike and dinner for climate founders with Nadeem Sheikh (PVG), Marie Thompson (Powerhouse), and Tom McQuillen (ReGen Ventures). The event brought together some of the most innovative minds in climate tech for an evening of connection, insights, and inspiration.

As technology cost curves fall, more startups are emerging at the intersection of foundational technologies like genomics, automation, remote sensing, and AI. The next generation of climate unicorns will likely be technology integrators, leveraging these advances to create transformative change.

At the dinner, founders Shely Aronov (Inner Plant) and Tony Martens Fekini (Plantible)shared invaluable lessons from building their companies who are redefining their industries by integrating multiple technologies.

Key Takeaways:

1. Ruthless Prioritisation – Focus relentlessly on ROI; it’s the ultimate metric.

2. Culture Shifts Are Crucial – Transitioning from project to product culture should be accompanied by turnover; if it isn’t, the shift likely hasn’t happened.

3. Start Commercial Conversations Early – If you feel “ready,” you’ve waited too long.

The combination of nature, innovation, and community made this gathering feel special! We’re already looking forward to the next - great ideas, like great companies, grow when shared.

What our portfolio has been up to

• InnerPlant– InnerPlant’s first commercial product - CropVoice recognised as one of TIME's Best Inventions of 2024, for helping farmers enhance crop yields with early detection of fungal disease in soybeans. The first-of-its-kind platform is rolling out in 2025 and will translate plant physiology into an early fungal alert system–providing farmers with actionable data directly from plants so they know exactly what crops need and when.

• Basecamp Research – in October Basecamp raised $60m Series B to scale its AI-powered database of life. The round was led by Singular, and other investors included S32, redalpine, vice-chairman of Roche André Hoffmann, chair of Royal Philips's supervisory board Feike Sijbesma and Paul Polman, former CEO of Unilever.

• Ohme - smart UK has chosen Ohme as its new and exclusive official home EV charging partner. The agreement will see smart recommend Ohme chargers to customers who need a home charging solution. Ohme chargers will be available to view in smart retailers, with Ohme providing a full solution including the charger and installation as well as retailer training and support.

• Qflow – In November Qflow announced integration with Procore Technologies Inc., the leading global provider of construction management software. This integration will help streamline reporting, easing the data capture for contractors on materials and deliveries, to simplify on-site reporting and help contractors improve sustainability.

• Naturemetrics ) – were nominated as one of the finalists for the Earthshot Prize in the “protect and restore” category.

• ZeroAvia – Aerospace Technology Institute (ATI) awards ZeroAvia its Project of the Year Award 2024. The HyFlyer II project delivered the revolutionary first flight of a 19-seat aircraft using hydrogen-electric power and helped ZeroAvia advance its first engine up to formal certification application.

• Apolitical– during Apolitical day in November, Robyn (CEO) announced that Apolitical will launch a Government Campus for Emerging Technologies. The Campus will fill a vast and urgent knowledge, skills and network gap that exists globally for public servants - empowering governments to be ready and confident for emerging technologies.

Where We’ve Been

Europe

Jasper and Louis attended The Drop Climate Tech Festival in Malmö in September.

Irena and Jasper attended Voyagers Climate Tech Festival: “The Heat” in London in September.

Jasper attended Sweden Sustaintech Venture Day in Stokholm in October. Read more about his reflections here.

George and Irena attended the Climate Leaders Forum in London in October.

George attended the Nutreco Event for Sustainable Protein Production in Amsterdam in October.

George and Jasper attended Slush in Helsinki in November. We were delighted to be selected in a competitive process alongside 19 other emerging managers to share our work with the RAISE LP community and enjoyed the opportunity to share why investing into the industrial transition is the opportunity of the next two decades! We also had the opportunity to partner with Cerulean Ventures, Superorganism and Earth to bring guests at Slush a Nightcap for Nature event – they brought together LPs and nature-funders, GPs and the founders who are working to tilt the economy toward nature-positivity.

George speaking at Slush x RAISE

U.S and Asia

Louis attended New York Climate Week in September where he had the opportunity to meet leaders from across business, tech, policy, academia, civil society in the climate space. Highlights included a “grid capacity” dinner, hosted by our venture partner, PVG; Systemiq’s “Blue Whale” dinner and the high concentration of climate founders met.

George attended the Tough Tech Summit in Boston in October.

Irena attended the Bhutan Innovation Forum in Paro in October. Read more about her reflections here.

Irena on a panel at the Bhutan Innovation Forum

Ops

Jessica attended the SuperReturn COO/CFO in Amsterdam and the VC Platform Europe in Paris in October.

Jessica at VC Platform Europe

Camilla attended a Scale Ops Dinner in London in October.

For live updates on team travels, make sure to follow us on LinkedIn.

Learn and Discover

‘Electrify, an optimist’s playbook for our clean energy future’, by Saul Griffith. An optimistic – but realistic and feasible – action plan for fighting climate change while creating new jobs and a healthier environment: electrify everything.

Farmers are super adopters. In a recent blog, George Darrah explains how farmers, as Superadopters, are key to scaling climate tech solutions. Historical examples like hybrid corn and herbicide-tolerant soybeans show just how fast adoption can happen when the conditions are right.

‘Has AI scaling hit a limit?’ an article from B2BaCEO by Ashu Garg. Ashu explains the challenges to scaling broadly by splitting it into three interrelated categories: data, compute, and the limitations of next-token prediction. Each represents a barrier to progress through more data, compute, and parameters alone.

Like It or Not: Geo-Engineering in Space May Hold the Keys to Climate Change. In a recent blog, Jasper Wigley dives into key trends and insights shaping geo-engineering today. If you’re building tech in this area or simply have an opinion, we’d love to hear from you.

‘On Grand Strategy’, by John Lewis Gaddis. On Grand Strategy applies the sharp insights and wit readers have come to expect from Gaddis to times, places, and people he's never written about before. For anyone interested in the art of leadership, On Grand Strategy is, in every way, a master class.

Semiconductor Progress, “Invest Like The Best” podcast: Chris Miller, author of Chip War, covers the geopolitical implications of the race for superior chip technology, how venture capital is playing the AI-driven boom in the industry, and where innovation is happening beyond just Nvidia.

The Heat 2024. Electrify Everything: The Power Challenge Behind Data Centres,. In her latest blog, Irena Spazzapan explores how the rise in AI capital expenditures is driving a “capex super-cycle,” with investments expected to reach $200 billion globally by 2025. The physical infrastructure for data centres will be a key constraint on the growth of next-gen models.

‘The Richest Man in Babylon’, by George S Clason. The ancient Babylonians were the first people to discover the universal laws of prosperity. In his classic bestseller, "The Richest Man in Babylon," George S. Clason reveals their secrets for creating, growing, and preserving wealth.

Visit our blog and news page here, for more reads.

Insights from our Systemiq Ltd partners

• New analysis from Systemiq shows that cultivated meat could contribute €20-85bn per year to the EU economy and catalyse 3.5Gt of emissions mitigation – if it receives the right investment and support.

• The global hospitality industry can collectively reduce its food-related emissions by 30% by 2030 according to a new white paper developed by Systemiq.

• Global Partner Christine Delivanis appeared on the EAT Fuel to Fork podcast, exploring how to decarbonise the food system. Christine will also be appearing at the Oxford Farming Conference in January on a panel, exploring this further.

• Systemiq Director Scarlett Benson spoke at the WWF Lovejoy Symposium on how to reach Positive Tipping Points in the Food System – listen back to the webinar recording –Scarlett 25mins 30secs in.

Where We Will Be...

Reach out to us if you want to meet up at any of these events!

Systemiq Capital team (co-host TDK Ventures) – AI meets Manufacturing Breakfast – London, UK - January 22^nd

Irena, George, Jessica ^– CGF Sustainable Retail Summit – London, UK – January 29^th

Irena ^– Meeting existing and prospective investors – UAE – Q1

Jessica – VC Platform Summit – Miami, USA – April 7^th – 9^th

Louis – meeting existing and new founders and the wider ecosystem – NYC, USA – April 16^th – 18^th

Louis & Jasper – San Francisco Climate Week – SF, USA – April 21^st – 25^th

Overall, H1 2024 has been marked by cautious optimism in the venture capital market.  Innovation remains the key driver of global growth in the face of economic and geopolitical uncertainties, and investors are increasing the deployment of the substantial dry powder accumulated in 2022-23. While deal count in Q224 was down ~50% compared to the peak in Q122, overall deployment is up for the second consecutive quarter with several $100m+ rounds driving down the deal count and up total deal value.

Venture capital investments in climate tech are continuing to normalise, returning to pre-2020 levels. Climate tech remains one of the top deployment areas in venture alongside AI. Verticals like proptech and carbon tech have seen the larger yoy decline (-40%) whilst energy has been the most resilient. The AI capex boom is showing no sign of abating, with $1TN+ of total spend projected by 2026. Graphic Processing Units (GPUs) consume significantly more power than Central Processing Units (CPUs) for the same tasks, requiring reliable baseload power for efficient operation in data centres. As hyper scalers expand, firm power and efficient grid management are becoming crucial in climate tech due to increased energy consumption. Climate tech is addressing these challenges with innovations in energy efficiency and renewable energy integration to support large-scale computing needs.

A further trend in climate tech has been the steep increase in non-dilutive funding of so called “FOAK” (first of a kind) start ups from the Department of Energy (DoE) in the final quarters before the US election. Equity funding for these capex-heavy companies has been declining steeply in the past 18 months and remains heavily exposed to political risk. It is unclear who would step into the DoE’s shoes in case of a change in administration.

Finally, M&A and IPOs are coming back – though largely outside of tech. Nominally, there are 1,400 unicorns in private markets that have raised in 2021-22 and have largely not come back to market. It is questionable how many of these “bubble unicorns” retain their past status, and this is slowing down IPOs.

At Systemiq Capital, we are incredibly excited about the convergence of electrification, industrial biotech and AI in driving global economies towards net zero. We continue seeing the best venture opportunities outside of FOAK. Home energy management including EV charging and HVAC (heating, ventilation and air conditioning), nature-based discovery biotech platforms and AI-driven optimisation are some of the areas we are most excited about. Below you can read more about our latest investment!

New Investment: InnerPlant

InnerPlant Team

We are excited to announce our investment in InnerPlant’s $30m Series B alongside a syndicate of large Canadian canola (rapeseed) farmers headed by Coutts Agro, an operator and agricultural investor, and returning investors Deere and Bison Ventures.

Innerplant is a US start-up building a system that allows farmers to optimise pesticide and fertiliser inputs applied to their fields, by developing crops that communicate their needs in-real-time to the farmer. Overapplication of pesticides and fertiliser inputs is a core issue for the agricultural system, with negative impacts on soil, water, biodiversity and human health. In the US alone, it’s estimated that pesticides and fertiliser inputs are overapplied by 30-50%, equivalent to >$5bn of annual costs to farmers.  

Innerplant supports farmers to apply the right input in the right amount at the right time. The company does this by genetically engineering plants to emit optical signals when the plants are under stress, such as when they lack nutrients or are being attacked by pests. Despite not being visible to the human eye, these signals are detectable from as far away as space, giving farmers the earliest warning possible to optimize action and protect their crops. 

We believe that Innerplant’s technology could fundamentally change how farmers manage inputs into their fields, from guesswork and lagging indicators of crop health, to responses that are informed by accurate, granular and real-time information directly from the plant to the farmer. Innerplant ‘gives plants a voice’ at scale for the first time.

InnerPlant is already making significant strides with their first commercial product, InnerSoy - a soybean that signals the early onset of fungal infection - currently piloting in the US mid-west in partnership with a consortium of early adopter farmers, agriculture retailers, input providers and seed companies. If you want to go one step deeper into how significant this could be for the agricultural industry, there is a great write-up by prolific ag sector analyst Shane Thomas here.

Reach out to George Darrah if you’d like to learn more about InnerPlant or our work on seed-trait and agriculture strategics.

Our Partnership With Purpose Venture Group 

We are thrilled to be partnering with Ari Matusiak, Nadeem Sheikh, Tony Curnes and Diana Rhoten and the Purpose Ventures Group (PVG) team.  PVG is a U.S. based strategic consulting firm focused on accelerating and scaling venture-backed solutions to climate change. 

Our successful partnership with our sister company, Systemiq Ltd., who offer advisory services and coalition building to accelerate climate progress, has bolstered insights and supported our founders with valuable climate connections. The new partnership with PVG will use the same model to strengthen expertise in sectors such as electrification and to support founders with their go-to-market strategies in North America.

Our teams have a long history of working together on climate solutions and we are already benefiting from PVG's wealth of experience in venture building, public and private markets, go to market strategy and scaling organizations across Opower, Lyft, Centerbridge, IDEO, the White House and more.  Read more here.

Team Spotlight: Jasper Wigley

Jasper joined the Investment team in early April from SpaceTech VC fund, Seraphim. He brings experience scaling out a number of software start-ups and a deep passion for nature. Since joining, Jasper has been on the deal teams for InnerPlant/Specifx and has been building out our thinking on Data & Digitisation for Climate (look out for a piece on what Starship may mean for Climate tech which he’ll share soon). Outside of the innovation ecosystem, Jasper is a keen hiker, bass-guitar player and jazz & blues fanatic.

Our Annual Investor Meeting and Climate Report

No one can go it alone in climate. It was very special to bring together our portfolio companies, investors and partners at Systemiq Ltd. and PVG at our Annual Investor Dinner and Meeting in June. Highlights included:

• Visiting portfolio company Basecamp Research and experiencing first-hand how they leverage the power of nature’s genetic diversity to solve global challenges

• Over dinner at the National Portrait Gallery which holds portraits of many inspiring innovators through time, we heard how our founders and their companies are pushing us towards net zero. 

• Learning from the ever-dynamic Greg Jackson, CEO and founder of Octopus Energy who spoke to Irena with honesty about what it takes to build a successful climate company

Read more about Irena’s reflections here and Jessica’s reflections here and check out our latest climate report, launched at the event, which highlights the significant strides our portfolio companies are making to address climate change and amplify the climate tech revolution.

Innovation in Proptech

From left: panellists Aida Mollaei (Adaptis), Evan Petkov (Optiml), Basil Demeroutis (FORE partnership), Elliot Marsden (Arup Ventures), Eva Smaga (Systemiq Ltd.), Mike Batley (Systemiq Ltd.)

Louis Millon, in collaboration with Eva Smaga and Mike Batley from Systemiq Ltd., brought together founders, investors and thought leaders to discuss how latest technologies can make it faster, easier and cheaper for real estate players to align investment strategies and capital allocation with climate goals.

We heard:

• Real estate professionals are more receptive than ever to renovation intelligence due to an increasing push from regulation (EPBD, SFDR), pull from the market (net zero commitments), and improved data environment. Owners and portfolio managers show clear interest in using data-driven insights to renovate their portfolio in the most cost- and carbon-effective way.

• A range of renovation proptech solutions are coming onto the market to serve this need. They use the latest technologies to generate renovation plans 'optimizing' for a given set of trade-offs. These include engineering needs, end-use, cost, revenue, regulation, and portfolio composition among others. 

• There is real potential for these tech solutions to scale and become a game-changer. But they need to continuously build trust and clarity on what they can do and how they fit in with the rest of the ecosystem. It is possible that many real estate owners are yet to clearly understand how solutions differentiate from each other and what is the core problem they solve. 

• Renovation proptech solutions alone cannot answer the question of 'impact on value' from renovation but can surely help. They can generate predictions tying renovation to financial return (exit/rent) that will become increasingly accurate the more data is processed. But this will ultimately be up to real estate professionals to go out with convictions and build the market for greener assets.

Read more about Louis and Eva’s thoughts on the space here.

What Our Portfolio Has Been Up To

• Basecamp Research (Fund II) – launches ZymCTRL a world-first, open source, generative AI tool that designs enzymes for more sustainable industrial processes.

• Ohme (Fund II) - GoPlugable has chosen Ohme as its official home charger partner in Ireland. GoPlugable is Ireland's platform for locating, reserving and sharing home charging points for EV drivers. Octopus Spain chose Ohme as its local charging partner. On the auto OEM front, Hyundai also chose Ohme as its smart charging partner.

• Qflow (Fund II) - Galliford Try's Low Carbon team is working with the Qflow team to build end processing back into the programme to enable reporting in line with client carbon reporting requirements and reduced post processing of data.

• Naturemetrics (Fund I & II) - with their state-of-the-art machine learning and eDNA data. Naturemetrics are helping transform Scotland’s conservation and nature restoration efforts through collaboration with the Scottish Environment Protection Agency (SEPA), NatureScot and the Scottish Government's Marine Directorate.

• ZeroAvia (Fund I) - has secured additional investment funding from American Airlines and new backing from Japanese industrialist ITOCHU Corporation, as it progresses plans to certificate its entry-level hydrogen-electric powertrains in 2025.

Where We’ve Been

Jessica joined 500+ VCs at VC Platform Global Summit in Miami in April.  She returned inspired by the practical examples of best-in-class platform execution and the impact it can have for founders and enjoyed connecting with many old and new friends in the VC community, including fellow climate funds (pictured with ArcTern, Wellington Management, MCJ, Clean Energy Ventures and Munich Re, among others, below). Read more about her reflections here.

Jessica at the Climate dinner at VC Platform Summit, Miami, April 2024

Irena and George attended SF Climate week in April. Systemiq Capital co-hosted the Gigaton Salon with our friends at Starshot Capital, together with Harvest, Impulse and the Abundance Institute. Irena and George had great conversations about load shifting, climate communications and the path to founding a company. They absolutely enjoyed talking to Joshua Levin, co-founder of OpenInvest, a J.P. Morgan company (and our portco before the exit to JPM) and listening to Eric Jen, the co-founder or our investment in Ren. Read more about their reflections here.  

Irena at the SF Climate Week Gigaton Salon, April 2024

Irena spoke at the AIM Summit in Abu Dhabi in May. She moderated a panel with CanvassAI’s founder Humera Malik, discussing how co-pilots are helping with the automation of processing industries. Irena also spoke at a panel about renewable energy at the same event.

Irena at the AIM Summit, Abu Dhabi, May 2024

Irena also attended the Sorenson Impact Summit in Park City in June. Convened by Jim Sorenson, this annual event brings together the impact investing community. Founders, GPs and LPs had the opportunity to bond around inspiring conversations and walks in the mountains. Some of the most memorable stories were Priscilla Sims Brown’s incredible path to a bank CEO, Galahad Clark’s fight with the “big shoe” industry, and Priya Parrish’ passion about expanding the pie of traditional impact investing.

Learn and Discover

Investing to save the planet, by Alice Ross, presents a salient truth: every investor - no matter how large or small - has the power to help address our climate crisis and build a more sustainable world.

Climate Capitalism, by Akshat Rathi., Ten inspiring breakthroughs from inside the global race towards zero emissions.

Chip Wars, by Chris Miller, an account of the decades-long battle to control the world's most critical resource—microchip technology

Principles, Ray Dalio, one of the world’s most successful investors and entrepreneurs, shares the unconventional principles that he’s developed, refined, and used over the past forty years to create unique results in both life and business—and which any person or organization can adopt to help achieve their goals.

Insights From Our Systemiq Ltd Partners

Seeing is Believing – a paper by Leaders of the Urban Future LOTUF, in partnership with Systemiq Ltd – presents the investor view on how to unlock the low-carbon real estate market with carbon data transparency.

Strategic resource consumption can deliver business goals - a recent business brief developed with WBCSD (World Business Council for Sustainable Development) shows how ambitious leaders can decouple value creation from resource consumption to build more resilient businesses and a healthier planet.
 
Business and nature can reap rewards from circular urban spaces - a new report published by the Ellen MacArthur Foundation with analysis and modelling by Systemiq Ltd. reveals that transforming how Europe’s towns and cities are built is key to unlocking massive economic, environmental and social benefits by 2035.

Where We Will Be...

Reach out to us if you want to meet up at any of these events!  

Jasper & Louis – The Drop – Malmo, Sweden. September 16-18

Irena – Founders Forum VC Summit – London, UK. September 18

Irena – Voyagers Climate Tech Festival – London, UK. September 20

Louis – NY Climate Week – NY, USA. September 22-29

Irena – Startuplab Summit and LP meetings – Oslo, Norway. September 23-24

Jessica – Superreturn COO/CFO - Amsterdam, Netherlands. September 30–October 2

Irena – Bhutan Innovation Forum - Paro. October 1-3

George – Founder meetings – San Fransisco, USA. October 8-10

George – Barcelona Climate Week – Barcelona, Spain. November 6-7

Jasper – Slush – Helsinki, Finland. November 20-21

What a year it has been! A rollercoaster interest rate environment put an end to a decade of cheap money, deflating risk assets and pushing almost $6 trillion in to money market funds by December 2023. Early-stage climate tech has largely followed the broader venture space with 6 declining quarters in terms of number of deals closed in climate tech. 

Looking to 2024, climate tech innovation will remain front and centre in a gradually improving macro environment. Our delegation of Systemiq-ers at COP28 witnessed a historical deal brokered by the UAE, the possible beginning of the end of the fossil fuels era. For the first time, the final agreement mentions a call on all 198 signatories to contribute to tangible targets such as tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030, abating methane emissions and transitioning away from fossil fuels in energy systems (see full list in Paragraph 28 here). Food has entered the COP agenda with the recognition that the nature agenda cannot be solved without dealing with land use exploitation. Most importantly, COP28 firmly shifted the traditional agenda of dealing with losses from abandoning the old “1.0 economic system”, to the potential unlocked by the new “2.0 economic system”.  

At Systemiq Capital, we are incredibly energised by the convergence of the three foundational technologies of our age, namely electrification, biotech and AI/next gen computing – making it possible to transition to system 2.0 in the next decade and avoid the worst effects of climate change.  

We wish you a restful holiday season, and a great start to a new year of system change towards net zero. 

Read on to learn more about… 

• Our 5th investment from Fund II into Ren Energy which aims to decarbonise supply chains by unlocking corporate demand for renewable energy   

• Welcoming Eva Smaga, our first secondee from Systemiq Advisory  

• Putting together our Value Creation Framework 

• What we’ve been up to: meeting all of you, working with our portfolio, participating in industry discussions, and fostering our team health 

First Secondee: Eva Smaga  

We welcomed our first secondee from Systemiq Advisory: Eva Smaga 

Eva joined us in October for a six-month secondment from our sister company, Systemiq. At Systemiq, Eva has been working extensively at the nexus of climate finance and the sustainable built environment.  

Supporting the investment team, Eva started to deep dive into proptech, fintech to unlock energy transition, controlled environment agriculture and next-gen compute & data-centers decarbonisation. She is also supporting portfolio companies, for example, she will help one to update their impact methodology to ensure it translates into accurate emission reduction potential.  

This secondment program is a strategic initiative designed to further strengthen our ties with Systemiq, with Eva acting as one of our 'official' bridges between our two organizations. Eva's role will be pivotal in ensuring that Systemiq Capital continuously leverages the amazing pool of talent and expertise that sits within Systemiq and Systemiq can access latest thoughts on climate innovation once Eva returns.   

A reminder, Systemiq is now a >400-people strong pure-play climate consultancy advising corporate pioneers, building industry coalitions and catalyzing large-scale capital to deliver climate solutions across sectors. Eva has been writing a monthly internal blog post to share her experience with her Systemiq colleagues – please reach out if you’d like to read it! 

New to the Systemiq Capital family: Ren  

We invested in Ren Energy, which aims to decarbonise supply chains by unlocking corporate demand for renewable energy. 

In November we made our fifth investment from Fund II into Ren Energy.  

Ren is a platform for corporates to streamline their path to 100% renewable energy. Their suite of tools solves the complex financial, technical, and logistical challenges associated with sourcing renewable energy to cover supply chain emissions. Ren can map out corporate supply chain energy exposure and explore the feasibility of different renewable procurement methods. Ren can also generate custom renewable energy portfolios tailored to help corporates meet their decarbonisation targets on time. 

Ren has a strong customer base in both the fashion industry and electronics industry, both of which have large supply chains and enormous decarbonisation potential. Our thesis is that decarbonisation of scope 3 emissions in these industries is difficult because of the highly complex and dispersed nature of their supply chains. We believe the solution to this requires powerful software solutions that can handle the data complexity, and strong personal networks within the supply chain.  We are delighted to work with co-founders Eric Jen and Morgan West on this mission. 

Systemiq Capital's investment, led by Amy Varney and Irena Spazzapan, will help Ren reach a broader network of customers and advisers, particularly in Europe and in fashion, given Systemiq Ltd has a strong fashion team within their Materials Platform. 

Ren co-founders Morgan West and Eric Jen  

Our portfolio has been busy 

• Basecamp Research (Fund II) signed their first biocatalysts deals with major pharmaceutical manufacturing companies, including with Johnson Matthey. Basecamp Research also launched a a documentary at COP covering their successful partnership with Costa Rica, a connection originally made through Systemiq.  

• Hoxton Farms (Fund II) moved into their new pilot production facility, took delivery of new stir tank reactors as they scale up their production, and were showcased in the Economist, Forbes and The Times.   

• On the back of a successful event at COP28, Apolitical (Fund I) spoke to the Times about the billions of pounds committed at COP28 that would be rendered useless unless civil servants improved their “climate skillsets”.  Apolitical is a learning platform and network for the 200 million civil servants in 160 countries. At COP28, 10 federal and regional governments including Brazil, California, UAE announced new pledges towards training government officials. 

• Ohme (Fund II) – Ohme was chosen as the official home charging partner of Polestar, Mercedes-Benz, Volvo, Norton Way Group and Pentagon Motor Group. Ohme was also named as Fast Track Company of the Year in the 2023 Green Business Awards and as Best Electric Charging Point Provider by Business Motoring 

• ZeroAvia (Fund I) announced the successful completion of a Series C round of $116m to advance net zero aviation with first of a kind hydrogen retrofits. 

• Charm Industrial (Fund I) announced the closing of a Series B round of $100m to accelerate its programme of permanent removals of atmospheric carbon dioxide via bio-oil sequestration. 

• NatureMetrics (Fund I) appointed a new CEO, Dimple Patel, to work alongside founder Kat Bruce to spearhead the global growth and digital expansion, in response to the rapid demand for nature monitoring 

Value Creation: Events Hosted  

Since Lydia’s arrival we’ve been working hard on putting together our Systemiq Capital Value Creation Framework. This is designed to help us guide our portfolio companies towards sustainable growth, operational excellence, and long-term success. It consists of three phases: Onboarding, Growth and Expansion, and Next Funding Round / Exit. Each phase contains a list of key actions we can take to provide support to portfolio companies and strategically leverage “Ecosystemiq”, the Systemiq network and ecosystem. We are working closely with Systemiq to understand priorities and leverage insights for our portfolio companies. During the diligence process, portfolio companies and our team collaboratively determine the most important and value-add action items to focus on. This approach ensures clear communication of our deliverables and reduces the risk of over-promising and underdelivering. 

Alongside advancing the Systemiq Capital Value Creation Framework, our commitment to fostering a vibrant and collaborative ecosystem extends to hosting a series of impactful events throughout the year. In 2023, the Hoxton Farms Lab Visit, Mark Cutifani’s Mining Tech fireside chat, and our roundtables at The Drop brought industry leaders together, fostering insights and meaningful connections. These events underscore our belief that true value creation extends beyond financial success, emphasizing the importance of building a resilient and interconnected community. Looking ahead, we're excited about more events enriching our ecosystem and steering a collective journey towards sustainable growth and shared success. 

 Where We’ve Been 

Photo credit: Techsylvania 

Amy spoke on the impact stage at tech conference ‘Techsylvania’. In her talk, ‘Has Climate Tech Graduated?’, she spoke about the financial and impact opportunity of investing in climate tech. Amy also visited founders, investors and the new Systemiq office in Berlin, as well as visiting founders and investors in Seattle whilst on a due diligence trip for the Ren investment. 

George visited Boston and NY in July for LP, investor and founder meetings, including holding an informal evening event with our friends at the Homeworld Collective in Boston with climate-tech investors and entrepreneurs. George travelled to Nebraska in October, visiting ethanol facility operators and corn farmers searching for new applications for corn in biobased chemicals, culminating in a dinner with the Governor of Nebraska.  

Lydia and Irena attended COP28 in the UAE and co-hosted various events including (1) Ocean Innovation Roundtables with the Prince Albert II of Monaco Foundation, (2) Apolitical event with UAE Prime Minister and Bezos Earth Foundation, (3) “Earth Shots” panel with Deep Science Ventures at the Bahamas pavilion (photo below), and (4) Dinner with Deep Science Ventures and YPO bringing together a broad range of existing LPs, prospective investors, founders and key stakeholders across the climate tech ecosystem. 

From left: Thane Campbell, Barbara Diehl, Irena Spazzapan, Gianpiero Menza

Jessica attended SuperReturn COO/CFO in Amsterdam which was a great opportunity to pick the brains of fellow fund managers and service providers on a wide range of topics including fund domiciliation, carried interest, valuations, fundraising, marketing and talent.  Next year, she’s looking at joining the VC Platform Community Summit in Miami to be inspired by best practice from US VCs, Invest Europe’s COO/CFO Forum and the Drawdown Ops Leaders Summit.  Please do reach out if you’ll also be joining – would love to connect. 

Learn and Discover  

• Urban Partners’ “Decarbonizing the Built Environment, Together” OpEd piece by Mikkel Bulow –Lehnsby (Chairperson, Urban Partners) and Jeremy Oppenheim (Senior Partner & Co-Founder, Systemiq)  

• Decoding Bio published an inaugural edition of the “Decoding Bio Snapshot”, it profiles several dozen companies operating at the intersection of computation and biology, ranging from pre-seed to publicly traded, including our portfolio company Basecamp Research.  

• Fascinating podcast episode titled "Why Is It So Hard and Expensive to Build Anything in America?" from Freakonomics – it explores the decline in construction productivity and the failures of disruptors like Katerra in prefab/modular construction.  

• With the passing away of Charlie Munger, his insights about the flaws in investment judgement are always relevant: 1995 Harvard speech about the Psychology of Human Misjudgement 

Insights from our Systemiq Ltd partners 

• Broader supply-chain background for EVs and energy-transition metals.  Advancing Sustainable Battery Recycling sheds light on the environmental and social impacts and risks of recycling electric vehicle lithium-ion batteries and proposes ways forward to ensure a sustainable future – including 10 industry principles.  

• How businesses can manage nature risk. A white paper for our advisory team on going beyond nature-framework compliance (SBTi, etc) and making ‘nature positive’ part of the corporate strategy conversation and supply chain planning. Bitesize examples from mining, fashion, and food, and a bigger case study – co-developed with Metabolic - on food & beverages. 

• “Delivering Net Zero for the Food Sector”.  A white paper that analyses the challenges that global food companies face in achieving their net zero strategies – and shows how they can overcome them. It also summarises how Systemiq engages in transforming global food and land use systems. 

• Hot off the press from COP, and with a methane / energy angle, from Capterio CEO Mark Davis: Making the Oil and Gas Industry’s Major COP28 Announcements Truly Impactful 

Team health... 

Guided by Alan Millard from The Table Group, the team spent time together in the Cotswolds for our bi-annual team retreat.  We focused on strengthening our ways of working together, refining our shared purpose and strategic direction, and setting our goals for 2024. Team health remains a top priority and we're excited to carry this momentum into the upcoming year. 

Where we will be in Q1  

• In January Irena and Jessica will be on the US East Coast for startup and Ecosystem meetings and look forward to meeting existing and prospective investors 

• In February Irena will be on the West Coast, speaking at the Institute for Private Investors Winter Forum 2024 in Los Angeles 

• In March Lydia will be in Canada and the US East Coast for LP and Ecosystem meetings and looks forward to speaking at Private Equity International NEXUS 

• In January Amy will be visiting startups in Berlin and Munich. 

Thank Yous  

A special thank you to everyone who went above and beyond over the last several months with introductions, diligence, advice and help:  

Ahmad Butt, Ben Onyemem, Brittany Harris, Clara Luckner, Damien Scott, Dan Nima, Ed Steele, Fiona Howarth, Georgina Flemming, George Polk, Glen Gowers, Jade Cohen, James Bilefield, Jennifer Ring, Jeremy Brewer, Jeremy Oppenheimer, Katherine Stodulka, Lamia Senousi, Mark Cutifani, Max Jamilly, Oliver Vince, Paul Fletcher, Paul Polman, Sebastian Polman, Sophie Herrmann, Taraneh Azad, Thane Campbell 

Climate tech is continuing to witness significant tailwinds, spurring governments, corporates, and investors to allocate more funding to climate tech solutions. According to the IEA, for every dollar invested into fossil fuels, about $1.70 is going into clean energy. Five years ago, this ratio was one-to-one. Solar power generation in particular is set to overtake investment into oil production for the first time in history this year.  

Global awareness and the need for urgent action are on the rise, with the IPCC and WMO reports confirming that average global temperatures will surpass 1.5 degrees by 2040, and likely before 2027, on an annual basis. Early 2023 saw the hottest temperatures ever recorded in South-East Asia, but also some momentous policy steps. The EU is working to counterbalance the IRA with a streamlined Green Deal Industrial Plan. And the US announced over $1bn of new funding available to scale up domestic biomanufacturing infrastructure. 

Systemiq Capital’s investment thesis is very much centred on the three foundational technologies playing crucial roles in driving climate progress: electrification, biotech, and next-gen compute. Cost curves across all three continue improving, drawing in world-class talent with the ambition and technical expertise to build game changing companies, and the mission-alignment to do good for the world. We are seeing an influx of experienced founders pivoting into climate tech... please continue sending them our way! AI in particular has generated a lot of excitement recently as people have discovered what large language models (LLMs) are capable of – representing both a challenge and opportunity for the climate. These models are incredibly expensive and energy-intensive to train, leading to dire warnings and tempered expectations. But training costs are dropping quickly, down 70% since 2020, and are expected to continue falling at 70% annually¹. We believe that AI will drastically improve energy optimisation, monitoring of environmental data and resource efficiency – getting us closer to avoiding the worst effects from global warming.  

Yet, the market exuberance of the last several years has corrected also in climate tech, with deal volume dropping by 36% YoY in the first quarter, and valuations dropping even further. We expect this trend to continue and normalise to a structurally more sober economic environment linked to a higher cost of capital, limiting the excesses of the past years. This new economic reality, coupled with an incredible flow of talent into climate, favourable regulatory tailwinds, and falling technology cost curves, makes this the most exciting macro environment to invest in climate tech ever. 

We’ve been busy since our last update: 

• We recently completed our 4^th investment out of Fund II, leading the Series A in construction tech pioneer Qflow. 

• We welcomed Lydia Guett to the team as Head of Growth, and announced her and Matt’s joining earlier this month, with news of the announcement covered in more than a dozen publications. 

• We went deep into the fashion and textile category, with Amy Varney publishing some of our thoughts on opportunities for innovation in the fashion supply chain. 

• Finally, we’ve been on the road, meeting all of you, working with our portfolio, participating in industry discussions, and preparing for our first AGM. To our founders and LPs, we look forward to seeing many of you there in just a few weeks’ time. 

Those are the highlights. If you’d like to learn more about what we’ve been up to, read on. 

New investment: construction-tech pioneer Qflow  

Last month we closed our fourth investment from Fund II, leading the Series A round in construction tech startup Qflow. The company was founded by two industry insiders who set out to use machine learning and computer vision to reduce construction waste and improve the quality of data available on the built environment. Over several years cofounders Brittany Harris and Jade Cohen (picture above) have generated rapidly increasing revenues helping customers including Landsec, Balfour Beatty, Bouygues, and HS2 to track the materials that arrive at their sites; identify dangerous, polluting, improperly sourced, or otherwise non-compliant materials before they’re installed; increase material recycling / reuse; and ultimately reduce waste across the industry. 

At the core of our thesis is that you simply can’t get to net zero with a pencil and a clipboard: data-driven decision-making, based on what’s really happening on-site instead of what the architect’s plan was, is fundamental to transitioning toward a lower-carbon, circular construction ecosystem. Qflow collects, cleans, and verifies the as-built materials and waste data and makes it available to other key systems (finance, ERP, compliance, etc.) so that identifying real opportunities to reduce carbon and waste becomes simple and efficient. 

We were joined in the round by construction and real estate heavyweight Bridge Investment Group, “proptech” VC specialists GroundBreak, Greensoil, and Gravel Road, and were particularly excited to welcome existing Qflow customer Grosvenor into the round. Quite the endorsement! 

Matt has joined the board of the company, and is supported by our emerging “sustainable urbanism” expert Louis who championed the opportunity. Reach out to them if you’d like to learn more about Qflow or our work on the sustainable real estate and construction theme. 

Lydia and Matt’s joining announcement 

After a long search we were thrilled to welcome Lydia Guett to the team as Head of Growth in early April. Lydia’s experience as a Sustainable and Impact Investing Specialist at Cambridge Associates will be gamechanging for us, our LPs, and portfolio companies as we work to turn Systemiq Capital into the standard-bearer and quality mark for value-add VC investing in climate tech. Here she will grow and nurture the climate ecosystem—connecting investors, portfolio companies, and the wider community. She is also the last “piece of the puzzle” in our organisational design for Fund II, bringing entirely unique perspectives and capabilities to our built-for-purpose team.   

Lydia joining was a great moment to also formally highlight Matt's role in the team. Matt has been part of the Systemiq Capital story since 2021 and is now GP alongside Irena. We were thrilled to formally announce his and Lydia’s news in a press release on 8 May, and grateful for the extensive coverage of the announcement in Fortune, Business Insider, Venture Capital Journal, TechCrunch / StrictlyVC, and Dan Primack’s Axios Newsletter. We are enjoying seeing Systemiq Capital and our portfolio companies’ names more and more frequently in the media and look forward to it being an ordinary occurrence! 

Our portfolio has been busy 

• ZeroAvia (Fund I) made aviation history in January, flying the largest-ever aircraft to be powered by a hydrogen-electric engine. The 19-seat Donier 228 took to the skies, retrofitted with a full-size prototype hydrogen-electric powertrain on the left wing of the aircraft. The flight took off from the company's R&D facility at Cotswold Airport in Gloucestershire, UK and lasted 10 minutes. ZeroAvia will now work towards its certifiable configuration to deliver commercial routes using the technology by 2025. In May, ZeroAvia announced a partnership with Alaska Airlines to retrofit a 74-seater to hydrogen. Julian Renz, ex Systemiq-er and now head of government programs and impact at ZeroAvia, will be at our AGM in June and you can ask him more about the historical achievements of the past months (and years!). 

• Charm Industrial (Fund I) - Frontier announced its first significant commitment of $53 million to Charm Industrial. This is the first legally binding offtake agreement to remove 112,000 tons of CO2 from the atmosphere between 2024 and 2030, a huge step forward for the removals industry. In addition, JPMorgan announced a $200 million investment in carbon removal – including 28,500 tons of C02 from Charm over 5 years. Charm Industrial utilizes an innovative method to sequester carbon dioxide by converting excess organic material, such as corn stover, into bio-oil. This bio-oil is then injected into abandoned oil and gas wells, effectively storing the carbon dioxide underground.  

• Microbyre (Fund I) – the team reached a significant commercial milestone in Q1, signing their first joint development agreement with a multi-national chemical company. This project will see Microbyre and their partner jointly develop a process for scaling up production of a key chemical, using a proprietary bacteria developed by Microbyre. Sarah Richardson, Microbyre’s CEO, will be coming from the US to London for our AGM in June, and will be delighted to share more about the company’s unique data acquisition process for understudied bacteria. 

• Basecamp (Fund II) - a team of scientists from Basecamp took a trip to million-year-old underground caves and central Europe’s largest lake in central Hungary with a senior reporter from Sifted Climate Tech. The team demonstrated how Basecamp collects microbes to extract and analyse their DNA.  

• Ohme (Fund II) - Audi UK chose Ohme as their new official smart charger partner. Under the agreement, Audi will actively endorse Ohme chargers for all its EV sales. As part of this collaboration, Audi will showcase an Ohme Home Pro charger in its showrooms, allowing customers to observe and experience the product firsthand. Ohme has also expanded its range of home chargers with their new product, the ePod. With its untethered charging capability, the new ePod  will offer universal charging compatibility for all electric vehicles. This technological advancement will not only broaden Ohme's market presence but also enable the company to effectively penetrate new markets, particularly those associated with new build environments. 

Amy explored the state of play in textiles and fashion 

Amy has been exploring textile innovation and how this applies to various industries including fashion, automotive, aviation and furnishings. She has particularly focused on the potential for innovation within the fashion supply chain. In her blog entitled "Textiles and Fashion Need a Serious Makeover," Amy outlines the four key tiers comprising the supply chain and articulates the pivotal functions fulfilled by each tier in the production and distribution of fashion products. Each tier, from raw material extraction (tier 4) through to garment assembly (tier 1), has the potential for disruption that could be transformative and have positive climate impact. 

Everything else

We were excited to announce the launch of the Venture Climate Alliance alongside 20+ of our VC peers, under the GFANZ alliance. Together, we will work to drive progress towards net zero goals within our firms and our portfolio companies.  

With our friends at Systemiq Ltd we’ve started preparing to co-host events around COP28, which is being held in December in the UAE just after the Abu Dhabi Finance Week. We expect we’ll have more to share on that soon, but do reach out if you’re planning to attend.  

George co-hosted a Transatlantic Climate Tech Happy Hour in San Francisco with our friends at seed funds Jetstream and Starshot Capital. We hosted over 100 climate founders, CTOs and investors to share the latest from Europe, including discussing developments in Europe’s response to America’s climate manufacturing stimulus, and also greatly enjoyed meeting old and new friends. 

Amy recently returned from the SynBioBeta conference in the Bay Area, where she connected with climate biotech startups and industry representatives and was part of a panel discussion about the UK’s path to becoming a synthetic biology superpower. 

Lydia has hit the ground running, attending The Economist Sustainability Week and Google Cloud Climate Tech Leaders Day in London in her first two weeks, and Summit in Miami last week. She will be at SuperVenture in Berlin in early June.  

Irena has been busy, not only in the UAE in preparation for COP28. She was in California for the UCLA Climate Action conference in March, discussing company building and catalytic investments in carbon management. In May, she participated in Iceland Innovation Week at the “OK, Bye” summit hosted by our friends at Transition Global. And last month she spoke to Sherry on the Funding a Better Future podcast, where they covered a range of topics including:   

• Systemiq Capital’s origin, goals and visions   

• Opportunities and funding landscape for climate tech companies  

• Parts of the sector that are less hot and those that are more exciting/up and coming  

• Advice for founders who are raising series A/B rounds  

Jessica spoke about impact investing and ESG alongside a number of emerging managers at an Emergent event, part of our commitment to ecosystem building. 

Jessica on a panel with other emergent managers;  Irena visiting the Orca DACC project in Iceland 

Interesting reading 

• “Water, a Biography”, by Giulio Boccaletti, which proposes that our institutions are intimately linked to civilisation’s relationship with water and reflects on the incredible achievement of taming water that the 20^th century delivered. 

• “Shoe Dog” by Phil Knight” – the insightful and inspiring story of Nike’s founding and growth.  

• Schmidt Future’s “The U.S. Bioeconomy: Charting a course for a Resilient Course for a Resilient and Competitive Future” Bioeconomy Strategy Report  

• BloombergNEF’s “Liebreich: The Unbearable Lightness of Hydrogen” thought piece by Michael Liebreich 

• ClimateHack’s “How Will Biology Help Us Achieve Our Climate Goals?”, a conversation with Edward Shenderovich, Co-founder and CEO of Synonym  

• The White House Office of Science and Technology Policy’s “Bold Goals for U.S. Biotechnology and Biomanufacturing”, harnessing research and development to further societal goals  

• Michael Demsey’s “The End of Narrative-Only Deep Tech Companies” which highlights the importance of solid commercial traction in deep tech.  

Latest News from our Systemiq Ltd partners 

• The new, technology-driven, sustainable growth story represents the greatest investment opportunity since the industrial revolution: Systemiq and the WEF teamed up to articulate the impact of AI upon the transition to net zero, releasing this report in January. The extraordinary developments in large language models in the past few months, such as Meta’s LLaMA, are set to accelerate this further.  

• Electric vehicle batteries are driving low-carbon travel. A battery passport, as mandated in the upcoming EU Battery Regulation, is a digital record of its production and usage; it will be crucial for repairing, reusing and recycling batteries – and keeping the EV industry growing. The Battery Pass consortium, led by Systemiq Germany GmbH, has produced the first publicly available content guidance for the industry.  

• “How to Make the Money Flow for a Net-Zero Economy”? That’s the central question of the Energy Transition Commission’s report. Which puts the capital investment need at around $3.5 trillion a year between now and 2050. Two conceptually different categories of financial flow will be required for the transition – capital investment and concessional/grant payments – for early coal phase-out, deforestation and carbon dioxide removals. 

• Every year, Europe constructs more buildings, roads and infrastructure using highly energy-intensive materials – and they go under-used. Writing in BusinessGreen, Julia Okatz explains how more resource-efficient cities could cut 25% of their GHG emissions, and become more desirable places to live. 

• “Regenerative ag is driving food sustainability promises, but is it greenwashing?” Food Dive speaks to Theo Ewer of the Food and Land Use Coalition about how large companies in North America are engaging with regenerative approaches. 

Thank You’s  

A special thank you to everyone who went above and beyond over the last several months with introductions, diligence, advice and help:  

Ahmed Butt, Elias El Mrabet and Mattia Romani for being great partners in COP28 conversations. Alex Iskold, for introductions and podcast recommendations. Alex Laskey, Andriy Mykhaylovskyy, and Jeremy Brewer for your partnership and impactful introductions. James Cameron for helping a portfolio company with strategic advice. Lian Michelson for the introduction to QFlow! The Mills Fabrica team including Dominic Deane and Gabriele Verikaite for hosting some great events and thought-provoking discussions. The Mundi Ventures team for welcoming us to their innovation day in Madrid. Sasha Vidiborskiy for being a wonderful sounding board and connector. Veronica Chou for several excellent conversations about fashion and founder introductions. Yassin Alsuroor for continuing to guide us in the Middle East. 

As we draw to the close of 2022, climate tech continues to boom despite a massive adjustment in the tech industry. According to Pitchbook, Q322 was the 3rd strongest quarter on record for climate tech with a total VC deal value of $4.8B (only Q221 was higher at $5.4B). Overall, 2022 climate tech VC deal value is tracking to match 2021, led by the post-IRA boom in the US. CTVC estimates dry powder across VC and growth/PE in climate to be north of $30B, concentrated in growth equity and PE. Similarly, broader VC dry power is also at record highs, estimated at $300B. Despite the crypto and tech crash, 2022 has already broken the record in terms of overall VC funding with $151B raised in the first 9 months of the year. 

We are expecting 2023 to be a very different year for VC and climate tech as the world economy adjusts to the double shock of structurally higher inflation and rising interest rates. Rising rates are a net negative for the VC industry, as future cashflows have a lower net present value. Climate tech investments (and venture in general) are likely to shift towards opportunities that can generate positive cashflows sooner, and (deflationary) enablers that allow to do more with less. With the exception of investments benefitting directly from IRA support, we are seeing a reversion to valuations and revenue multiples in line with pre-Covid public markets, as opposed to the purely FOMO-driven markets of the past 24 months.  

Against this backdrop, high quality founders continue flowing into climate tech – particularly as other areas in VC have dried up a lot faster and tech companies continue to “rightsize” after their 2-year hiring binge. Increasing high quality talent in climate tech is perhaps the single most interesting variable as we go into 2023, supported by climate policy and the broader corporate decarbonisation agenda.  

During the holiday season, we found ourselves reflecting on the past year and those who have shown us continious support. In November we hosted our first Climate Tech Drinks event, where various VCs, investors and some of our portfolio companies joined us. This month we achieved the second close of our Fund II with $100m raised to date.  Thank you for giving us the chance to do what we are passionate about! We hope that this year has been just as memorable for you, your colleagues and your loved ones. May your holidays and New Year be filled with joy! 

Team Retreat… 

Systemiq Capital team dinner  

The team attended our first retreat in the countryside near London, led by long term friend of Systemiq, Alan Millard (The Table Group). The event exceeded expectations. Day 1 focused on building a deeper understanding of the team as individuals and of how we operate together. During Day 2, we focused on articulating our shared purpose, values and strategic anchors, and rounded this out with a practical session on running effective meetings. We left the offsite feeling like an even more cohesive team that understands how we can more effectively achieve our goals together and have put into action many of the practical recommendations. We plan to continue working with Alan and investing further in building our strong, high-performing team.

We invested in Ohme, which provides smart charging solutions to electric vehicle owners  

Pre-Ohme board dinner drinks in Cork, Ireland 

In October we made our third investment from Fund II, leading Ohme's recent fundraise. Ohme is a highly mission driven company, with a vision to speed up the transition to clean energy. They are building a network of distributed and connected users, customers and devices that maximizes value for EV drivers, OEMs, dealerships, fleet companies and energy companies. It uses a sophisticated set of hardware, software and data systems to manage, optimise and productize energy flows, consumption data, and customer behaviour. 

Ohme is obsessed with customer satisfaction. They work closely with fleet managers such as Motability and the NHS, and they recently became Volkswagen's preferred EV charger provider in the UK. 

Systemiq Capital's investment, led by Amy Varney, Irena Spazzapan, and Georgina Fleming, will help Ohme expand into new European markets where the demand for EVs is increasing rapidly. We made a small investment into Ohme's previous fundraise in 2021 and have been continuously impressed by their phenomenal team, led by CEO Dave Watson, Chairman Derry Guy, and COO Marie Barber. 

What our portfolio companies have achieved in Q4 22  

• Basecamp (Fund II) – The Basecamp team hosted the Costa Rican ambassador to the UK, as they advance on signing a very significant biodiversity access agreement with Costa Rica, which will enable them to scale the source of genetic information from the country. We supported Basecamp by making the original connection to the Costa Rican government, with help from our partners in Systemiq’s advisory business. Big thanks to Fede for making the initial connection, and Guido for coaching the team on building trust at the highest levels of government.  

Basecamp has also been featured in Forbes, WSJ and Sifted as they announced their $20 million Series A round led by Systemiq Capital to continue their search for proteins in nature that could benefit companies in industries such as healthcare, nutrition, and cosmetics. 

• Hoxton Farms (Fund II) – The team and broader industry received a major boost in November when an important milestones towards regulatory approval for cultured meat was achieved. The US FDA concluded that Upside Food’s cultivated chicken is safe to eat, although it is not yet approved for sale. A relatively unbiased article here explains the significance of this in more detail. 

• Ohme (Fund II) – Volkswagen chose Ohme as their preferred EV charger after a thorough evaluation of all solutions available in the UK market. The agreement extends to the Volkswagen, Volkswagen Commercial Vehicles, Skoda, Seat, and Cupra brands, and will see the company and its dealers recommending Ohme chargers to customers. Showrooms will also display Ohme Home Pro chargers, spreading awareness and helping customers overcome uncertainties about home charging and EVs in general. This is an enormous deal for Ohme, in parallel to UK fleet Motability going public in early December about the success of their initial pilot.  

• Naturemetrics (Fund I) launched a worlds-first nature performance monitoring service powered by eDNA. The video they’ve put together here contains both beautiful visuals and a clear articulation of what they’ve built. This could be a gamechanger for the way businesses, governments, and NGOs measure their biodiversity impact.  

• The Routing Company (TRC) (Fund I) has moved more than 200,000 people since the launch of its Pingo platform in 2021. TRC’s patented routing technology facilitates on-demand pooled transit for municipalities, corporate campuses, and universities across three continents. Its Ride Pingo app is rated 4.8 – the highest of any on-demand transit app. 

Irena, Louis and Georgina explored the Capex Boom, Techno-Optimism and Circular Mobility... 

• Irena has been thinking a lot about the convergence of new monetary conditions with the climate urgency in the next 20 years, which will be the most critical for the future of humanity. Her thought piece on the capex boom explores how technology, voters’ needs and monetary factors might converge to form a very powerful trend towards increased investments in real assets or capex in the Western world.  

• Louis replies to Vinod Khosla's thought piece in the Economist, pushing back against Khosla's exaggerated techno-optimism. 

• Georgina’s thought piece on Circular Mobility explores how cars in and around cities cost the environment, society, and the economy. Venture Capital can play a role in minimising them, but it must separate the signal from the noise. 

Second close of Fund II taking us to $100m raised 

We are delighted to announce the second closing of Fund II and to welcome our new investors who bring a wealth of expertise and interest in climate technology.  We anticipate reaching final close in Q2 2023. 

Where we’ve been

Irena talked to Yoann Berno on the Climate Insiders podcast, they covered a range of topics including:  

• Systemiq Capital’s origin, goals and visions  

• What is sensical and non-sensical in the current venture world  

• The importance of hydrogen and how it can be used in the future 

• The role of the Middle East, is it a part of the solution or part of the problem?  

Georgina was on a panel about Climate VC with Balderton and Eka Ventures at Earth Set hosted by Octopus EV. 

In mid-November, Amy and George headed to the monumental technology conference SLUSH in Helsinki. They spent four extremely busy days meeting with people from across the European startup/venture ecosystem, alternatively sweating and freezing in the two habitats Finland had to offer (...sauna, in case the “sweating” was unclear).  

We were all delighted to welcome a few of our new connections, including investor GS Futures and battery design start-up Ionetic, to our Climate Tech Drinks in London a few short days later.  

Amy & George at SLUSH in Helsinki, Finland 

In late November Matt and Amy attended Founders Forum Berlin. Amy was part of a panel about "Wartime Climate Tech Investing", where they discussed the war in Ukraine and the ‘war’ against the climate crisis, amongst other things. Matt led a roundtable discussion titled ‘Climate tech: what will be the impact of energy security on the pace of climate tech adoption?’. They met many amazing founders and investors at this brilliant event. 

Amy on the panel at Founders Forum in Berlin, Germany 

Systemiq Capital were also present at NOAH in Zurich, a 2 day climate technology conference focused on the DACH region in Zurich at the beginning of Dec. At the conference, Oliver Vince, COO of Basecamp Research, and George, held a fireside chat exploring the role of new enzymes discovered in nature providing an additional revenue stream for biodiversity. It turns out the code-base for the enzymes that will underpin the bioeconomy is in biodiversity… 

George on stage at NOAH in Zurich, Swizerland  

Where we will be in Q1 

In the new year, the team will be focusing on the final close of Fund II. Reach out to us if you want to meet up!   

• Jan 12th Irena will be in Milan meeting Italian family offices interested in climate tech 

• Between 23-25 January Matt and Irena will be on the US East Coast and look forward to meeting founders, existing and prospective investors 

• In mid-Feb George will be in San Francisco to connect with portfolio companies, founders and other advisors and friends in our ecosystem 

What we have been reading

Books:  

• Paul Collier’s “The Future of Capitalism” 

• Edward Chancellor’s “The Price of Time” 

• Steven Johnson’s “How We Got to Now: Six Innovations that Made the Modern World” 

• Philip E. Tetlock’s and Dan Gardner’s “Superforecasting: The Art and Science of Prediction”  

• Kim Stanley Robinson’s “The Mars Trilogy” 

Reports & Articles: 

• McKinsey’s and Business of Fashion’s “The State of Fashion 2023” report by Imran Amed, Anita Balchandani, Sarah André and Achim Berg 

• The Century of Biology’s “Atoms are Local” by Elliot Hershberg 

• Frontier’s “Carbon Removal Knowledge Gaps” by Frauke Kracke, Joanna Klitzke and Nan Ransohoff 

• Russell Napier’s “We will see the return of capital investment on a massive scale” 

Podcasts:  

• The Economist podcast – Money Talks: The new Rules of Investment with Wei Li and Mohamed El-Erian  

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Latest News from Systemiq Advisory

• Circularity for Critical Raw Materials - A major shift is underway to a clean energy economy. But this transition depends on raw materials – such as cobalt, nickel and lithium – used in everything from solar panels to electric car batteries… and most of these materials are mined and processed outside Europe. A new report calls on policy makers and industry to implement circular economy strategies at scale to ensure secure and sustainable access to critical raw materials. Factsheets shows the supply chain pressures and opportunities for 8 key imports, while a report, produced with the support of the European Climate Foundation, explores the application of CE approaches in more detail. 

• From its Keeping 1.5 Alive series, the Energy Transitions Commission released its Degree of Urgency report in November. It includes at-a-glance assessments of progress on methane, nature-based solutions, road, power, built environment and energy efficiency  

• A Financial Times report examines whether an industry that has lobbied against green changes in the past can turn around its net contribution to the environment.  

• Philanthropy for Climate Action - Despite the devastating impact of climate change, less than 2% of philanthropic capital is directed towards climate mitigation. This allocation needs to be scaled fast. But, says Systemiq’s founder Jeremy Oppenheim, it also matters where and how philanthropy uses its capital. A report by Systemiq and RMI for IKEA Foundation shows that shifting to alternative and plant-based proteins, supporting the market for electric two- and three-wheeled vehicles and providing targeted financial support for fair and inclusive clean energy access are among the highest-impact opportunities that global philanthropy can seize upon in the fight to reduce greenhouse gas emissions. 

• And finally - Better Travel & Tourism, Better World - Launched at the World Travel & Tourism Council, a new report for centres on the first-ever global, fully-costed strategy for the whole travel and tourism industry. The sector could account for 1/3 of the Earth’s annual carbon budget by 2030 but making it net positive could have important implications for transport, hospitality, food, buildings and energy providers. 

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  Thank You’s  

  A special thank you to everyone who went above and beyond this year with introductions, diligence, advice and help:   

  Alan Millard and Sophie Drummer for guiding us in creating a more cohesive team and in building a healthy organisation; Ajay Chopra, Avidan Ross, Bilal Zuberi, Carey Lai, Dan Scholnick, Gus Tai, James Cham, Kane Hsieh, Matt Margolin, Pedro Noyola, Russ Fradin, Sandeep Bhadra and all our amazing Bay Area friends for your engagement, coaching, and lasting friendship from the other side of the ocean; Ben Dixon, for always keeping us in mind for interesting circular economy startups; Brent Hoberman, Chloe Wates, Jesse Peterkin, and the whole Founders Forum team for the invitation to FF Berlin and opportunities to address the gathered individuals; Federico Apestegui, for introducing BaseCamp Research to the Costa Rican government; Feike Sijbesma, for introducing us to great founders and mentoring our founders; Fiona Mischel, for making superb introductions to founders and advisors across the biomanufacturing space; Kitty Parker Brooks for advising prospective investment opportunities on selling to CPGs; Marc Boughton, for helping us to think about the institutionalization of Systemiq Capital; Michele Tarawneh, for supporting us grow our climate biotech investing ; Pete Goult, for introducing us to exceptional founders in the materials space, and leading the exceptional Planet Positive Chemicals report which is helping us dissect venture scale opportunities in net zero chemicals; Peter Harris for the advice and connections as we build a strong operations backbone for the Fund; Rene Backes, for kindly providing insights into the buying preferences for a large chemical company for biomass based chemicals; Steve Weiss, for ongoing expertise and support in investing into the most exceptional biomanufacturing companies, particularly in the bay area; Walid Haram for the connections and introductions in the Middle East; thanks also to Cornelius Walter, Guillaume de Dorlodot, Jeremy Brewer and Stephen Brenninkmeijer.  

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This summer has brought extreme climate events and catastrophes: Copernicus reported August was the hottest month on record in Europe, Pakistan suffered from record-breaking monsoons that flooded one third of the country and the Shanghai Xuijiahui Observatory reported the highest temperature in the region since 1873, when record-keeping began. But this summer also marks a pivotal season in the fight against climate change. The US Senate passed the Inflation Reduction Act (IRA), the single largest climate investment ever passed by an American government, and a game changer for climate tech. California passed a law that bans the sale of ICE cars by 2035. The UK government awarded renewable energy suppliers contracts to build 11 gigawatts (GW) of electricity capacity, enough to power 12 million homes. And just two weeks ago, Patagonia founder Yvon Chouinard, transferred ownership of the company (valued at $3 billion) to a trust dedicated to fight climate change.   

The worsening climate emergency is coinciding with a broader geopolitical and monetary polycrisis, generating a major bear market. Rising interest rates make growth companies particularly difficult to value, resulting in a “deep tech winter” that we expect to get worse over the winter as fighting inflation takes precedence over recession fears. Yet this downturn is completely different from the long winter in clean tech between 2010-15. We now have a diversified early-stage climate industry covering all aspects of the transition and strong tailwinds from policy, corporates and society (despite a noticeable change of winds from the likes of Blackrock and GFANZ). Early-stage climate tech continues to attract some of the best minds on the planet, with a new industry emerging to help talent move from traditional tech (and other) industries into climate (check out terra.do, workforclimate, climatebase). According to CTVC, climate tech VCs are sitting on $5-8bn of dry power while growth equity funds hold $10+bn. Capital continues flowing into new deals, but investors are holding back, decreasing valuations in a flight to quality. Hot areas in 2021, including carbon accounting, battery storage, cultivated food, and CDR, are deflating – with new areas emerging such as biodiversity, regenerative agriculture, methane and “nature plus CDR”. The complexity of climate tech is increasing as tech penetrates so far sleepier supply chains like waste, fashion, and shipping. We believe that system change investing is becoming ever more important to generate meaningful impact and great returns in a world of worsening climate conditions, increased complexity in potential solutions and multiple decarbonisation routes that are poorly understood by the majority of investors venturing into climate tech.   

Thus, despite the challenges, we are very excited about this space and the journey ahead, and are thrilled to have you in our community. This is the first newsletter of a quarterly series. The purpose of the newsletter is to offer fund updates, provide interesting reading material and to highlight the amazing work being done in our ecosystem by Systemiq Ltd., our portfolio companies, and others.  

We closed the first round of Fund II!

We have closed the $70 million first round of Fund II! Fund II is led by climate powerhouses Paul Polman, Jeremy Oppenheim, Systemiq Ltd. and Irena Spazzapan. The global economy will need a monumental transition to become a sustainable, carbon-neutral system and prevent the catastrophic impacts of climate change. Through its four verticals, sustainable food and materials, clean transport, climate intelligence and finance and climate restoration, Systemiq Capital’s Fund II will invest into the companies creating the new products, systems and tools that will enable this transition. 

Our impact report just came out

This summer we published our first impact report! Since founding, our portfolio startups have achieved impressive climate mitigation milestones:  

1. CoolPlanet saved 2.6m tons of CO2 

2. BEDEO drove 50m kilometers on electric powertrains 

3. Basecamp Research created the world’s largest database of proteins derived from nature 

4. Charm Industrial delivered 90% of engineered carbon removals globally

5. ZeroAvia held 35 test flights on hydrogen-electric aircrafts 

To read more about Systemiq Capital’s commitment to climate and biodiversity and the change driven by our portfolio companies, access the report here. 

We led the Series A round of Basecamp Research, a novel protein platform 

This summer we closed our first Fund II investment in Basecamp Research led by investment team members George Darrah, Irena Spazzapan and Amy Varney. Basecamp Research discovers novel proteins in biodiverse ecosystems, commercialises them with industry partners and routes a percentage of sales back to ecosystem guardians. We have been impressed by the founders and their fast progress towards their technical milestones since we invested a small cheque from Fund I into their seed round.  

At Series A, the Basecamp Research team has already signed 20+ country supply partnerships and created a DNA database that exceeds the size of Zymergen’s, a publicly traded synthetic biology company often considered at the cutting edge of genetic engineering. We look forward to working alongside the team to help them become a premier source of novel proteins for uses across industrial and agricultural sectors.  

We invested alongside Collaborative Fund in Hoxton Farms, a startup providing alternative protein fat 

We all know what a steak looks like, but have you ever wondered how plant-based meat producers will replace meat’s taste and texture? Late this summer, Irena, George, and Amy also closed a Series A investment into Hoxton Farms, a biotech company providing alternative protein companies with their hero ingredient, fat. Hoxton Farms cultivate fat cells in small, controlled environments to prevent and manage errors effectively. The team is chasing the alternative protein space, predicted to grow to $75bn-$392Bn in 2030, and eventually enter the dairy, confectionary, and bakery spaces. 

George explored the state of play in biodiversity

Last July, George kicked off our blog series with a thought piece titled We need to bring biodiversity to the Bloomberg Terminal. In it, George deep-dives into how technological advances are creating opportunities for biodiversity investment and tracking, the challenges the industry faces and how cross-industry collaborations can halt and reverse the 6th extinction. 

His latest blog, The bioeconomy’s code base is in biodiversity, explains how recent technological breakthroughs, including long-read DNA sequencing, are allowing scientists to access the wealth of naturally occurring enzymes on Earth. This creates an exceptional opportunity for planetary and human health that will require the right coordination and governance structures in place to align incentives for all stakeholders. 

Where we’ve been 

• Irena talked to Henry Hamilton on the Venturing in Climate podcast, they covered a range of topics including: 

  • Fundraising and investing in the current environment 

  • Building a VC firm and adding value

  • What to be aware of when investing in hardware

  • Over and under-invested parts of climate tech 

  • Cement and carbon capture and storage 

• George joined the best minds on biodiversity including investors and entrepreneurs from Just Climate, The Landbanking Group, Speedinvest and Pivotal Future on The Drop to explore four key questions: 

  • Can markets help deliver the relationship we want with nature? 

  • How will measurement, reporting and verification bring credibility? 

  • How do we ensure just outcomes? 

  • What collaboration will accelerate solutions? 

What we have been reading

• Louis recommends FutureCrunch’s “Collapse, Renewal and the Rope of History” by Angus Hervey  

• Amy is reading the Guardian’s “Eco beauty company ‘appoints nature’ to its board ot directors” 

• Georgina recommends Ray Dalio’s new book “Principles for Dealing with a Changing World Order: Why Nations Succeed or Fail” and an associated podcast from Gideon Rachman (FT) interviewing him 

• George recommends “Tales of a Shaman’s Apprentice” by Mark J. Plotkin 

• Jessica is listening to 20VC podcast with Harry Stebbings. Last year's interview with Lower Carbon Capital's Chris Sacca is a good starting point 

• Irena has discovered Vaclav Smil’s books this summer and recommends “How the world really works” for some no non-sense numbers and facts 

Team Spotlight: Georgina Fleming, Principal at Systemiq Capital 

Georgina has been on the investment team since day 1, where she brings differentiated international experience as an investor and operator. She led or co-led many of the Fund I’s investments, including Circulor, OpenInvest (exited), The Routing Company, and Jupiter Intelligence. Before joining the VC world, Georgina was an investment manager at a leading family office in SE Asia and also worked at a London-based credit fund financing physical commodity trading. She gained operating experience as the founder of an agribusiness firm and set up the Rwanda Water Resource Board reporting to the Prime Minister’s Office. Georgina’s dedication to climate & sustainable supply chains stems from her work in developing markets where she saw the devastating effects of climate change and the ecological damage caused by take-make-dispose models. In her spare time, Georgina promotes tech education in southern Africa.  

Georgina’s areas of expertise include clean mobility, circular materials and climate intelligence solutions. If you are focusing on any of these topics, please do get in touch! 

In the run-up to COP27, Systemiq Ltd.’s team has published reports on the path forward for chemicals, fertilizers, spatial intelligence data, and more 

• Chemicals. Systemiq’s new Planet Positive Chemicals report developed with the Center for Global Commons at the University of Tokyo shows a stark choice for the chemical industry. It can become an enabler of a sustainable global economy and create 29 million new jobs, or it can align with 4 degrees of global warming by 2050, with catastrophic consequences for the planet. Access additional media coverage in The Guardian, ESG Investor, and Business Green.     

• Fertilizers. Greenhouse gas emissions from mineral nitrogen fertilizer use can be reduced by around 70% by 2050, according to a report Systemiq Ltd. released in September with the International Fertilizer Association (IFA).  

• Spatial Intelligence Data. Driven by Systemiq Ltd. Partner Guido Schmidt-Traub, the SPACES Coalition has teamed up with WEF to produce “Location Matters: Using Spatial Intelligence for Business Action on Nature and Climate”, a report on how and why leaders can incorporate insights from spatial data into strategy and operations. 

• Natural Resources. A new publication by Janez Potocnik and Izabella Teixeira of the International Resource Panel (IRP) addresses the missing piece of the world’s efforts on climate change: the strategies to reduce and improve our use of Earth’s natural resources. 

• Tipping Points. Systemiq’s The Paris Effect and research by the Food and Land Use Coalition were featured in the Global Tipping Points conference. Systemiq will soon release the third ‘Paris Effect’ report for COP27, building on the findings that, by 2030, low-carbon solutions could reach mass market in sectors representing 90% of emissions. 

Our portfolio companies are also making headlines 

• American Airlines invested in ZeroAvia and provided an MoU that gives AA the opportunity to order up to 100 engines from ZeroAvia’s hydrogen-electric powertrain development program. Also watch a ZeroAvia plane taxi on hydrogen! 

• Circulor is working with a German consortium to develop a battery passport to track critical minerals to help new EVs qualify for the IRA tax credit. 

• Charm Industrial released a public protocol for bio-oil sequestration authored by Carbon Direct and EcoEngineers, and public life cycle analyses for every carbon delivery, bringing much-needed transparency and credibility to carbon certificates.  

• BioMADE, the Department of Defense-sponsored Bioindustrial Manufacturing Innovation Institute, will develop and collaborate with Microbyre and Advanced Biofuels and Bioproducts Process Development Unit (ABPDU) to deliver TeselaGen Inks Contract. 

• NatureMetrics, in collaboration with Dendra Systems, reached the semifinals of the XPRIZE Biodiversity during the Biodiversity Forum in Davos. 

• Facilitated by a Systemiq Capital introduction, Jupiter Intelligence and Aon announced a collaboration to assist financial institutions in calculating the potential impact of climate change on their balance sheets. 

Towards the second closing… 

The team kick-started fundraising in the past couple of weeks and plan for a second closing by end of year. We are having great conversations with new investors, and long-term friends of the Systemiq family. We look forward to executing this next milestone whilst we continue generating a fantastic pipeline of companies and close another 2-3 deals in the coming months.  

Upcoming dates 

In the next few months, the team will be on-the-go. Reach out to us if you want to meet up at any of these events!  

• Sept 29th – 30th Irena will be in Turin for Italian Tech Week   

• Oct 5th – 6th Georgina will attend the Sifted Summit in London  

• Oct 13th George will head to the Natural Capital Summit in London   

• Oct 13th – 14th Georgina will be at the GreenTech Festival in London  

• Oct. 19th Jessica will be at BVCA's Emerging Manager Summit in London  

• Nov 1st – 4th Louis will fly out to Lisbon for Web Summit  

• Nov 16th – 18th George and Amy will be in Helsinki for Slush  

• Dec 6th – 7th George will attend NOAH in Zurich 

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