Identity Crisis: VC’s Reawakening

EQT Ventures
Published in
6 min readJan 20, 2022


EQT Ventures 2022 Predictions for Frontier Tech

Writer: Chris Stokel-Walker

2021 was a tumultuous year, with tech leading the way in the thrust-and-parry fight between society and Covid-19. We expect much of the same in 2022 for investors and founders.

The trend around the corner in consumer tech in 2022 appears clear– Apple releasing their augmented reality (AR) headsets, Web3 continuing to inch into our lives, and climate solutions becoming more mainstream — but what about those behind the consumer frontline?

A tussle between geopolitics and society

“This past year was a pivot point on the frontier. We saw an explosion in the development of tech, with founders and investors alike eager to push beyond the pilot phase,” says Gregory Bernstein, investor at EQT Ventures. Yet that growth is coming at a precarious time.

“The test for a lot of these technologies is going to be when the recent tailwinds — which have buoyed the whole sector — hit some real headwinds straight on, ” says Bernstein. And he’s not just talking about the return to higher global interest rates. Bernstein believes that approaches to climate solutions are going to be increasingly predicated on and swayed by geopolitics. “The two aren’t mutually exclusive and this is bound to generate an identity crisis for some. Take fusion, for instance. Its development could be pivotal for decarbonization, but we’re also talking about a nearly inexhaustible energy source. It matters who owns and controls that.”

Rewriting the VC rules

Likewise, the whole world of venture capital is in flux. “VCs are having an identity crisis, because it’s as if the last twenty years, and how tech investing and the tech ecosystem has been built up, is now all of a sudden being challenged,” says Ted Persson, partner at EQT Ventures. The traditional dominance of the United States is being diminished — and investors and founders are instead waking up to the promise of European venture capital and European startups. “Europe, is the dark continent, basically,” says Persson. “It’s an underpriced continent in-between Silicon Valley and China.”

That’s reflected in the number of European IPOs reaching the market. In the first nine months of 2021, 287 European firms raised €55.4 billion, compared to just 64 raising €11.7 billion in the same period in 2020. 2022 looks likely to be a banner year for European investment. “Europe is completely killing it, but only recently has anyone taken notice,” says Persson.

Climate changes the investment model

The same is true in climate tech. Rewind two years ago and VCs stayed well away from the space. The capital intensity was simply too great a risk, and investors remembered the cleantech bubble from 15 years earlier. But a lot has changed in 24 months — and in 2022, we’ll see yet more interest and big bets in the world of climate. “It feels like it’s the first time that we have a global narrative that almost everyone can buy into, since we wanted to put men on the Moon,” says Persson.

“I think that a lot of generalist VCs are getting immensely stressed out right now because they realise that software-led tech is changing drastically,” he adds. “People are realising climate tech seems to be pretty trendy.” That’s likely to lead to an even greater influx of money into the space — but Persson says it’s not necessarily a good thing outright. “I think that there could be a backlash coming up, because there’s so much money going from generalist investors who don’t do the job going into frontier and climate tech, right now,” says Persson.

Returning to the old ways of VC

The renewed interest in climate tech may lead to a lot of chasing the tail of investment, but there are silver linings. While the early months of 2022 may see investors chasing the latest new trend without thinking carefully about things, in the long run it’s likely to shake out into a better future. “We have this move back to what venture capital was,” says Persson: “a way more technology-positive perspective on the world. We’re back at solving the biggest problems using tech — and it doesn’t just have to be the internet.”

Persson welcomes that shift. “VC and tech used to be this dynamic, interactive force,” he says. “Then it became a bit more stagnant.” The urgency of the problems VCs are trying to focus on now may inject a little more dynamism back into the world.

“If I talk to my parents about my job and how I’m an investor in tech, they get a lot of pictures in their heads about flying cars, and drones and robots,” says Persson. “It’s a science-fiction view of the future. But that’s not at all what we’ve been up to: we’ve been investing in games and delivery apps and those types of things. But now in a way, my parents’ view of what we’re doing, and what we’re actually doing is aligning again.” And that’s really exciting..

Ted Persson, partner at EQT Ventures & Gregory Bernstein, investor at EQT Ventures

Patience is needed

A return to mission-driven investment that changes the world is welcome, but patience is necessary, warns Bernstein. “Most of the frontier tech that the world is really hoping for is not ready, or at least not mainstream” he says. “However, that which has emerged, like mRNA or renewed space exploration, has provided an extraordinary glimpse into what this new era could look like.” And yet at the minute many institutional investors are focused on the latest shiny new thing — Web3, NFTs, and meme coins. That causes disillusionment among those who see the bigger issues being overlooked.

Yet that’s likely to change — and soon. “There’s a real sense that the previous cycle has been played out but that the so-promised solutions aren’t coming fast enough. This has created Godot-esque disillusionment for a lot of people. However, we believe that this era of transformation is likely to be an experience of ‘gradually, then suddenly’. ” says Bernstein. “The foundations have been laid for breakthroughs in so many different disciplines. As these technologies mature , I think it will reawaken a hopeful sense of what is possible for many people, similar to when venture capital and this industry got started. That’s why we’re investing now in the teams leading the transformation when it’s not so obvious.”

And bravery, too

To affect the massive changes required in the world, bravery is a precondition.. “I think a lot of VCs will just continue doing what they’ve always done,” says Persson. “And within every VC, there are certain people who will just continue doing what they’ve done.” But stepping outside that comfort zone requires a sense of adventure — and it’s a spirit that EQT is already living with others no doubt likely to follow in 2022. “This is a time to navigate the disruption and establish yourself for what’s to come. ” he says.



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