Investing in deep-tech companies solving global needs.
A new wave of entrepreneurs is on the rise. Focused on building highly successful businesses that solve the world’s biggest problems, they use advances in artificial intelligence, robotics, synthetic biology, genetics, and other deep technologies to solve problems such as tackling climate change, feeding the world’s growing population sustainably, coping with an ageing population, dealing with our mental health epidemic or eliminating plastic pollution.
While venture capital seems to be slowly recognizing these new opportunities, our observation is that capital remains incorrectly distributed across the spectrum of opportunity, particularly in the European early stage ecosystem. This leaves a long tail of opportunities for independent investors who are willing to back those visionary entrepreneurs.
As investors with backgrounds ranging from venture capital/private equity to entrepreneurship, we experienced this need first. We created Future Positive to fill this gap and invest in companies that use advanced technologies — novel technologies that offer significant advances over those currently in use — to solve massive global needs at the seed and series A stage across Europe. We see those companies as the greatest value-creation opportunities over the next decades, and we’re focused on accelerating their development.
What is a Future Positive company?
Here are examples of a few companies we have invested in — either as Future Positive or in our past lives — that illustrate what we are talking about:
Biobeats is an Oxford-based artificial intelligence company pioneering preventative mental health care. The company’s mission is to empower anyone to take control over their well being. They have built the world’s first unified computational model for psychological, physiological and neurological care to get there. Alexandre Terrien wrote a blog post to expand on our investment rationale, and you will find a short video interview with he did with founder David Plans here.
Meatable is developing next-generation lab-grown meat from Cambridge University and Leiden in the Netherlands. Their technology is based on 15+ years of R&D and stem cell researcher and makes it possible to grow pluripotent bovine stem cells (more info here). The company is on its way to making lab-grown meat a viable, mass-market alternative to traditional agriculture.
Ynsect is the leading global manufacturer of insect protein at scale for the animal feed markets and one of my initial investments and inspirations for creating Future Positive in 2016. Over the last five years, this Paris-based company has made more than 20 proprietary scientific and technological breakthroughs to build the world’s largest insect farming capability and replace fish and soy protein in the animal feed and fishmeal industries with a zero-waste, high quality and cost-constant product. The company just announced a $125m Series C.
In addition to these investments, we are starting to see all around us other examples of successful European companies that are growing fast and advancing society, such as:
What are the characteristics of Future Positive companies?
Investing in these types of opportunities requires shifting the ways in which we look at potential investments towards a more specific and holistic view of how value is created today. Instead of thinking of “value” exclusively as “market value”, we believe value is created when a combination of factors come into play and mutually reinforce each other:
We believe this represents a new vision for value creation in venture capital that is global, sustainable, and powered by scientific and technological innovation. Let’s dive into each of those.
1. Business value: “what the world needs” is a much bigger opportunity than “what I want”
We invest in startups that can become category-defining companies, with a bias for businesses that create new markets and/or address large but traditionally dismissed demographics.
Over the last couple of years, a number of studies have estimated the size of the top global market opportunities that tackle global challenges. Market sizes for these are in high billion to trillion dollar values. At Future Positive, we focus on themes within those market opportunities such as the application of genomics to agriculture, new materials, assistive technologies, sustainable consumption, new healthcare solutions, the future of housing, circular manufacturing, and “industry 4.0”.
On top of these themes, we get excited by how the world’s population is evolving and what this means for businesses to succeed. While many VC-backed companies have a near single-minded focus on the “top of the pyramid” — mainly stated, urban consumers with established purchasing power — we are particularly curious about companies that target traditionally under-considered demographic groups. We think about the fact that one billion people will be over 65 years old by 2030, three billion people will be coming online in the next few years (primarily from emerging markets), the global middle class will triple over just a couple of decades (OECD). These are demographic changes of gargantuan proportions that will reshape demand — what products and services will they need?
Demographics are further determined by collections individuals who align consumption with their culture, values and beliefs (religious, ethnic, gender, ethical, political). Companies focused on these frequently face less competition and are well positioned to become successful — with examples like the above mentioned Orcam (visually-impaired people) or Mayven (primarily focused on African Americans and black Europeans).
2. Scientific value: proprietary advanced technologies
We invest in companies that develop proprietary scientific and technological assets to serve global needs.
Solving complex global market challenges requires radical innovations.
After two decades of expansion in mobile and web technologies, we are now at the start of a new trend of deeper technologies that will impact all industries, and create immense value.
We seek companies that leverage these technologies to build solutions that are market-ready.
As technology continues to assert its position as the main driver of growth in today’s economy, companies with strong technological and scientific foundations and cultures are able to quickly capture an ever-increasing part of the value chain in their respective industries.
Accordingly, the companies we invest in are typically built upon years of research, often undertaken in university laboratories by scientists and technologists who operate at the cutting edges of their respective fields. They might have received non-dilutive grant funding as a demonstration of their edge. We would expect to invest after an initial proof of product market fit and with a view to helping the company to scale.
3. Societal value: capitalism 2.0
We invest in companies whose existence is inextricably connected with improving the human and planetary condition. The problems they seek to solve are global, complex and urgent.
Companies that provide solutions to large global needs should benefit from unrivaled growth potential.
We do not buy the rhetoric that “every company is impactful/progress driven”, as we have heard so often. It goes without saying that every company has a “use case”, but Future Positive companies are built with an intention to solve the world’s toughest challenges.
We therefore seek companies where the positive impact is obvious and intrinsic to their business — where there is a total interdependence between the product, the business model and the positive impact.
This call for purpose makes increasing sense for businesses given some of the major factors of change and shifts that are defining our economic environment:
- A radical shift in the talent mindset and composition. 88% of 20–38 year olds want to work for companies with values that reflect their own (PwC), and they will represent 75% of the global workforce in 5 years (Catalyst.org). It is clear that companies solving real problems will attract the world’s best talent and maintain high employee satisfaction.
- A shift in consumer expectations towards values-aligned brands. 91% of consumers are likely to switch brands to one that supports a sustainable cause (Cone). This trend is particularly strong in the 20–38 year old segment, already the largest and most valuable consumer segment with $1.3 trillion of annual spending (BCG). This means loyal customer bases, with passionate customers that freely advocate and defend those brands.
- A shift in government regulation favoring those companies. Governments increasingly focus on key issues like climate change or privacy as well as solving the UN Global Goals, particularly in Europe. To support those lofty objectives, governments have implemented hefty resourcing programs in the form of non dilutive financing for R&D, all of which our target companies benefit directly from. Concrete example include: the EU Council and Parliament striking a deal on Horizon research programme, governments and international institutions have unlocked $400B from 2015 to 2018 to solving the UN SDGs, or China to reduce its meat consumption by 50%.
At Future Positive, we invest with those shifts in mind. We recognize that longevity goes hand in hand with long-term visions that address the interests and challenges of future generations, and which make a company’s focus on sustainability and ethics a critical component of its business success.
4. Human value: leader with an “anticipative” vision of the future
We invest in the exceptional founders — bold and long term thinkers, ambitious inventors and focused executors.
None of this is possible without teams, and particularly entrepreneurs, who can deliver on their ambitious plans. Building companies is exceptionally hard. The character, vision and ambition of a founder is in many cases the single limiting or determining factor for the success of a startup. Accordingly, we place a very high bar on founder selection.
To start with, founders we seek to back have a level of commitment to achieving their mission that is inspiring. This commitment often stems from a full alignment and consistency between who they are, their life story and what they are doing.
This commitment is best demonstrated in their resilience. These are founders for whom there is no other option. No Plan B.
This is also where Societal Value and Human Value intersect. The sharpest minds and most ambitious leaders gravitate naturally towards real and hard problems. Their commitment to solving real problems, combined with their long-term and anticipated vision of their industry, attracts other sharp and ambitious engineers and operators who want to solve real problems. A virtuous cycle that increases the probability that the company will go from a $50 million business to a $10 billion market leader.
And finally, we seek founders who invest in experienced executors and build empowering cultures that carry their teams towards their visions. It is not easy to do in fast growing / fast changing environment, which is why our Future Positive Platform has as a key focus on leadership development and management coaching (as well at talent-hiring).
The founding entrepreneurs of venture capital created their firms with bold missions to invest in transformative companies with contrarian positions, backing entrepreneurs who imagined a wildly different future. While a lot of this ambition lives on in mission statements and institutional narratives, in practice the industry is getting further from its original, iconoclastic DNA.
Capturing today’s opportunities requires going back to this initial mission, but with an updated definition of value that reflects the changes that are restructuring our economy and societies: the acceleration of scientific and technological progress, the focus on sustainability and responsibility, the quest for purpose, and massive demographic shifts that are changing the shape of tomorrow’s populations.
We will continue to fuel this ‘Future Positive’ by mobilizing progressive capital, purposeful entrepreneurs, pioneering technologies and powerful communities. Our thesis to achieve this is, in the end, remarkably simple: we invest in companies that used advanced technologies to solve massive global problems.
This is, in our view, the future of venture capital.
Thank you for reading (this is our short version! ^).