Music:
Speaker0: Fits.
Speaker1: Hello and welcome everybody. This is Joe from StartupRate.io bringing you another
Speaker1: episode from the German-speaking entrepreneurship scene.
Speaker1: Today I would like to welcome Wolfgang here with me. Hey Wolfgang, how are you doing?
Speaker0: Hi, lovely to be at this podcast.
Speaker1: Totally my pleasure. Before we dive into startups and investment philosophy,
Speaker1: let's zoom out. DACH is becoming one of Europe's strongest engines for green tech innovation.
Speaker1: And High Innoff's Green Tech Mapping 2025 gives us an inside look at what's coming next.
Speaker1: So Wolfgang, let's get into the data, the deals and the future.
Speaker1: Maybe before we do that, could you tell us just a tiny bit about who you are
Speaker1: and what you do and what high enough is before we get into what you really did with green techs there.
Speaker0: Absolutely. So we are a German-French B2B venture fund. We mainly focus on Series A investments.
Speaker0: We are on the market now for more than 10 years, just investing our third generation.
Speaker0: We specialize on deep tech and true B2B technology. So everything which helps
Speaker0: enterprises to become more digital, become more efficient. This is our investment themes.
Speaker0: Basically, we invest in five main area. One, obviously, we are going to talk
Speaker0: about that is screen tech.
Speaker0: We do what we call compliance. So leveraging all the European regulation and
Speaker0: what kind of interesting business models coming out of that.
Speaker0: We traditionally, as a team, we have a deep expertise in everything, which is data, big data.
Speaker0: You know, obviously now with AI, things are moving quite quickly and really shaping the industry.
Speaker0: We do cyber, also a little bit with a defense angle.
Speaker0: And then we do something what we call new work. New work is basically, you know,
Speaker0: technologies who reshape the workspace, like, you know, remote working,
Speaker0: collaborative tools, but also HR developments, because our thesis is that people,
Speaker0: they just, you know, are looking for a sense in work, you know,
Speaker0: probably a little bit different than 20 or 30 or 40 years ago.
Speaker0: And so a lot of companies are also focusing on education and on,
Speaker0: you know, other HR related topics.
Speaker0: So these are our five main investment themes.
Speaker1: I was wondering when I first read the pitch for the content,
Speaker1: I was wondering what inspired you to do the screen tech software mapping?
Speaker1: I assume it was not that you were bored and you didn't have already more than enough work.
Speaker1: How did you get started? What was the trigger to do the screen tech mapping?
Speaker0: Well, actually, this is not the first screen tech mapping we are doing.
Speaker0: We did it two years ago in 2023 as well.
Speaker0: At that time, it wasn't green tech. It was more called DACH Climate Tech Mapping, which kind of evolved.
Speaker0: I think for us, it's very important to understand the industries we would like
Speaker0: to invest and to understand the broader context, to understand the players,
Speaker0: to understand the ecosystem.
Speaker0: And we do that for all of our five investment areas.
Speaker0: So green tech obviously is very important to us. And therefore,
Speaker0: we just would like to have a good view on the market.
Speaker0: And to be very frank, it's also kind of a marketing tool because we really want
Speaker0: to tell the market, hey, we are there.
Speaker0: We are interested in that space
Speaker0: and we think there's a lot of interesting investments to do in this space.
Speaker1: I assume we will link down here in the show notes to the Queen Tech software
Speaker1: mapping, just having it here on the other screen.
Speaker1: One of the big areas is carbon footprint monitoring with energy transition tools,
Speaker1: with circular economy, raw materials optimization and corpo initiatives.
Speaker1: Given that and that it already had a different name in the past,
Speaker1: can you tell us from your perspective what were the three most surprising findings
Speaker1: you had in 2025 versus 2023?
Speaker0: Well, I think, and, you know, I really looked it up in 23 and looked at what really has changed.
Speaker0: You know, obviously, is this a surprise? Probably it's not a surprise.
Speaker0: The map got richer. You know, many more logos on the map.
Speaker0: The ecosystem is really evolving quite a bit.
Speaker0: But what's also interesting, you know, there's a reason why we did green tech software mapping.
Speaker0: And at the time, we call it climate tech mapping.
Speaker0: I think it also becomes clearer and clearer what are really the trends and the
Speaker0: investment topics software investors could be interested in.
Speaker0: When I basically, you know, two years ago, we had nine sectors and they were
Speaker0: called recycling, reporting, deep tech, digital twin battery.
Speaker0: So it basically was more like a mapping around specific solutions,
Speaker0: specific technologies.
Speaker0: But I think now, you know, the more the ecosystem evolving, it is clear that
Speaker0: it's not so much about specific technologies.
Speaker0: It's more about there is different areas, people trying to find solutions,
Speaker0: you know, whether it's with technology, whether it's with, you know, other business models.
Speaker0: And so I think the surprising or kind of the new methodology is more looking
Speaker0: at from a user perspective rather from a technology perspective because we see
Speaker0: real usage of these technologies.
Speaker1: Talked about the real usage. We already talked about the different categories here.
Speaker1: Which of those categories do you believe is gaining the fastest traction in the DACH area?
Speaker0: Actually, that's kind of a tricky question because I think, and we even have
Speaker0: real-life examples, and maybe
Speaker0: later on a few examples, I can elaborate on these real-life examples.
Speaker0: I think it all is kind of interwoven and kind of linked together,
Speaker0: talking about carbon measurement.
Speaker0: You would think it's very easy and very, very trivial to measure carbon,
Speaker0: the carbon footprint. It's not.
Speaker0: You know, just ask AWS and ask, you know, what's basically the carbon footprint
Speaker0: of your data center. They don't know. They simply don't know.
Speaker0: So, and when you don't have kind of the tools to measure impact,
Speaker0: How, you know, can you achieve corporate sustainability?
Speaker0: How can you really kind of achieve energy transition and circular economy?
Speaker0: So I think what's happening right now is, you know, there's an underlying layer
Speaker0: of measurements of technologies developed, you know, then obviously.
Speaker0: And then on top of that, you know, once they really understand the problem,
Speaker0: new technologies emerge to solve these problems.
Speaker0: So I wouldn't really make a bet, you know, what of these four areas are growing the fastest.
Speaker0: Put it like this.
Speaker0: When you look at market volume, you know, obviously energy transition is a huge
Speaker0: market. You know, it's a multi-billion euro market and it's huge investment model.
Speaker0: When it comes about carbon measurement, you know, these are kind of software,
Speaker0: you know, which are used.
Speaker0: But so when you look at, I wouldn't call that as big as a market as carbon as energy transition.
Speaker0: So I think when it comes to volume, you know, obviously there's a difference.
Speaker0: But what's going to be most active and picking up? Hard to say.
Speaker1: Mm-hmm, I see.
Speaker1: I was wondering for our audience, if you're building green tech startup in the
Speaker1: DACH region or want to invest in one, drop your thoughts in the comment.
Speaker1: What trends do you believe will dominate by 2026?
Speaker1: Going a little bit into trends and technologies.
Speaker1: What role is generative AI already play in green tech software and how do you see it evolving?
Speaker0: I think that's a broader question because AI is just changing the way how to
Speaker0: develop, how to propose software,
Speaker0: how to structure software and how to go to market. That's the general trend.
Speaker0: There's an entire layer of engineers, of software engineers and programmers
Speaker0: which aren't used, you know, aren't necessary anymore.
Speaker0: With AI, you can create wow effects to customers, even to investors.
Speaker0: And when you really go under the cover, you understand, well,
Speaker0: you know, it's basically a very smart application of an AI technology,
Speaker0: you know, of an AI model in order to come up with answers,
Speaker0: which are probably very nice to have, but probably not very kind of sustainable
Speaker0: when it comes to a clear differentiator.
Speaker0: So I think the market, especially when it comes to software investment,
Speaker0: is changing dramatically right now.
Speaker0: And obviously, that impacts screen tech software because, you know,
Speaker0: it's so much easier on the one side to visualize.
Speaker0: To get answers, to gather data, to really try to make sense out of what you're
Speaker0: gathering, what you're trying to achieve.
Speaker0: But on the other side, it's also a little bit tricky because you really have to think very hard,
Speaker0: you know, what is really the value add you're offering to customers, you know,
Speaker0: to the landscape, which goes beyond AI, because AI at the end of the day,
Speaker0: I think it's more a tool. It's not a solution per se.
Speaker0: So I think it's getting a little bit more complex when you think,
Speaker0: you know, what's really the value proposition you want to invest.
Speaker0: And that's true for green tech, you know, as well as for a lot of other kind of sectors.
Speaker1: I have been observing this space for quite some time.
Speaker1: And for example, what was one of the things that happened in the past was,
Speaker1: for example, a cloud took over.
Speaker1: And at one moment, everybody was a cloud first startup. I do believe that's
Speaker1: now so essential. Nobody talks about that anymore.
Speaker1: All startups are more or less cloud based. Do you think it will be the same
Speaker1: way with AI that almost every startup in one way or another,
Speaker1: especially software, will include AI?
Speaker0: Absolutely. I think it's always like, obviously, now when you have a pitch,
Speaker0: when you get business plans, the headline is always AI.
Speaker0: It seems like, you know, nobody even dares to ask for money or really build
Speaker0: a business model if AI isn't in the headline.
Speaker0: But at the end of the day, it's a technology. It's basically a technology which
Speaker0: makes a lot of things easier, faster, which basically creates new opportunity.
Speaker0: But at the end of the day, it's a tool and it will become a standard.
Speaker0: It will become a standard, you know, in developing software.
Speaker0: It will be a standard when you request information, when you create a user interface,
Speaker0: a look and feel interface.
Speaker0: And I'm pretty sure that in two or three years, um,
Speaker0: The pitches won't have AI in the headline, but it will be deeply interwoven
Speaker0: into any solutions startups offer.
Speaker1: Talking about solutions here,
Speaker1: you're also tracking startups using vertical software tools like DeepKey
Speaker1: to meet ESG and CSRD requirements more effectively than horizontal platforms.
Speaker0: Well, I think that's just, you know, how it is.
Speaker0: I think if you really want to be successful, you have to be an expert in the
Speaker0: domain you're doing, especially when it comes to data plays.
Speaker0: And by the way, that's also the big opportunity startups have,
Speaker0: you know, compared to all these horizontal players, the big Silicon Valley giants
Speaker0: and the guys who develop the LLMs.
Speaker0: Really having a specific industry expertise and really understanding the data
Speaker0: sets and data requirements of that specific industry.
Speaker0: In the case of Deepkey, that's really an investment we are very proud of because,
Speaker0: you know, we don't call it startup anymore. It's a real scale-up.
Speaker0: They are now the European-wide leader when it comes to measuring the carbon
Speaker0: footprint in the building industry or the management of buildings.
Speaker0: And that requires not only the ability to know how to measure a carbon footprint, how to display,
Speaker0: how to organize it, but it also requires an in-depth knowledge of the industry.
Speaker0: And typically, horizontal platforms simply don't do that.
Speaker0: Because that's not what they are built for. They are general purpose platforms.
Speaker0: And people probably would use it as a tool to build their own solution.
Speaker0: But they really don't address a very, very specific industry.
Speaker0: Actually, I've rarely seen that.
Speaker0: So, you know, there is a premium for industry knowledge, sector knowledge.
Speaker0: And you can build true market leaders when you have that knowledge.
Speaker1: So your mapping is not only a graphics, it's also a document.
Speaker1: And when I went through it, you mentioned 216,000 tons of CO2 savings impact.
Speaker1: How did you calculate that? And what does it signal about the market maturity?
Speaker0: Well, I have to say, when I read that, I was asking the question to myself.
Speaker0: And then I really ask also my team, it's what DeepKey basically has on its website.
Speaker0: So they track it very closely.
Speaker0: They are together with another company. We have an output for a platform as
Speaker0: H, one of our B Corp companies.
Speaker0: And they are a first mover, obviously, because it's a solution to really track
Speaker0: and to really kind of find a way how to measure carbon reductions.
Speaker0: They have created a tool around that. And now, obviously, they publicly communicate
Speaker0: about it. I think it's quite massive.
Speaker0: And I think it's also a trusted number.
Speaker0: You know, often, as said, you know, ask AWS what's their carbon footprint,
Speaker0: you know, how much a gigabyte of data request really admits in carbon and CO2.
Speaker0: It's pretty hard and pretty tough for them to say.
Speaker0: At least at Deepkey, that was a focus early on.
Speaker1: Mm-hmm.
Speaker1: Let's talk a little bit about the DACH-specific context.
Speaker1: Usually when you look into something like that, you see strengths and weaknesses
Speaker1: in the DACH startup ecosystem.
Speaker1: Where do you see that, especially when it comes to scaling innovations?
Speaker0: I think what's specific, and obviously I can compare a little bit because we
Speaker0: are equally investing in Germany and in France.
Speaker0: I think in Germany, there's kind of this first mover mindset.
Speaker0: And people, you know, embrace, have always embraced that very early on.
Speaker0: For example, when I compared the DAG mapping in 2023 to the French mapping,
Speaker0: I think I see a little bit more logos on the DAG side, you know,
Speaker0: just, you know, a pure number game.
Speaker0: So I think it's this mindset and really, you know, wanting to change something
Speaker0: and really building technology solutions around that.
Speaker0: So that's a very positive thing. You know, obviously, it's all across Europe.
Speaker0: But somehow I have a feeling there's a special touch, you know,
Speaker0: to the Dach market when it comes to this thing.
Speaker0: In terms of scaling climate innovation, and I think we are also going to talk
Speaker0: about that a little bit further down the road.
Speaker0: At the end of the day, it's great to reduce carbon footprint.
Speaker0: It's great to create a circular economy.
Speaker0: It's great, you know, that corporates get, you know, more responsible and take
Speaker0: care, you know, a few things probably they haven't done like 50 years ago.
Speaker0: But at the end of the day, it really is after all its business,
Speaker0: right? It's how to make money.
Speaker0: And I think that's the biggest challenge, you know, and probably even in Germany,
Speaker0: like people tend to think about the solution per se.
Speaker0: Rather than is it really something which is sustainable but not sustainable
Speaker0: in terms of ecology but economy because at the end of the day,
Speaker0: you know, all the solutions have to make money, have to create a return.
Speaker0: Otherwise, it's not sustainable. It's simply a lie to think that you can do
Speaker0: stuff, you know, just for doing stuff.
Speaker0: It needs to be economically viable, and I think that's the biggest challenge.
Speaker1: We talked about challenges here, there's always regulation.
Speaker1: Do you see the regulation currently as an opportunity or as a burden to Greentech founders?
Speaker0: I think that's neutral. That really is neutral.
Speaker0: I think regulation is grossly overrated when it comes to these things.
Speaker0: Obviously, it can initiate thinking.
Speaker0: Maybe there can be a little bit of a wave and create opportunities.
Speaker0: But at the end of the day, I'm a deep believer that people should act freely
Speaker0: and any regulation is an overlay.
Speaker0: And when the overlay really, you know, just creates additional cost and complexity,
Speaker0: that's probably not a good thing.
Speaker0: So I would say it's neutral.
Speaker0: For certain companies, that probably creates opportunities.
Speaker0: But at the end of the day, well, we all know it.
Speaker0: We do have a bureaucracy problem, and that doesn't stop in green tech.
Speaker1: Yes, nicely said. We need the specific mapping.
Speaker1: I was wondering, within the DACH region, when I was thinking this through,
Speaker1: I didn't have a specific hub in mind, something like Berlin, Munich or Zurich.
Speaker1: Do you see any of them or another one seen emerging as a green tech leader in software innovation?
Speaker0: No, no. I think that's a nice thing about Germany. I'm investing in Germany now for 20 years.
Speaker0: Good startups are all over the place. Obviously, there are clusters.
Speaker0: There's a Munich cluster. There's a Berlin cluster. There's a Zurich cluster.
Speaker0: Maybe there's kind of a Cologne cluster as well.
Speaker0: But you can find great companies, even like in small places.
Speaker0: It's pretty, it's pretty, what I put it like this,
Speaker0: having a little bit also in Switzerland at a few conferences where they present
Speaker0: solutions, it seems like Swiss people, they really do a lot when it comes to
Speaker0: hardware related solutions.
Speaker0: Munich is an engineering spot. We all know it, you know, has a great infrastructure,
Speaker0: and a big kind of non-software place are played out in Munich as well.
Speaker0: Berlin, it's clearly software centric. But is there a specific hub?
Speaker0: You know, really never happened.
Speaker0: You know, also when I look at my personal, you know, local investment,
Speaker0: it's completely random. Great teams are all over the place, which,
Speaker0: by the way, is the beauty about the DACH region.
Speaker0: Ask the French. Ask the French.
Speaker0: It's pretty clear.
Speaker1: A lot concentrated in Paris. We'll be back after a short ad break with investment
Speaker1: strategies and portfolio insights.
Speaker1: Hey guys, welcome back to my interview with Wolfgang from High Enough on the
Speaker1: Greentech DACH software mapping.
Speaker1: We get exclusive insights from him and we're now talking about investment strategy
Speaker1: and portfolio insights.
Speaker1: Wolfgang, how does the Greentech mapping inform your deal flow and investment
Speaker1: priorities at High Enough?
Speaker0: Well, that's also a very generic question, which probably isn't 100% on green
Speaker0: tape mapping, but it's basically, it shapes your way of thinking.
Speaker0: It's always different to discuss or kind of to think you've understood something
Speaker0: and to really bring it on paper.
Speaker0: This is by the way, also why like when we do investments, people,
Speaker0: you know, submit investment proposals in written form, like really plain English,
Speaker0: you know, not kind of paste and copy of some PowerPoint slides,
Speaker0: because the very moment you really have to bring down something written,
Speaker0: you have to think, you know, and by the way, best example is that green tech mapping,
Speaker0: which was called climate tech mapping two years ago.
Speaker0: Now, really, we had to think, you know, how the market is evolving,
Speaker0: are there new categories? Do we have new classifications?
Speaker0: So so that it really is it's an exercise which kind of disciplines you and really makes you look,
Speaker0: you know, very carefully in what you're really looking for, what are really
Speaker0: kind of the major trends and what what really makes a difference and of what
Speaker0: possibly could do a difference.
Speaker0: You know, and then obviously it's a great tool because then you have a very
Speaker0: concentrated period in really getting it right, you know, not forgetting everything.
Speaker0: Pieces, you know, trying to have a full coverage, you know, probably,
Speaker0: you know, obviously, you know, on our mapping,
Speaker0: there isn't any, you know, 100% of possible greentech companies in the DACH
Speaker0: region, but at least, you know, it kind of disciplines you what's really important,
Speaker0: what could be potential winners or what are kind of people,
Speaker0: our companies who are really setting trends.
Speaker0: So I think it's very useful, especially when you work in a team and when you
Speaker0: want to start a conversation.
Speaker0: And then when you want to basically discuss business plans and really also,
Speaker0: you know, what kind of direction you should look at.
Speaker0: Yeah, we really like it. And as said, to be very frank, I pointed that out at
Speaker0: the beginning of that podcast.
Speaker0: It's also, you know, making us known a little bit more in the market.
Speaker0: And, you know, just a little bit, a little explanation mark,
Speaker0: hey, we are there and we are interested in this space.
Speaker1: I see. Talk about investments. Can you walk us through the decision to invest
Speaker1: in Trace for Good and how it aligns with your thesis?
Speaker0: That comes a little bit back to what we were discussing previously.
Speaker0: You know, what do you think about horizontal solutions versus verticalized solutions?
Speaker0: We deeply believe that, you know, when you want to do a startup,
Speaker0: Going horizontal is tricky. You know, you don't have the means,
Speaker0: you know, obviously, and then you're competing against the big guys.
Speaker0: So you really have to choose your vertical. But we also believe there will be
Speaker0: always a leader in a specific vertical.
Speaker0: And, you know, we've seen that with Deepkey, we've seen that,
Speaker0: you know, with a few others of our investments, where basically really companies
Speaker0: have chosen a vertical, became very good in it, and then become the market leader.
Speaker0: And in the case of Trace for Good, obviously, you know, just to give a very
Speaker0: brief explanation, what they do, basically, they track the supply chain in the textile industry.
Speaker0: So basically, when you want to buy a T-shirt, you probably want to know,
Speaker0: you know, from the very beginning, you know, what happened, you know,
Speaker0: from the raw materials, you know, where it was done, et cetera, et cetera.
Speaker0: It's a little bit, actually, it is a supply chain issue.
Speaker0: And supply chain is a big issue, you know, obviously, now a little bit watered
Speaker0: down with the latest twists in the US.
Speaker0: But I think at the end of the day, that's a key question to be answered.
Speaker0: And being good, you know, in a very specific niche and a very good vertical,
Speaker0: this is a key thing. And then for us, it's a very early investment.
Speaker0: We thought it's a great team, two young ladies who have a lot of experience in the space.
Speaker0: And obviously, it's a French company.
Speaker0: So textile, fashion, that's probably a French thing as well.
Speaker0: So I think they are also very good positioned when it comes to that.
Speaker1: How do you assess impact and commercial viability simultaneously than when you're
Speaker1: evaluating those green tech software startups?
Speaker0: We don't.
Speaker0: We only evaluate commercial viability.
Speaker0: To be crystal clear, and that's maybe also a misunderstanding,
Speaker0: we don't do impact because we want to do impact.
Speaker0: We think impact is a great way of making money.
Speaker0: And that's what we are for because obviously we manage the funds of our investors
Speaker0: and we really want to make sure that they get a nice return.
Speaker0: We think impact is a trend theme.
Speaker0: I think there are a lot of good opportunities to make money.
Speaker0: But when we look at a company, it really must be ROI driven.
Speaker0: It really must be part of a value chain.
Speaker0: It really must solve a true economic problem and if that economic problem also
Speaker0: solves an impact problem, even better. I just give an example.
Speaker0: I did an investment just a couple of weeks ago in a Germany-based company south
Speaker0: of Frankfurt called Xelera.
Speaker0: With a little bit in a twinkle in an eye, I say they are a Nidvidia competitor.
Speaker0: But actually, they really are.
Speaker0: Basically, what they do, they do kind of a compiler for a chip, for an FPGA chip.
Speaker0: FPGA chips are programmable chips, which help basically to dramatically increase
Speaker0: the capacity of data centers.
Speaker0: So basically, since there's so much traffic now hitting data centers with all
Speaker0: this AI traffic, data centers are desperately looking for solutions,
Speaker0: how to mitigate this traffic, offload traffic, still keep security.
Speaker0: And Xelera is helping data centers doing that.
Speaker0: So it's a really ROI case because basically data center traffic consumption
Speaker0: goes down by 50, 60 percent by using that technology.
Speaker0: But in addition, obviously, you know, when traffic for the same, you know,
Speaker0: traffic hidden in a data center goes down by 50 percent, the CPE usage,
Speaker0: you're suddenly saving 50, 60 percent of energy, you know, in a data center.
Speaker0: So it has a huge impact as well.
Speaker0: So would I call Xolera an impact investment? Probably not.
Speaker0: It's more like a semiconductor investment, but it has a huge impact.
Speaker0: It has a clear ROI case and this is why we also call it an impact investment.
Speaker1: Mm-hmm. I see. For our audience, I would be wondering, what do you think, guys?
Speaker1: Which matters more when investing in greentech?
Speaker1: Measurable CO2 impact or scalable business models?
Speaker1: Let us know how you decide. It's a hot debate.
Speaker1: You are obviously an investor, and I do hope you do have some advice for founders.
Speaker1: What's the mistake you see most often, not necessarily only in greentech founders
Speaker1: but pitches you get and how do you fix them is it that they spray and pray and
Speaker1: send their uh pitch deck everywhere and it it's not necessarily a fit with most of the investors
Speaker0: Okay so just go maybe go first green tech and then a little bit more general
Speaker0: so So, but then, you know, this green tech comment is already a general comment.
Speaker0: Don't think that a product or a solution, you know, is fixing anything. It simply doesn't.
Speaker0: It's also don't think that, you know, that you have developed something which
Speaker0: solves a solution which really doesn't exist.
Speaker0: Because that shockingly often is often the case.
Speaker0: You know, people, you know, basically have kind of this theoretical idea that
Speaker0: something needs to be solved and then they develop a product or kind of a solution
Speaker0: around it and then in reality nobody needs it because it simply is only a theoretical
Speaker0: problem, not a real-life problem.
Speaker0: So I think, you know, obviously the key thing is when it really comes to kind
Speaker0: of starting your startup or really get industry expertise and really try to
Speaker0: solve a problem which exists and which creates ROI,
Speaker0: which really, at least in B2B investing, which really, you know,
Speaker0: as simple as that, you put out a piece of paper, you can go to a customer and
Speaker0: you say, look, when you take my product, when you take my solution,
Speaker0: you can save X in cost or you can get, you know, so much more nimble or you
Speaker0: can gain so much more customers.
Speaker0: And that really requires an
Speaker0: in-depth knowledge of an industry and the workflows within that industry.
Speaker0: And I think that's just my advice, you know, to a green tech founder,
Speaker0: but also to any technology founder.
Speaker0: First of all, try to sort that out.
Speaker0: And then when it comes to pitching, you know.
Speaker0: I think that's a classical thing. You can do spray and pray,
Speaker0: but what are the chances that, you know, you are the one who's picked out of
Speaker0: that inbox, you know, deal flow we are getting every day?
Speaker0: I think carefully think, you know, what could be a good investor for you.
Speaker0: And when you've identified people you think are a good fit, try to find people
Speaker0: who know them and try to get a personal introduction of some sort.
Speaker0: So I think we've never not taken a call with a company when we got a personal
Speaker0: introduction, unless it would be completely out of our scope.
Speaker0: So I think that's a golden rule.
Speaker0: Don't rely on.
Speaker0: Obviously, you have to do your test copy. You really have to be knowledge about the market.
Speaker0: But the next step is really, even in the world of AI, technology,
Speaker0: Zoom and everything, try to get the first personal contact, the first personal touch.
Speaker0: And that takes you very long.
Speaker1: Interestingly, you talked about Celera. Something rang in the back of my mind.
Speaker1: I interviewed them five years ago.
Speaker1: Almost exactly to the day. That's pretty interesting. thing
Speaker1: um you talked about like you mostly
Speaker1: run series a rule of thumb is like a
Speaker1: hundred million revenue um i a
Speaker1: few a few months ago i talked to an investor
Speaker1: and i asked him yeah you're looking for startups like
Speaker1: one million us dollars or one million euros revenue and
Speaker1: he said if i get the chance i always take two euros um so um at this stage they're
Speaker1: getting really serious with their startup what traction metrics or early points
Speaker1: of proof are most persuasive to you when you evaluate such a company okay
Speaker0: Just you know just be clear a series a is not a hundred million it's a million,
Speaker0: one million in revenue and is it a random number yes and no um you know could
Speaker0: it be 800 could it or does it need to be two or three million?
Speaker0: Probably. I think when it, I always, I think venture capital is about,
Speaker0: the willingness of taking four risks. There's a team risk, there's a,
Speaker0: Product risk, there's a market risk, and there's a scaling risk, right?
Speaker0: And as a series A investor, you probably want to take one risk, which is a scaling risk.
Speaker0: And all the other three risks should have been more or less validated.
Speaker0: You know, obviously, the team, you don't know. So obviously there are a few
Speaker0: things where you can, you know,
Speaker0: other than obviously the personal interaction with the team,
Speaker0: which is super important, there
Speaker0: are a few things you can get an idea whether it's a really good team.
Speaker0: For example, it's the simplest stuff, cap tables, like people who are already
Speaker0: 70% diluted in a seed investment. They're probably not great guys because they
Speaker0: kind of didn't understand.
Speaker0: A seed round. Um, um, and, and, and then obviously, you know,
Speaker0: when you've spent already 5 million to getting to your first hundred thousand
Speaker0: in, in revenue, that's probably not a stellar performance.
Speaker0: So, you know, you get that, but then the team is very important.
Speaker0: And then obviously a market and product goes a little bit along,
Speaker0: you know, when you have a critical mass of customers,
Speaker0: there probably is a market because people are buying and, you know,
Speaker0: when people are buying and aren't churning, then you probably have a product
Speaker0: because it's working and people seem to be happy.
Speaker0: So, and I think as a Series A investor, you want to have these three things validated.
Speaker0: And that can be like, also depends on the product.
Speaker0: That can be, maybe you have a company who does a product which really instantly
Speaker0: gets like huge contracts and then you have a few couple of big brands.
Speaker0: I'm using that and then it's already a series A and then you have probably a
Speaker0: kind of a more like a small ticket B2B play, you know, which even resembles
Speaker0: to a certain extent to B2C play.
Speaker0: And then you want to have a thousand customers. You want to have like two years
Speaker0: of solid KPIs and you really want to see the growth curve.
Speaker0: So I think it's where kind of you position yourself. And then,
Speaker0: so that's a series A to me, that's a series A.
Speaker0: And when it comes to pre-series A, I think.
Speaker0: You know, out of the three risks, probably one of the risks isn't really sorted out 100%.
Speaker0: So you're willing to say, well, the guys, probably they have a product,
Speaker0: they have a few customers, they've kind of got a good job in product development.
Speaker0: But you clearly sense they really haven't found their go to market yet.
Speaker0: Probably they have to do a little few twists. you know
Speaker0: 80 percent seems to be okay but they have still
Speaker0: you know like they need a year or 18 months to
Speaker0: really go very solidly but really then
Speaker0: is use you know kind of makes sense to put in four five six or seven or eight
Speaker0: or ten million and really deploy it for scaling the company i think that's the
Speaker0: difference between kind of
Speaker0: a extremely early pre-series a pre-series a and kind of a solid Series A,
Speaker0: where you really want to deploy money for getting,
Speaker0: by the way, also very important, what's the difference between a Series A and a Series B?
Speaker0: I think a Series A should take you with the money you raise,
Speaker0: you know, from a CEO-led sales model to kind of a broader scalable model.
Speaker0: So basically, it's a transition, you know, from transitioning from a founders-led
Speaker0: team to a team which is mainly driven by the second layer where you have hired a VP sales,
Speaker0: where you're probably hired a VP product, and everything isn't relying on founders anymore.
Speaker1: That's a pretty nice definition. I was also wondering, because the space we're
Speaker1: talking about right now is pretty full of passwords like sustainability.
Speaker1: How can founders there stand out with some substance because i do believe you
Speaker1: do get a hell lot of buzzwords on these uh pitch decks
Speaker0: Yeah and probably it's also that i'm a little bit longer in the market don't care,
Speaker0: as i said our roi counts understand the workflow understand the industry you're working in,
Speaker0: are you really solving a problem are you going to make money um forget about
Speaker0: the buzzwords And by the way, I think sustainable is a great word. It's a great word.
Speaker0: You are sustainable when you're probably going to be around in 10 years from now.
Speaker0: I've never seen a money-losing company being around in 10 years.
Speaker0: Other, I don't know, due.
Speaker1: I have to smile here in the background because before we started,
Speaker1: I told you I'm now in the 11th year here with Startup Radio,
Speaker1: officially sustainable.
Speaker1: Let's talk a little bit about future trends and strategic foresight.
Speaker1: The role of the Dach-based screen tech, what will they play in Europe towards
Speaker1: a broader push for net zero emissions?
Speaker0: I think they will play a 20% to 30% role. The German market in Europe is 20% to 30%.
Speaker0: And, you know, at least when it comes to startups, you have France,
Speaker0: you have a little bit of other areas. So, well, it's probably 30%.
Speaker0: Yeah, I think there will be a few leaders. There will be some groundbreaking
Speaker0: technologies coming up.
Speaker0: But it's a European ecosystem. Even so, we invest pretty nationally,
Speaker0: and I think the contribution will be – it's a percentage game. It's a numbers game.
Speaker0: It will be 20% to 30%.
Speaker0: That's my personal guess.
Speaker1: Personal guess is also totally fine here. I do understand a lot of what VCs
Speaker1: doing is gut feeling, and it's always good when you get a little bit of this
Speaker1: gut feeling here teased out.
Speaker1: Do you foresee the green tech software becoming a default layer across all industries,
Speaker1: similar to something like how cloud computing has evolved?
Speaker0: No.
Speaker1: No?
Speaker0: No, definitely not. Because a default layer means you're really part of the value chain.
Speaker0: And being kind of,
Speaker0: And really becoming part of the production value chain of a specific solution.
Speaker0: So, you know, obviously, will green tech be very important for running businesses? Yes, absolutely.
Speaker0: Yes, because you have reporting requirements.
Speaker0: You know, you basically also want to become more competitive to a certain extent.
Speaker0: It really also probably helps you reducing cost in any sort,
Speaker0: especially when it comes to carbon pricing, et cetera, et cetera.
Speaker0: But being a default layer, so kind of being absolutely required to run a business.
Speaker0: Well, maybe I have too little of an imagination, but for the moment being, no, no.
Speaker0: Everything which I'm seeing, even on that mapping, wouldn't let me that it's
Speaker0: going to be a default player, like a cloud infrastructure, that's not going
Speaker0: to happen. Maybe in five to 10 years. I don't know.
Speaker0: But from what I see now, I'd be skeptical.
Speaker1: The EU is always pretty forward in regulations, taxations.
Speaker1: What impact do you see on this EU-level carbon taxes or green subsidies they
Speaker1: could have on Startup Formation and Funding.
Speaker0: I'll tell you, subsidies, always bad, really bad.
Speaker0: I think there are far too much subsidies already in the market,
Speaker0: which are completely distorting the market.
Speaker0: You know, a lot of stuff is going to subsidize, which doesn't make sense,
Speaker0: which doesn't have a sustainable value proposition.
Speaker0: I really am a big fan in carbon taxes. That's probably the most elegant and
Speaker0: most comprehensive solution, you know, to solve problems.
Speaker0: Because, you know, it really gives a price to something which hasn't had a price.
Speaker0: And the very moment something has a price, you can do marginal trade-offs.
Speaker0: And I think that's a wonderful thing. And, you know, hopefully, will it ever work?
Speaker0: Let's see, over the next 10 years, but at least from a concept, that's brilliant.
Speaker0: Because, you know, the very moment you give, you oblige people to think in margin gains, you know,
Speaker0: technology really, really gets rolling.
Speaker0: First low hanging fruits are fixed and
Speaker0: then you know the more the
Speaker0: price increase you know more tough problems get
Speaker0: solved and and there's and and then also it's kind of to a certain extent you
Speaker0: can plan with it probably you couldn't you can't really plan for the exact price
Speaker0: but you can plan with a long-term trend and that's always a very good thing when you can plan.
Speaker1: That's totally true. Talk about long term, let's talk about your positioning as a VC high enough.
Speaker1: You've raised Fund3 and you have a partnership with Anka Ventures.
Speaker1: How will this amplify your ability to support the green tech innovations in the DACH region?
Speaker0: Just a very brief comment on Anka Ventures. Anka Ventures, we know them very,
Speaker0: very long. Actually, they used to work with us.
Speaker0: Actually, they were part of our team, at least most of them within Anka Ventures.
Speaker0: So it's a little investment boutique who's specialized in impact investing,
Speaker0: but also in seed investments.
Speaker0: And basically, they really help
Speaker0: us to source deals and to even kind of structure deals in the seed phase.
Speaker0: We see them kind of as a feeder.
Speaker0: It's kind of a feeder initiative for us.
Speaker0: About 10% of our fund will deploy in kind of seed opportunities in partnership
Speaker0: with Anka Venture, you know, just to have a foot.
Speaker0: Into great teams and great performing seed startups at a very early stage.
Speaker0: Also, what they bring on the table, like when they found it,
Speaker0: they had this vision early on.
Speaker0: So, and at least in France, but now also starting in Germany,
Speaker0: they do have a name in impact investing, early stage seed impact investment.
Speaker0: They do have quite some knowledge.
Speaker0: And it's always great, you know, to have knowledge in the team.
Speaker1: I see. If you had to bet one under-the-radar green-tap subsector right now, what would it be and why?
Speaker0: It's infrastructure. Nobody really talks about infrastructure.
Speaker0: It's about telecommunication. Well, especially when it comes to software.
Speaker0: I remember like all these ideas when it came to B2C commerce, when it came to B2B,
Speaker0: they always, all these ideas have been out for 30 years.
Speaker0: I remember in the 90s, like being
Speaker0: in the Silicon Valley, we talked about e-commerce, we talked about SaaS.
Speaker0: Obviously, it wouldn't be called like that, but there simply was the underlying
Speaker0: infrastructure missing.
Speaker0: And I think now, especially when it comes to software, when it comes to AI,
Speaker0: but when it also comes to kind of pre-tech solution, which basically requires
Speaker0: the analysis of huge amounts of data.
Speaker0: You need to have the underlying infrastructure and people really,
Speaker0: really need to go into this direction.
Speaker0: This is also a reason why we did our investment in Xelera, where we are looking in other sectors.
Speaker0: I think the sad news one more time is when it comes to infrastructure,
Speaker0: It's mainly a Silicon Valley Israel play, but there are always a few hidden
Speaker0: gems in Europe as well, and we are actively looking.
Speaker1: I see. Wolfgang, thank you very much for your time.
Speaker1: We will link down here in the show notes your LinkedIn profile.
Speaker1: You obviously have a lot of contacts. Before this interview,
Speaker1: I realized that we have more than 120 contacts in common, but it needed an international
Speaker1: PR agency to get us in touch. By the way, they did a good work.
Speaker1: And secondly, we will be providing a link to the company website so you can
Speaker1: do some digging, some research.
Speaker1: And of course, there's a place where you can pitch as well. And you'll be back
Speaker1: for our premium subscribers for a few more Q&As. Thank you very much.
Speaker0: Perfect. Thank you very much. Great interview.
Speaker1: Thank you.
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