As part of the SCAF knowledge series we proudly present the Powering Development Podcast. In this podcast, we interview people in the renewable energy sector to share their first-hand experience, how they overcome challenges, and what potential the sector holds.
In the second episode of Powering Development, SCAF’s Alexander Kinnel talks about the joys and pains of fundraising in the energy sector with Emmanuel Beau (Founder & President of On.Capital) and Karthik Chandrasekar (Partner at Sangam). Both On.Capital and Sangam currently receive SCAF support under SL0 that is used for matching costs of fundraising and pipeline development.
While On.Capital and Sangam are active on two different continents, Africa and Asia, they see similar trends in the cleantech VC sector in both markets.
And we know that this bubble is a risk, but you can also take advantage of it if you’re a bit smart.
(Emmanuel Beau on electric mobility)
If you are founder tackling climate change, you should know your GHG reduction numbers!
(Karthik Chandrasekar on clean tech start-ups)
What would you be interested in to learn about SCAF’s work or the work of our partners? Which subsectors and geographies are most relevant for your work and should therefore be covered? Are there certain areas during the development process that the knowledge series should address?
Reach out to us at firstname.lastname@example.org.
Alexander Kinnel: Hello and welcome to the second edition of SCAF’s knowledge management series. If you have missed the first episode, you can find it on our website. Today I have again invited two of our existing partners to talk about the joys and pains of working in the energy sector. Our two distinguished guests today are Emmanuel representing On.Capital and Karthik from Sangam ventures, both of which SCAF currently supports in fundraising. Welcome.
Thank you both for joining today. I’m excited to have the opportunity to speak with you about venture capital in general and your funds in particular. But before diving into the discussion, I think a round of introductions is due. So Emmanuel, could you please start by introducing yourself and On.Capital?
Emmanuel Beau: Sure. I’m Emmanuel Beau, I’m French as per my accent and currently located in Paris. I’ve been working in investing mostly in Africa for the past 15 years in microfinance, agriculture and energy. I previously co-founded Energy Access Ventures which was a $ 90 million fund dedicated to energy access in Sub Saharan Africa, which is now fully invested. Before that, I used to be at Schneider Electric investing from their sustainable development department, a small seed fund.
On.Capital was founded two years ago to provide advisory, fundraising and investments, still in the energy space, but not only in Africa. We’re currently raising a new energy access fund dedicated to the African continent with the support of SCAF. It’s a pleasure to be with you today.
Alexander Kinnel: Thanks! Over to you, Karthik.
Karthik Chandrasekar: Thanks, Alex. I’m Karthik Chandrasekar, the founder and CEO of Sangam. We are an early-stage climate fund focused on supporting deep tech innovations, with high- risk commercialization capital. I myself am an engineer who went to work with oil and gas and then finance and has been investing since 2008, going further and further earlier stage. I’ve worked with private equity funds, venture funds and then lastly with a Social Impact Fund called Acumen. I think what we’ve been in the hunt for with Sangam has been finding the additionality of venture investing, which should be around venture investing and helping with commercialization of technologies that can hopefully improve humanity’s state of being. Our setup came from a partnership between the Shell Foundation and the US State Department. Since then, we’ve been supported by some amazing foundations. We’re in the middle of a fundraise, pretty close to first close. Maybe we can talk about that later.
Alexander Kinnel: Sounds good, thank you. The common theme here is that both of you are currently raising a venture capital fund in the broader clean tech space with the distinction that one is focused on Africa, and the other one is focused on India and neighboring countries. At first, I want to delve into the similarities and differences between the two regions from a sector perspective. Could you describe maybe the thematic focus of your respective funds? And what are the hot market segments in your region currently? Are there specific sectors or technologies you find most attractive? Karthik, could you start with India, please?
Karthik Chandrasekar: I think what’s hot is the same as everywhere in the world. It’s mainly EVs and carbon markets and all kinds of FinTechs related to both of them. The last few years, exuberance on AgTech seems to be fizzling. I think it’s the same not just in India and Africa, but also in the global market. But as an investor, one we take a climate science based approach to our investment thesis. And two as I mentioned, we require a strong additionality to what we are investing in. The question for us is, what’s getting missed out with all this climate fervour, or at least of the recent years. What’s exciting to us right now is ideas around improving soil carbon, soil microbiome, as well as technologies which are working on how to abate sectors like freight transport, steel and construction.
Alexander Kinnel: How about On.Capital’s strategy for Africa? Is it similar?
Emmanuel Beau: There are similarities with the trajectory of India, I would say, even though with a slight delay, and we’ve been always looking at India in terms of learning what happened both in the clean tech, AgTech, and climate tech in general, how those companies were scaling up, how people were valuing them, who is exiting, etc. But for Africa, I would say that our energy access fund is still mostly focused on minigrid solar home systems or pay as you go solutions. These are ingredients that have been developed in the past 10 years, and that we’re now deploying and replicating at scale, be it in emerged economies or more challenging markets on the African continent.
But we also have new verticals that are appearing and emerging strongly. One of them is connectivity. Access to the telecom or internet through solar powered base stations is a big, big opportunity. The IoT, Internet of Things and connected devices, sensors, smart infrastructure at large are a huge opportunity. We see, of course, e mobility coming up, a lot more facility management and connected buildings. The theme of grid hedge is really what we’re deep into. And the way the energy market has evolved globally is applying also to the African continent.
The grid hedge market is driven by electrification, as more and more things are being electrified and powered by electricity, and also by digitization. The more energy is managed digitally, the more we use digital tools, the more micro energy is required; the third factor is decentralization – we have more distributed assets that power energy close to where it is needed. The additional aspect on the grid hedge paradigm – which is really a big market, and I think lighting was just the tip of the iceberg – is basically anything as a service, and making all of those business models more as a service. This is a massive opportunity where people don’t look at how they can buy or own energy assets, but rather benefit from whatever they want to use the energy for. That has opened some massive opportunity for us.
So we see a second wave of investable opportunities. They’re more mature and we see a lot of profitable companies, which is very different from the early wave that we looked at. It’s very exciting times to be in the market – many firms have left the market, because they burned their fingers. Valuations have gone down, there is less money available, people are more realistic, more reasonable. And there are more local SMEs as well, that can just seize those ingredients, those tech elements that have been developed in the past 10 years, to use them for their own benefit in their own markets. Very exciting times in terms of strategic opportunities.
Alexander Kinnel: That’s super interesting. I guess feeding the additional demand for electricity is electric mobility. I remember you saying at the SCAF annual meeting, Emmanuel, that there are not enough roads in Africa for all the e-mobility startups and their growth targets. Would you say that the market has cooled down a little? I would also be curious to hear how you see raising interest rates and the influence on evaluations, especially in the context of infrastructure like investments.
Emmanuel Beau: Let me start with the first point on electric mobility. I think my comment was maybe slightly different, Alex. On the road aspect, I would say that there’s not enough investments into road development, compared to how much is starting to go into electric mobility. There’s definitely a hype, and I would not say that it has cooled down. Actually, the bubble is heating up. It’s just the start. I think for the next two or three years, we’re going to keep seeing that bubble in the market, a lot of investments.
What’s really interesting is that valuations in that space are way higher than in sectors where people are doing very basic things. In electric mobility, there’s still a lot of unknowns. What are going to be the assets that people value? Will it be garages or car importers? Can your company be wiped out by large manufacturers coming in from China or India? A lot of people are reinventing the wheel developing different business models, trying to understand where they want to sit in the value chain long term. And learning it the hard way while burning investors’ cash. And when you look at the valuations in that space, compared to people doing water, or even road concessions, which is basically a monopoly, it’s crazy to see that some investors are willing to value completely unproven businesses a lot and put a lot of cash versus their adverse reaction with quite traditional unexciting businesses that actually make money. It’s interesting to be able to compare how investors look at this particular segment versus the rest.
So electric mobility is not cooling down for sure. The opportunity is massive. We’ve done a few investments, even recently, in three wheelers, in public buses. And in two wheelers, we’re about to make a new announcement, Alex. It’s interesting to keep investing in the market. But we make very selective bets, like we did in the solar home systems. And I think we did really well with a couple of good exits down the road. We’re investing extremely early. And we know that this bubble is a risk, but you can also take advantage of it if you’re smart.
On the other question you had on the interest rates, and the influence on valuations, I think that’s hard to answer. First of all, building infrastructure with five year loans is extremely difficult. We see loans that are too short and too expensive. We’ve not necessarily seen interest rates going up, they are remaining between 8 and 12 %. Sometimes they go down to six, but they are very far from the infrastructure type of debt that would be required to really fund those assets properly. It’s crazy to see that investors who actually want to have an impact and invest in long term infrastructure demand such high interest rates. In Europe, in many geographies, there is infrastructure built with long term finance with very concessional rates. It’s much harder to get that type of funding in Africa. What is definitely happening now is that investors are discounting from valuations the amounts of debt that have been raised by companies, which is very normal in the traditional private equity and infrastructure space, but quite new to companies that were used to raising VC type capital in the early days. There’s this sort of challenging journey from VC to PE for those companies. We invest with venture capital methodologies in those companies very early on. That means we give them at times a quite generous valuation, because we want to make sure the team is not diluted but incentivized, and we believe in the brands and overall platform value. But down the road, you’ve got the PE guys who come and say, okay, you’ve raised tons of debt. Yes, you’ve built up the assets, but we’re going to value you like any other traditional utility. There’s a mismatch in terms of how people value those companies to derisk them and grow them to the point where they become investable by the big guys. But then the big guys don’t really value the work done. So they don’t really give the valuations people want. That’s the challenge we are facing right now.
Alexander Kinnel: Really interesting point. Is that something you can echo for India, Karthik?
Karthik Chandrasekar: Well, Indians won’t have the lack of roads hold us back. Actually, Indian road infrastructure has been improving exponentially in terms of the urbanization and the development in rural areas and highways has been really amazing. That’s actually positive for us. And then there is a very strong incentive within the government ecosystem to push for EVs, also to push for a lot of localization of the EVs and especially batteries and manufacturing. They’re trying to figure out what worked in China, and how we can make that happen in India. There’s gonna be a push for some level of resilience in the local markets being invested into innovation. These are exciting times for the EV market.
But as you said, it’s a bit of a bubble, similar to Africa. There’s crazy amounts of activity, two wheelers, three wheelers, even the four wheeler segment, and I’m talking about activity in the sense of what Emmanuel was pointing out. There are generic startups with investments and valuations that don’t make sense. But in India, there’s also investments in the largest corporates. I’m talking about recent investments that happened Mahindra Motors’ EV division, Tata motors’ EV division, TI Group’s EV division, even in some of the largest corporates in India, raising billions of dollars of venture capital. It’s the PE and ESG investors that are cropping up now. I think that’s just investments coming across the ecosystem from the largest to the smallest. What we are excited about is that, because this space is looking very interesting, there’s a lot of new technology innovations coming out of universities, into the startup ecosystem. We’re just closing the first investment of the new fund in a startup creating a novel chemistry for ultra safe lithium ion batteries. The same technology is applicable for lithium phosphate. Phosphate is applicable for sodium ion or for any solid state. That’s an investment in India, but also for the world. This is game changing tech coming out of India.
We are also closing an investment in a hybrid turbine manufacturer for freight trucks, which we think is really hard to abate sector, which needs a lot of attention. We believe that if the company shows commercial viability, they literally could be the next evolution from the ICE engines. We’re seeing a lot of these startups developing components – motors, thermal management technologies, IoT, digitization, enabling for payments, all of that happening within the EV space.
The idea for us is if we are investing, we do it not just for deployment but for technology that can be competitive globally. The good thing is, if we find them early, we get them not at the crazy valuations that are going around. That’s the biggest impact of means of the global macro advent. So strong correction in valuations, but there’s also slowdown in the pace of investments. Two years back, I think in 2021, maybe even early 2022, there was a speed of investments which was a bit unreal. A great example is the excitement about hydrogen. Suddenly, every electrolyzer company got an investment. The question was if the core technology was competitive and could be commercialized, or if investors were just trying to time the market. Those are the things that are worrying for us if we are investing in new technologies, but otherwise, it’s pretty exciting times to be investing into climate tech in India.
Alexander Kinnel: Absolutely. We also talked about the buzzwords like green hydrogen, blockchain, ESG. Now moving from the investment side to the fundraising side: How do you currently see the fundraising environment? And when you were talking about the changing pace, did you have a change in strategy because of that? How close are you to a first round anyway, Karthik?
Karthik Chandrasekar: When we pitched to you, Alex, that was a differentiated strategy already. The idea was to focus on early stage high risk climate innovations pretty close to commercialization. But at the end of the day, that’s not the most interesting thing for what you would call the development finance investors out there. The focus there is more on deployment. As carving out the seed fund, the idea was to go look for investors who want to take on that risk, but also care about coming up with new solutions for hard to abate sectors, the tougher problems for the inclusiveness and for the impact. The strategy was already in place, and it worked out well. Because we mainly focused on local and global family offices and foundations for our fundraisers, and that could include FMIs. This is considered too risky, also given the global macro geopolitical headwinds. A lot of them are sitting on the sidelines, which is not a good thing, but doesn’t affect us yet. But everyone in the market, I think, sees a seismic shift coming. Everybody from the largest corporates to individuals who have built amazing wealth know that there is a big change coming. The companies that are on the top today are not going to be the companies that are on the top 10 years from now. It’s interesting to be working with them and having those conversations as we are building not just the fundraise strategy but also the investment strategy there. Because these guys care about what we are doing and how we are doing it. That makes it a very interesting and valuable fundraising exercise as well.
We have an initial sponsor commitment. So we are closing our first three investments that I talked about, the battery company, the hybrid turbine company, and then we’re also closing one around biodiversity, looking at tissue culture as a way to protect genetic biodiversity and force more regional handling of agricultural crops. I think we’re pretty close to the first close. Hopefully before October. I learned that paperwork takes a long time, so commitments are there, we just need to close the paperwork. And I assume that the West is going to go on holidays within the next couple of weeks.
Alexander Kinnel: Emmanuel, on the fundraising environment in general, and then more specific, where are you in the process currently?
Emmanuel Beau: I would say the fundraising environment is worldwide very difficult, but so far still pretty much okay when it comes to raising for Africa. I would say it’s a very specific investor pool that’s looking at the continent. But overall, private capital has been harder to raise across many geographies since the beginning of the war in Ukraine. For us, the fundraising is doing well. It was important to make sure we set the right foundation with our fund manager to go fast towards the closing of the fund. We expect to close sometime by either late this year or early next. But I think the Africa Climate Summit in September should be a good acceleration point. The particularity of what we’re trying to do is, we’re speaking to a lot of private investors. And I think they’re not the easiest to convince, but we have got good traction and they have to have a different appetite for Africa compared to DFIs. These are not the easiest investors to convince, but we’re having good traction.
Alexander Kinnel: Now coming to the next topic, ESG considerations have gained significant importance in the investment world in recent years. How does your fund incorporate ESG factors into its investment decisions, Karthik?
Karthik Chandrasekar: All the startups we support are creating climate impact, either mitigation or adaptation, but we also need to make sure that they do no harm. We also work with very early-stage startups. Everything that requires the founders’ attention be well justified. We are trying to redesign how we do ESG with startups, and we are taking a startup approach to it. No 10 page excel checklists or 100 page policies that they don’t look at, don’t use, but designing something more specifically pointed. Including A, what are they doing? And B, what are they tracking? We are getting help from the Autodesk foundation for our investors to figure this out.
I’ll give you an example as we are going through the exercise. Oddly enough, ESG should be all encompassing, but does not cover customer protection at all. You can literally say that you’re ESG compliant and be treating your customers really bad. And the only information you find online on customer protection is actually linked to the MFI ecosystem. There’s a lot of do no harm when it comes to working with MFI customers. But there is none for selling solar lights or anything else. I’m sure Emmanuel has some experience on that as well. So I think we’re starting there. That’s where it matters, the first two years where startups want to be engaging with customers, promising them things, doing things that hopefully improve their lives. And it’s really important that we cover that. Getting a very grounds-up approach to ESG. It’ll be interesting to see what comes out of this exercise. Part of that is we’re iterating that with our current portfolio of startups. We’re relatively late stage to test it with them, take their feedback, do it so that they can actually integrate it into their way of doing.
Alexander Kinnel: Not only ESG, but also impact investing as a whole is becoming increasingly popular. Emmanuel, how does your fund measure the impact of its investments? And how is a focus on impact influencing the targeted pool of investors and return expectations?
Emmanuel Beau: Honestly, on the ESG topic, I could speak for a very long time. I used to be the ESG Officer of our firm, working with five European DFIs and using the IFC performance standards. We ended up with a tank to shoot an ant, a mouse. It was completely over engineered. I think that the problem is we’re generally applying extremely heavy ESG standards on tiny companies when the biggest corporates are not even scratching the surface of those ESG requirements. There’s a big problem of approach from the DFI community and overall ESG investors in terms of what they require.
Let me give you an example: Are Apple, Samsung, LG, HP required to follow each of their device and prove that they will recycle every little battery they distribute worldwide? They don’t. But all of the poor, small, tiny companies, loss making distributing lanterns, are to prove that they will recycle each of those batteries, and they will pay people to take care of those batteries and repatriate them back. It’s just one example to show that the power lies with big corporates that don’t necessarily have to engage with the same level of burden when it comes to reporting and what they’re allowed to do. And you then have tiny companies that not only have to electrify people with clean energy, but they need to go for poor people, vulnerable geographies within fragile countries and volatile economies and generate carbon reductions plus a 15 % IRR. And they need to be ESG compliant and recycle everything. Basically you’ve loaded the donkey with tonnes and tonnes of stones, and you tell them to run fast and win the race. It’s super hard. What we’ve done is, we have developed a solution and we invested in this company called Green Data Lab recently to digitize all of this and help companies capture better ESG and impact.
So we look at really ESG and impact as one. In fact, it’s too often separate, which I don’t completely understand. But basically, we look at how do they achieve their impact targets, which is typically key or core to their business in any case. For example, how many people you’ve reached, how many clients are happy and so on. And you try to align the impact objectives with core business objectives. If they happen to be misaligned, then maybe there’s a bigger problem with the mission of the business. But when it comes to reporting, I already mentioned, digitization and making those tools easy and fit for purpose for environments that are typically offline, very distributed with low skilled talents at times, that is a challenge. We’ve tried to make that challenge an opportunity. And we’re now helping many of our portfolio companies have a fully digital tool that helps them on their reporting and core business on a daily basis using smartphones and offline software solutions that help them capture all this data, report on it, drive their action plans, and so on.
In terms of investors, Alex, and how impact is influencing the targeted pool. In fact, in this new fund that we’re raising, I think that people are sensitive to the return profiles more than the impact. They like the impact story, but I think contrary to the previous fund, where the impact was first and we managed to demonstrate very good returns, this time, we’re talking to private investors who more importantly want to get their money back, which is, honestly, good. On the impact side, it’s very closely aligned. If we’re successful at getting businesses sustainable, profitable sustaining their own activities, they can sustain their impact. We do see a very strong correlation between returns and impact, usually. The big challenge is more on how we allocate our own time and there’s a bit of a tradeoff. Some companies will have a great impact, but they’re not going to deliver a great exit. We may spend more time to help the strong ones and help the ones that can give us the best exits rather than spending as much time on the ones that give a good impact, but not the same financial return. We’re not going too much to the DFIs right now. All of them and many foundations still want to see impact first. But since we’re talking a lot to the private sector, they don’t see necessarily the impact as important as a 15 % Net IRR.
Alexander Kinnel: You’re right, the line between ESG and impact is very blurry. But for me ESG is a risk mitigation tool. And impact is the benefits that the society or the environment perceive from an investment. At least in my mind. But it’s great that you speak about your experience, because you have managed a fund before. How important is it for a fund manager to have that track record? And what tips can you give other first time fund managers that seek to raise and deploy a fund?
Emmanuel Beau: I think that the track record is definitely critical. Most investors want to see that you’ve been able to create business growth value and deliver either on the impact or the financial returns. For me, in particular, the number one thing that we’re raising this new fund on is really the track record of investing in the past 15 years and divesting successfully from many of those investments. In fact, quite extraordinarily successfully because it was risky and new business, new geographies, etc. For first time fund managers it’s just to demonstrate why they’re the good people to work with on the track record standpoints and making small investments. You don’t really have a choice. Making small investments, growing them and helping them grow is critical to help demonstrate to new investors that you can do it and build your own track record. Even if it takes two or three years, if you can invest in a couple of companies that will have a successful uplift 12 or 18 months down the road that definitely helps building the track record people want to see.
Alexander Kinnel: Karthik, you’ve worked a lot with startups, especially through the incubator and accelerator work that you’ve been doing in India. What advice would you give to clean tech entrepreneurs seeking funding? And what are the key factors that you look for in potential investment opportunities?
Karthik Chandrasekar: I have actually written a few pages on this, because we got a report for our accelerator and incubator programs to our funders. We have so many data points, but maybe I can give you my top four. One is, if you’re a founder tackling climate change, you should know your GHG reduction numbers or the GHG reduction potential. It’s just amazing the number of times you meet somebody who says, hey, I’m a clean tech startup. And then you’re like, okay, what’s your target for GHG reduction, and they’re like, oh, I didn’t have the time to compute that. That’s number one. And then, if you’re a founder – this is for technical founders coming out of engineering backgrounds – there is no excuse. If you’re the founder of the business, you need to build an aptitude for business or commercialization. Along with that, number three is to learn entrepreneurial sales methods, which is harder than regular sales. But if you’re a founder, you are salesman number one for your business. That includes fundraising, that includes going out and getting your first few customers. You need to do entrepreneurial sales, everything else you could delegate. You need to be able to build it, you need to be able to sell it. And then the last one that might also be the most important factor, founders need to focus on building relationships and not be transactional. But it’s just amazing how many times we get to founders that basically say, hey, we want money, and then they just go away. And then the next time they meet you, they’re like, hey, we want money, or they just keep reaching out to you about money, but they don’t want to build a relationship with what’s going on with their business. That seems to be also a learning that we are using as we are fundraising. What we want is good relationships with our investors as well, and not something that’s transactional.
Alexander Kinnel: That makes total sense. Now talking about exits of the investee companies, would you say that having an exit mindset from day one is crucial for the fund to be successful? This one goes to Emmanuel again.
Emmanuel Beau: That’s a good question, Alex. Most experienced venture capitalists I’ve met in the US told me no, that good exits happen for good companies. Personally, in Africa, my takeaway is, you need to be super intentional from day one. Because my job honestly, if you demystify it, is to buy potato low and try and sell it for a higher price. And whatever you pretend you do in between is maybe overly magnified. I think many investors like myself or my colleagues portray ourselves as venture builders or hands on, but we need to be extremely humble. We’ve got 0.1 % of the information required to make good advice, and we’re mostly a dish server. I can leverage my network, leverage what I’ve learned, and that’s not so much. We need to be extremely intentional in terms of where do we believe we can then sell this piece of paper.
At least in the African continent, we’re extremely focused on getting an exit from day one. We’re very much trying to speak to acquirers to understand how they will value certain assets, what assets they are interested in in the future. Sometimes they don’t know and a couple of years later, they actually start to have an idea. We’re really talking to the different teams from corporates or financial acquirers to get a sense of what they want. We try to actually listen to the clients, being the ones that are potentially buying our shares. And remembering that most times, at least in Africa, the money is not going to come back from the company we invested in. It’s going to come from somebody else who wants to buy a piece of paper from us. We do work a lot on marketing, the value of the shares that we hold, and making sure that we transform of rule, collectively, the profiles of the companies fast enough to get successful exits.
What we’ve learned is actually derived mostly from the Indian market. What they looked at was most cleantech companies ending up doing exits through secondary acquisition. PE firms, PE funds that I’ve invested in the clean tech environment in India, quite a few were just sold to other PE funds afterwards. So they didn’t manage and sell it to IPOs, but there was a lot of secondary from VC funds to PE funds, or PE to PE. That’s what we’ve been trying to mimic, building relationships with strategics very early on, like Shell, Engie, Total, EDF and the like, especially in France. And then making sure we also talk to private equity funds that actually need pipeline and want to acquire positions. The Inspired Evolutions or AIIMs of this world or Helios and the likes.
Alexander Kinnel: I’m glad that you touched upon the topic of exit routes. What other potential exit routes are there? Maybe selling off to one of the LPs in the fund? Despite any conflicts of interest that may occur, is that also a viable option, Karthik?
Karthik Chandrasekar: Oh yeah, I think it might end up being productive. As I said, the investors that we’re talking to, especially the family offices, are the ones that figure out what’s next. The good thing is, we would expect them to pay a premium as they would know the companies in the portfolio better than any other suitor. And they will also have alignment to the values of the business. In terms of responsible exits, it’s an opportunity to sell to an aligned investor who knows the company and maybe even the management committee well. I think that’s a great opportunity. We would like to cultivate that within the LP pool. I think the key there is to make sure that they are LPs. They’re not jumping in competing with us or creating situations which break that LP/GV relationships. But that said, I think we see this as a great way to build partnerships. With that relationship building exercise, you get the investors you deserve. And hopefully, you deserve some great investors, who will help us build the strategy, because continued capital needs to be solved for climate, especially. There are some great investors out there globally, who are thinking that climate solutions are the next big wave of innovation opportunities, that they will become the dominant businesses on global markets. And those are the LPs you want.
So that’s very much something that we want to think about, even as we are investing. We see a lot of co-investments happening in really early stages from corporates jumping in, and I think the smarter ones would rather invest to us because a lot of them don’t understand most of the deal terms that they’re getting into. They just sign up and buy 50-60 % of these small businesses because they just can’t deal with small numbers, and then don’t know what to do with it. Let’s not talk about specific deals, but we are seeing these dynamics play out right now. But I think if there are smart family offices, foundations out there who want to build a long-term portfolio strategy, please come and talk to us.
Alexander Kinnel: As much as I would like to continue talking, and to use now a very cheap play on words, this marks the exit of our interview. Thank you both very much for sharing your valuable insights and experiences. It has been a pleasure speaking with you about your funds and your companies. Thanks again, also to the audience for listening. I’m hoping that you will tune in also to our next set of interviews. Take care and bye bye.