Cleantech Investments speed dating

Published on June 28th, 2013 | by Chris Tachibana

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Cleantech Venture Day Comes to Malmö

With Malmö’s Turning Torso building in the background, cleantech investors, entrepreneurs and consultants met in May to hear funding pitches, learn about global opportunities, and exchange hockey quips.

At a former slaughterhouse in Malmö — still glittering from Eurovision Song Contest parties — 250 cleantech investors, developers, and business leaders met on 28–29 May 2013 for Cleantech Venture Day ‘13. This was the first time the seventh annual event, organized by Cleantech Lahti, LADEC and Cleantech Scandinavia was held outside Finland, said organizer Nina Harjula, Cleantech Lahti, LADEC. “The sector is growing,” she said. “When we first started we had only 50 people.”

The goal of the event remains constant, though, said co-organizer Magnus Agerström, Cleantech Scandinavia: “bringing investors and cleantech companies together.”
“Investors want to hear from up-and-coming businesses and entrepreneurs want to meet funders but arranging that first meeting is difficult,” said Agerström. That’s why, in addition to seminars and panel discussions, Cleantech Venture Day ’13 had investor-industry speed-dating, a deal flow pitch competition, and lots and lots of networking.

GPS: GLOBAL POSITIONING STRATEGIES

Leading the keynote speakers was Esko Aho, former prime minister of Finland and now a Harvard senior fellow. Aho began with a quote from hockey legend Wayne Gretsky, who said that good players skate where the puck is but great players skate where the puck is going. “So think forward,” said Aho. Regardless of today’s economic and political landscape, factors such as population growth and limited resources mean that cleantech will take off. “Cleantech is part of the European recovery,” said Aho, who advised government austerity but with investments in productivity programs. “We must change the normal EU mode of thinking to take more risks and be more forward thinking,” he said.

Mr Esko Aho

Mr Esko Aho

Following Aho onstage was Mohan Guruswamy, chairman of the think-tank Centre for Policy Alternatives, India, who joked that in his country, it is 40 degrees and no one thinks of hockey. But they are thinking about cleantech, said Guruswamy. He showed how extrapolating current global trends indicates that cleantech needs will grow in China and India, where trillions of dollars will be spent on air and water cleanup. At the same time, a growing middle class, especially in India, which has a young population, will demand clean transportation, housing, and energy.

Continuing the international theme, Nick Brooke, chairman of Hong Kong Science and Technology Parks Corporation, said that Chinese urbanization is driving demand for energy and other resources but the government understands that growth must be sustainable. Brooke, who brought eight delegates from Hong Kong to the event, was keen to link China and Scandinavia. Hong Kong is a perfect entry point to the Chinese market and business partners, he said, “And energy, waste and water—those are common Asia-Nordic issues.” Chuanghua Wu, Greater China Director of the Climate Group, said we are in “the golden decade for cleantech.” Global leaders are universally interested in economic growth, job creation, and resource security, said Wu. Cleantech fits these common concerns because it offers “prosperity built on sustainability.”

HOW TO, FROM EXPERTS

In addition to giving attendees a global cleantech perspective, Cleantech Venture Day ’13 provided practical advice. A panel discussion on China-Nordic cleantech connections included a new report from Cleantech Scandinavia and Azure International, a cleantech investment and advisory firm specializing in China. The message of the report and the panel: China is ready to invest, sell, and engage. National policies are encouraging outbound investment and environmental priorities—such as reducing CO2 emissions—that provide clear cleantech opportunities. In 2012, the Chinese government established a $1.17 billion fund supporting seven Strategic Emerging Industries, many of which have cleantech components, such as new energy, biotech, and new materials. Chinese VCs are looking for technologies that can reduce costs or sell in the Chinese market, with predicted future interest in LED lighting, batteries and energy storage.

But how do cleantech businesses find and engage the right Chinese partners? Localization, said Daniel Zhu of Tsing Capital. China is large and each region has different practices. Find the right niche within China and adapt to the local market, investors and government. “Talk with Chinese students studying in Nordic countries and work with local experts,” said Zhu. Take the time to build solid partnerships sand employ knowledgeable consultants, advised the panelists. Nick Brooke suggested testing your partnership with a pilot project and Peter Cook of the International Finance Corporation said co-investment would ensure commitment from both parties.

Straightforward tips for successful funding came from VC panel discussions moderated by Tarja Teppo, Cleantech Invest, and Svetlana Gross, Cleantech Scandinavia. Have a targeted pitch tailored to the VC firm, advised the panelists. “Explain why it’s something the VC firm wants to invest in,” said Cédric Latessa, Aster Capital. Jussi Palmroth, VNT Management, had general advice on how to approach VCs. “Have your documents in order,” he said. “Create trust by being honest about your weaknesses and strengths and not creating a false sense of competition, and have a good advisor with recent experience in raising capital.” Nicolas Chaudron, Electranova Capital, advised patience. Nordic investors haven’t been interested in cleantech lately and in general, investors are cautious, he says, because cleantech is less mature than other fields such as biotech or IT. Investments take 5 or 7 years to pay off. However, said Chaudron, investors will soon see good exits from investments made years ago—like those coming soon from his firm—and this should attract more VC interest to cleantech.

REWARDING GAINS

Both evenings of Cleantech ’13 closed with awards. A Hall of Fame CleanDesign Award from Cleantech Scandinavia was given to Professor Lars Samuelson, Lund University, for applying his rapid, inexpensive method for making nanowires to create the solar cell company Sol Voltaics and the LED company GLO.
The best pitches from six deal flow sessions, as judged by VC panels, were announced. Finally, the event’s CleanDesign Award from LADEC was awarded to the Finnish company Tamturbo, maker of oil-free air compressors. The prize rewards a company that has developed an industrial technology and design that is both functional and environmentally friendly.

The event ended with business representatives wiser about financing options and investors up-to-date on the Nordic cleantech industry. Asked if his time as a VC deal flow judge had been fruitful, investor Patrik Söderlund pointed to his Mountain Cleantech badge and said, “Oh yes. We’re always interested in hearing about new investments.”

Pitching_awards

The best pitches awards given by Chairman of the VC Jury Mr Josko Bobanovi, Sofinnova and Nina Harjula. 

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