Our Thesis

We strongly feel our capital should help shape a just and healthy world. We execute on that principle to the extreme, but we’re not a charity. In fact, we expect to outperform the market financially, with the purpose of reinvesting the returns into building the world we want to live in.

So, how do we expect to have our cake and eat it? By following two core principles:

Only invest in business models where impact drives profit
Focus on underfunded, but high-potential startups

Principle I: Only invest in business models where impact drives profit

Clean energy is rapidly becoming cheaper than fossil fuels, accelerating innovation enables new business models, and public momentum is shifting demand. Companies can now solve some of the big social and environmental problems at scale, without having to compromise profits. In fact, impact can be the main profit driver in a business case. Gone are the days where impactful companies had to operate at a strategic disadvantage.

A few examples of what this means within our impact themes:

Climate

Clean energy will significantly outcompete fossil energy on price and will become ubiquitous. This will transform business cases around impactful industries that were previously deemed financially unfeasible due to their energy consumption (carbon sequestration, green hydrogen production, alternative protein production, etc).
Compliance carbon markets and public demand will force companies to reduce or offset their emissions. This accelerates demand for carbon efficient production methods and offsetting technologies.

Poverty reduction

Rapidly increasing internet penetration in Low- and Middle-Income Countries (LMIC) allows for digital products that leapfrog physical banking infrastructure. This dramatically reduces the cost of loans, insurance and other financial services for small business owners and other people who are currently unbanked.
Carbon credit markets allow money to flow from the end of value chains back to the origin. The big winners of this trend are smallholder feedstock producers and companies that integrate a carbon credit revenue stream into their business model to reduce costs.

Healthcare

Breakthroughs in genetic research, combined with AI-assisted drug development will drive down the cost of drug discovery and production. Drugs will become more effective, lower priced, and faster to market.
Ubiquitous internet access in LMIC enables new business models (telemedicine, online pharmacies, medical insurance) that leapfrog the need for physical healthcare infrastructure, increasing access to medical services in previously hard to serve geographies.

Principle II: Focus on underfunded, but high-potential startups

We’re looking for underfunded investment opportunities. We believe our capital is deployed more impactfully if a company would likely not have been able to close the round without us. After all, what difference does our investment make if the company would have been easily funded anyway? Another big upside of ignoring oversubscribed funding rounds is avoiding overvalued investments. We invest contrarian.

A common argument against this practice is that underfunded companies are probably neglected for a reason: they must be less viable businesses. This is true in markets where everybody has access to the same information. However, we leverage two sources of information asymmetry to overcome this:

Low- and Middle-Income Countries (LMIC) are not on investors’ radar
Due to the very nature of LMIC, there is little venture capital available from within those countries. Capital from high income countries is not too eager to fill the gap though, because they perceive investing in LMIC as risky. Part of this perception is based on reality (currency risk, less stable economies, low supply of follow-on capital, etc). However, the other part of this perception is based on limited and one-sided media coverage on LMIC outside of those countries. The resulting overestimation of risk can be arbitraged profitably by investors on the ground who know how to separate reality from perception.
Complex technology
Every VC fund manager understands software, so most interesting software companies are known by many investors, who compete with each other to invest, causing inflated valuations. Scientific innovation, for instance in climate tech or biotech, is much harder to assess and thus relatively overlooked. This is an opportunity for those who feel comfortable navigating such topics, like us.

Contrarian investing is widely considered good practice to outperform the market, but few investors actually do so. Meanwhile, we thoroughly enjoy being curious, walking the roads less traveled and building strong networks in niche startup ecosystems. This allows us to find extremely impactful business models, without financial compromise.