An Interview with Nadine Hill and Rohan MacMahon from 2040 Ventures

Interview with Nadine Hill and Rohan MacMahon from 2040 Ventures

Hi Climate Community

Welcome to this week's edition of the Climate Venturing Newsletter!

For those of you who are new to our Newsletter, we aim to provide you with the latest updates and insights on emerging climate and clean technologies, as well as give you a view of how investors, corporates and founders are helping accelerate the world's climate investments. So Welcome!

Today I have the privilege of talking with Nadine Hill and Rohan MacMahon from 2040 Ventures, the team that manages the Climate Venture Capital Fund and the Punakaiki Fund.

The Climate Venture Capital Fund (CVCF) invests in companies that deliver high growth, high returns on investment – and high climate impact. The CVCF is focused on New Zealand and Australian companies, at least for now.

Welcome, Nadine and Rohan. Our readers love hearing from influential investors in the climate ecosystem. We are lucky to talk to you. Tell our readers: How did you end up in VC? Tell us about your professional journey and what excites you about working in climate or clean tech investing.

We are both environmentalists and capitalists. Numerous billion-dollar climate tech companies will significantly decarbonise the globe over the next five years.

Capital will have a huge role in catalysing that, so the CVCF team ran hard at raising the Climate Venture Capital Fund (CVCF).

It's an exciting time to be part of the climate investment ecosystem. What inspired the creation of this climate venture capital fund, and what differentiates the CVCF from other Australian and New Zealand climate-focused investment funds?

The Climate VC Fund is New Zealand's only venture fund focused purely on climate.

We started the fund because we recognised the urgency of climate response and emissions reduction and saw that, whereas internationally, there were lots of climate tech funds. Locally funds were more generalist.

So, we decided to focus exclusively on climate tech and have built an expert team of scientists, climate experts and subject matter experts in impact investment to help us execute.

Talking about specific investments, which climate technologies, start-ups, or verticals are you most excited about? Where is the CVCF placing its bets?

We are looking for solutions that have the most significant impact on climate change.

One of those is renewable energy storage which will play a considerable role in decarbonising the globe. CVCF has invested in MGA Thermal, which makes blocks that store and deliver thermal energy while remaining outwardly solid. They are the missing piece of grid decarbonisation, turning renewable energy into clean steam and power that's available any time of the day.

It's easy for us to get excited about climate-smart agriculture, given that most of New Zealand's emissions come from our agriculture sector. We love new innovative ways of farming that reduce emissions, maintain healthy soils, conserve water and enhance the resilience of our agricultural systems to climate change impacts, such as the flooding we saw recently in NZ.?

Leaft Foods and 26 Seasons are two great examples of start-ups in this sector.

So, tell us, what does a day in your life look like, and what do you think your role as a VC is in accelerating the world's climate investments?

Venture capital plays a significant role in investing at the earliest and riskier part of developing cleantech technologies where most other funding options don't want to play.

We also play a critical role in providing patient capital with a deep understanding of building and scaling these businesses.

A day in the life of a VC spans meeting founders, reviewing pitch decks, a lot of due diligence on technology and climate change and a considerable amount of time working with the companies to support their journey. It's super tough to be a founder, and we always consider ways to add value, especially in the early stages.

How does the fund evaluate potential investments? What criteria do you use to determine which companies are a good fit for your portfolio?

We start with the emissions aspect. We're looking for a proposition that will probably and measurably reduce emissions at a reasonable scale.

This can be in any emissions category or industry, so it's a wide brief. If we can see how it's a great proposition on the climate front, we then commence due diligence looking into the founders and their team, their commercial model, the industry environment, risks and opportunities, and of course, the terms of proposed investment.

What does it take for a VC firm to become the top choice for climate tech entrepreneurs? How do you work with portfolio companies to help them achieve their potential and reach their milestones?

We work with our portfolio companies in many different ways, but our expertise in emissions impact measurement and climate policy/?regulation has proved?helpful to them so far.?

Lastly, what books are you reading or podcasts do you follow at the moment that inspires you and fuels your interest in climate or energy tech?

There are so many inspiring materials out there for those who are interested in the climate response. Getting texts out from the library is an excellent low-carbon way to do your reading. I also listen to podcasts like The Carbon Copy, Bloomberg's Zero, and New Zealand's "This Climate Business".

Well, Nadine and Rohan, it was such a privilege talking to you, and we look forward to seeing how the Climate Fund goes from strength to strength —wishing you all the best!