Scaling the Circular Economy: Inside a $200M Non-SaaS Fund w/ Costas Papaikonomou

I guess Nutella, everyone loves it. Like in the, in the 80s everyone knew it's 30% sugar, it makes you really fat and it's bad for your teeth. People keep eating it because they love it. Now wind forward to 2018. Suddenly people realize the other 2/3, half of that is palm oil. Every time I take like a sandwich with this chocolate, that's another orangutan going homeless. Do they stop eating it? No. So what does that tell you? What that tells you is if you are looking for, I guess, Nutella to become more sustainable, they will only switch if it makes commercial sense.

Welcome to the venture capital podcast. Today we are joined by Costas. He is an innovation veteran that has an early growth fund called Unaterra. So it's the Unaterra early growth fund. That's a $200 million fund and they've just completed their first close. He's also a famous author. He wrote a book called the Disruption Fallacy. And so today we are going to talk about sustainability investments, also investments in non SaaS startups and his background. So before we begin, as we kick it off, do you want to talk about your background real fast so the audience can get to know you better, who you are and what you're about?

Thank you. So very happy to hear to be here and thank you for the invitation. As you will hear, I have a funny accent. That's because I'm actually Dutch, live in the Netherlands in The Hague. I'm 52 years old, two adult sons and I have, well, basically co founded Unaterra as my third career. My first career was as an engineer building products, machines and manufacturing, say, setups. Second career as one of the founders of an innovation consulting business called happn, which we grew to a global agency and sold to Accenture in 2019. And sort of since then, with time on my hands and a little bit of cash in my pocket, co founded Unaterra, which I guess, well, for me a lot of my, my, let's say DNA from my innovation history has landed in this VC setup in the way we look at startups, scale ups and how we think we can succeed.

Awesome. Well, what is the thesis for your fund? Can we start there? Yeah, it's a fairly unique thesis. I feel like you're not chasing Silicon Valley startups or Silicon Valley wannabes.

Yeah. And let's agree for this podcast that every time someone says the word AI, they put like a dollar somewhere in the sort of the swear. Is it different? I don't know. It's the first Time I've set up a fund and I'm new to the VC space. The thesis is basically circular economy and anything that helps make the existing economy, the existing supply chains, existing material streams more circular. And I guess you can do that in different ways. You can look for new, let's say raw materials businesses creating new chemistry, new materials that are more circular than the originals. They're replacing the uglier versions that are maybe less easy to recycle or use more energy or leave more waste. You could also look at, I guess, what you would call catalysts. So those are maybe forms of chemistry or smart software that can actually make existing streams just more circular without actually participating in the process itself. And there's probably a whole bunch of end user products out there for consumers or B2B which are just easier to recycle after use. And I guess across those three buckets we look mainly for series A, I guess as a sweet spot. So no more pivoting on technology and a clear view on who the customers really are. Ideally a few customers already generating revenue at like a fair market price. And I guess with. Well, like myself, my fellow founders, we all have industrial backgrounds coming from consumer goods industries and production industries. Yeah. We try to also help them with putting them in front of actual buyers of whatever they create. And that's worked well so far. Yeah, that's I guess, the thesis in a nutshell. I mean, you have to stop me every now and then because I can talk for hours about what we do. It's quite fun.

Have you deployed any capital yet into deals?

Not only that, we've actually already done our first exit.

Oh, congrats.

Yeah. Which is a little bit bizarre before your first close. But that's thanks to some very, very generous early LPs coming and putting quite a lot of our own money in as well. So we've deployed capital into three business, well, actually more, but three that are really connected to the fund. We can talk about them in the podcast, I guess. One is a business doing, let's say a paper replacement for plastic bottles. Makes that special as it can run on a normal filling line. We exited that actually after about a year, made the money to then invest in some of the other businesses we were looking at. And two of those are. One is Grey Parrot, which is. I'm going to use the swear wor, but it's basically an AI based business. But it was before it was cool. It was before it was cool. Using AI to improve waste processing and basically help dissect the different types of plastic passing in a waste sorting facility. And the third one is another tomorrow, which is a fashion business example of a typical sort of sexy end user organization or business. And they have a pretty incredible supply chain. Literally when they make textile for their garments, they sequester carbon. And I guess what they've managed to create is a fantastic brand which you would just want to buy even if you didn't know anything sustainable about it. So yeah, that's a very long answer to your question. Sorry Peter. But yes, we have deployed, we have an interesting pipeline looking forward, more on the, say, raw materials end, where indeed ugly chemistry is being replaced by something which is cleaner or as a cleaner source. And yeah, there's, I mean, once you know what to look for, you realize there are more opportunities out there than. Because it can be a little bit overwhelming. I mean, if you would just, I guess dive into Pitchbook, which we don't do very often, and type in, I don't know, sustainability or impact or even circular. You just. There's just a tsunami of stuff coming your way. And it's very hard to sort of, at least for us initially, it was just hard to figure how do we know what's really going to make the difference? And I guess infrastructure is the magic word. Is it using existing infrastructure or is it trying to build new stuff, new infrastructure? And the latter is a big part.

Of your thesis is to scale by plugging into an existing infrastructure.

Correct, Correct.

So it's not just we're making an investment, it's we're making an investment and we know how to like plug this into this, you know, an outlet and we know what the outlet looks like. It's a repeatable process.

Yeah, the magic word is drop in, which is not new by any stretch of the imagination. But if you're making a packaging material and you're claiming that it's going to make the whole packaging it lands into, more sustainable, easier to recycle or compostable or whatever, then you're not going to get very far if that material doesn't run on existing packaging equipment. I mean, if you would even go to like a, actually to any significant player, let's say a PepsiCo or something, and you offer them this solution which cannot run on any of the say billions worth of machines they have, they're just not going to continue that conversation that will end. On the other hand, if you have something they can just trial easily with maybe minor modifications, then not only have you got your pilot, you actually have a customer who can then scale Internally, quickly. And I mean it's really not rocket science. But I guess if you have an academic starting point which is all about finding the perfect material that will do perfectly what your dream is all about, then you might end up with stuff that is incompatible with established industries. And we try to play the could say the slightly more street smart version of hey, you're now buying this powder, Buy this powder instead. Costs the same, performs better and it's a hell of a lot cleaner.

But you wouldn't consider yourself an impact fund. Right. The fund where Peter came from turned it into an impact fund.

Right, Peter?

For those of you who don't know Peter's background. Well, I think your impact. But you're focusing for a real business model first and then impact second. Or is impact a significant part of your thesis?

Yes, because even, I mean we set ourselves some pretty staggering goals on let's say CO2 emissions and reducing plastic going into the environment, which in a way from the pure circularity point you can very easily connect to, let's say reducing the amount of energy required for the product or the amount of waste leftover and our carry is connected to it. So I would very much sure say that we're impact focused. I think what is the, maybe a little different is if we consider propositions or if we consider, let's say businesses to invest in, I mean if we don't think they can survive in the real world, I mean that's really the first consideration. Will these survive and are they scalable in the world we know? I mean how it works, it's a bit of the handicap. I mean if you're my age, I mean, I'm gen X, I'm 52, I can't handle the idea of whole new infrastructure and neither can my, say, my fellow founders because we know how much is already out there and how poorly it performs from a sustainability point of view. So in a way the wins are right there. And if you can create like a billion pieces of packaging that are like 1% better than the original, that's a hell of a lot better than saying you can do a couple million which are 20% better. So the numbers just add up so quickly in these huge markets, these big, let's say these big production setups, that's kind of where we focus.

I really love your approach because I feel like I look at a lot of businesses in the sustainability space that to your point, they're, they're 20% better, they're 50, they're a hundred percent better, they're 200% better, but they don't fit within the current supply chain. And I always am thinking to myself like, yes, but how do you actually get this to market in a way that's meaningful? And so yeah, I like that approach of like, hey, look, it can just be 1% better, but if we can plug it in and deploy it a billion times, that ends up having incredible impact.

Yeah, I mean I spent 12, 13 years doing nothing. But innovation in supermarket goods mean very often. I guess the world looks at startups and scale ups as wow, that must be so hard. Try inventing a new toothpaste or a new laundry detergent or a new cough syrup. I mean, trust me, that's a hell of a lot more difficult because it's an established, commoditized industry or market. The only thing you're trying to do is just do as little change as possible because otherwise it just won't work. But just enough to get people to switch to your product. And that's the mechanic we're looking for. Just how do you make it just good enough that people will switch? And here I guess the other harsh truth which we haven't learned ourselves, that's just by looking at what succeeds and what doesn't, is why impact Second? Well, because people will not switch just because it's greener or more sustainable. They have to see at least a very strong emotional benefit. And if it's a B2B solution, the switch is going to have to be paid by switching to that alternative. So by definition it needs to be cheaper and better performing or value adding. So the green element, of course, I mean if it's not, I mean we're an Article 9 fund, which means it has to be not just say improving sustainability somewhere else in the supply chain. The product itself needs to be the improvement in the simplest terms. So that's I guess just the challenge you have then. Am I making sense? Right, yeah.

Hello.

I'm curious, during your time working, you know, in innovation and in supermarkets and supply chains, what are like some of the key learnings that maybe were non obvious that are informing how you invest today?

Well, I guess the first truth that hits you is everyone's trying to change as little as possible, as I just said, because change is hard when you have huge numbers of products coming out of factories and change is expensive. If you look at a good innovation strategy for a big brand or a big business, it therefore really does, I guess, three things in its ideal form. And for most it only does two things actually say they spend most of their time and resources, from R and D through to marketing and sales. Just making small improvements, small improvements to keep the retailers excited, to keep their whole supplier chain, supply chain excited and optimize it. And small changes to maybe make a consumer more excited as well. That's like 60, 70% of the resource goes there. Then there's a much smaller bit, let's say half of that, another 30% only that goes into more dramatic innovations to win new customers into whatever franchise they have, which is super difficult because you need to have really good insight and understanding of the new market. And you need to be confident that you can actually create a product you can make money on in that space. And then only a fraction, if anything, is spent on what I would call disruption, which is. And then very often it's done in a very peculiar way because they're going to then try and disrupt their own market. Like, you won't believe the number of briefs you receive when you're an agency saying, hey, help us disrupt toothpaste. And they operate in toothpaste. Well, I think that would be a very bad idea because this is what pays your salaries. Maybe with your toothpaste technology you can disrupt another category that is similar. I don't know, maybe it's car care and polishing, say metallic paint. I don't know. It's. So I guess to go back to your question, it is a. The innovation in consumer goods on retail shelves is all about being very cautious with your resources, not spending too much on the wrong thing and just making sure you have just enough new news to share to remain attractive and to attract a few new customers or new consumers. And I think that is going to be true whether you have a sustainability led proposition going to market or not. The example I tend to use literally on screen when I try to show this to audiences is using Nutella, very European product. You're probably aware of it in the US it's chocolate spread, tastes amazing, almond based. Everyone loves it. Now just think about the following. I mean, even when I was young, like in the, in the 80s, 70s and 80s, everyone knew it's 30% sugar, it makes you really fat and it's bad for your teeth. People keep eating it because they love it. Now wind forward to 2018. Suddenly people realize, holy shit, the other 2/3, half of that is palm oil. Every time I take like a sandwich with this chocolate, that's another orangutan going homeless somewhere in Indonesia. Do they stop eating it? No, they'll just continue eating it. Do they care about the fact that it's bad for the environment. Yeah, the very few people who do, they switched eons ago. They're not your customer anymore if you're Nutella. So what does that tell you? What that tells you is if you are looking for, I guess, Nutella to become more sustainable, it has to be led by initiative by the Ferrero company who own it. It's not going to be because their market suddenly evaporates because it's not sustainable enough. And they will only switch if it makes commercial sense. Now, where again, what it also tells you is, but probably isn't worthwhile is saying, hey, we now have a lid on our jar which is made out of ocean plastic that probably doesn't work because no one sees that as an issue with this product. What might help is say, hey, we're now sourcing more sustainable palm oil. It's still palm oil. Or we now have a synthetic version of palm oil which tastes even more amazing or doesn't have the calories. So you have to start folding in additional benefits that are in line with what the product is trying to deliver. And sustainability is not the core benefit any product is trying to deliver, maybe apart from a very, very few brands who have built their whole being around it. So again, trying to make the world more circular is in principle led by the organization trying to become more circular, not by their customer. But I guess the good thing is if you say wind back a little and you realize, okay, the product actually needs to be better. What does a more, better circular product mean? Probably means it uses less energy and less material and because it's better performing, you're at least charging the same price for it. Now that actually gives you two interesting sort of things in one, less energy, less material means better for planet. But if you'd use less energy, less cost, less material, less cost and you keep the price point the same, then you actually have a commercial proposition at the same time. So it kind of works. It's just, it's almost like the sweet spot does become very, very small on what our propositions that are going to be able to deliver against this. See how I still haven't spoken about AI, by the way.

Yeah. There's so many opportunities outside of AI, despite the fact that it seems to be sucking all the attention and many capital out of the room. Right?

Yeah, but even just, I mean, consider how you, how where you are now are, you're sitting behind a laptop, at a desk, on a chair in a room, all the stuff around you, literally every molecule around you has been placed there not just by yourself, but it's been created on a machine in a factory somewhere. If it has a color, that color has also been put on somewhere by a machine somewhere in a factory. All these things need to be made. This whole, I mean the whole world basically is a bazillion times larger than whatever is the thing that is sucking all the energy which is everything digital. And all those spaces have very interesting, let's say, areas to play when it becomes comes to making them more circular and in a way making them I guess at the same time through that more efficient. So basically you're making money and more desirable, effectively growing your market.

Okay, what are the, the, the maybe the top two or three industries you're tracking right now or opportunities or just maybe areas.

Yeah, packaging is the, is definitely the, well, I won't say the easiest because nothing is particularly easy, but there is a lot happening there and it is driven here in Europe of course, where we operate and mainly focused by just really, really tough regulation coming through. Now of course, the regulation which has now hit in particular on single use packaging and recyclability and the use of recycled material in new packaging, it's all still relatively new, which means everyone's still figuring out how is this really going to work. To give you an examp, most packaging, particular plastic packaging now needs to have 30% recycled material inside. Well, there's not enough recycled material out there to do that. So that creates all kinds of problems. Also if you are a business that does food in packaging, where packaging touches the food, you're not allowed to do the recycled material. But you'll still be judged on whether or not you have 30% recycled material on average in your packaging. Which means these organizations now need to find ways of packaging non food next to their food. So there's all kinds of sort of bizarre consequences of these new sort of rules coming through. But everyone's looking for solutions and I think that's, that's good. And of course then the best solutions come when there is say strong science backed by also understanding what the reality is on the ground in some of these factories. Because just imagine if you are doing like, let's say you're packaging Snickers bars and you're doing square kilometers of foil in packaging every month because of the numbers. Just give you a sense. There's a factory here in the Netherlands where I live, we do 27 million Mars and Snickers bars every day. So the volumes are absolutely mind boggling. If they would change the foil from like let's say 10 micron to 12 micron, everything would jam. So just imagine coming along and saying, hey, we have this recyclable stuff which, yeah, just gotten used. I mean these are just massive, massive environments of huge volumes. So again, I guess as you paraphrased before John, small, small changes, just a little more effective and a little more sort of recyclable, circular, a little less energy. It all makes huge impact because of the numbers.

I think I was paraphrasing you, not you paraphrasing me.

Yeah, you were paraphrasing me back, I guess. Yeah, you're right. Whoever said it, I think it's true.

Okay, so packaging is your biggest.

Yeah, so and then there is, let's say food ingredients is fascinating because they tend to be high value. And food waste is also just a tremendous topic to basically score on a lot of money you can save even if you just imagine because one of the businesses we're looking at, I'm actually already on the board of, is a packaging company doing ready made meals. Just imagine food waste in ready made meals environments. I mean that's not like you lose some corn or wheat during the harvest. That stuff has been harvested, it's being cut into pieces, it's being cooked. I mean all the energy and effort gone into it. If it then turns into waste, that's pretty dramatic. Not just, again from a, let's say, better for planet point of view, but definitely from a commercial point of view as well. So solutions there and then there are, you could say also things we're looking at from a, let's say waste management point of view. So things that make the whole processing of waste more easy. One of the investments which I mentioned before, Gray Parrot is a great example of that. But for example, if you look at bio waste or food waste or any, let's say organic waste, ways to get all the moisture out, for example, to make it much easier to transport and much easier to process further down the line will all, I guess there's all spaces where there's just a lot of activity. And again a lot of that activity in Europe is driven by regulation, which is great because that's sort of like it introduces a level playing field for everyone and you just know solutions have to be found. Well again, because it's all coming in and it's relatively new. What you do still see is in a way, it's a sinister, I guess effect. Like I mean literally a CFO in a packaging company saying, okay, just remind me how many fines are we paying this this year? Oh, that's nowhere near what it costs to put a new machine in. We'll do this for another four or five years. And I guess that of course that exists, but it is a transition which is happening. It's a good transition and in the end it is for the better because the only ones that will survive this are the ones who actually are doing better, creating better solutions than the originals. But now doing it in a much more, let's say, environmentally friendly way.

Makes sense. I'm more of a SaaS founder, but I'm curious by all your comments around Waze because when the first business book I read focused on building non sexy businesses and it used the example of recycling bottle caps.

Yeah.

And they said, you know, if you're, if you're at a, if you create that business, people aren't going to wake up every morning and think of, hey, I want to compete with you. How do I, how to recycle bottle caps better. And outside the SaaS space. I just, I think about that space fairly frequently. I haven't done anything in that space.

Yeah.

But like, anyways, that's like advice I got growing up. My friend's dad was an entrepreneur and he had a recycling facility, which I think is a generous term for what it was. It was more like a landfill, but like a junkyard. Yeah, it was like kind of a junkyard. But he actually did very well financially. And his comment, and he's like, do this that nobody else wants to do. As in, yeah, there's just, there's just opportunities in these supply chains and, and things that people are not thinking about or that's not exciting or sexy but ends up having a huge impact. We also made an investment recently in a company that builds, that builds sales tools for industrial companies. And his point, which I think is another one that kind of ties in with a lot of what we're talking about. The founder there was like all of Silicon Valley sits around building tools to sell to themselves, which is a relatively small market. And he's like, we're building tools for the other like 80% of the economy, you know, or that just doesn't get the time and attention, but is massive. Right. I mean you look at these industrial, like a, a small waste management company or is in the hundreds of millions of revenue. Right.

It's huge.

So the scale is just like crazy.

And I mean the, it was actually personally, it was a fascinating period after because we, when I sold or we sold our agency, we sold it to Accenture, which Of course, is huge sort of automation and digital transformation business. And if you looked at their client list, I mean, then their industrial client list, there will be, there were like hundreds of companies you would never ever have heard of like shipping stuff around. And these would like be like $50 billion companies, $100 billion companies, and you would have literally never heard of them. And you touch their products every day and they are just as great or dysfunctional as any other business you do know. And when a big business is dysfunctional, then there is a lot of stuff to do to help it improve. I think waste is, I mean, or actually let's say the reuse of waste and being more prudent with materials, maybe that's another way of saying the same thing. I do think it's going to be not just like a growing market in a general term, but I think the geopolitical situation right now is hinting that we are basically going to a less globally integrated world. You could even say US and Europe are pulling apart from each other a little. Definitely US and Eastern countries are pulling apart from each other. The Europe, same thing, stuck in the middle. What that means is long supply chains are going to have to be shortened. And if we are going to be enjoying the same levels of comfort and luxury here in Europe for sure, then we need to reuse a lot because we won't be able to ship everything across from China in the volumes we're used to and again, reuse and leaner product designs and the technologies that enable that, it's worth something. I mean, if you draw that to a logical conclusion. And this is just inspired by what we've seen Grey Parrot being able to do in sort of analyzing waste. Just imagine if you could effectively consider all the old landfills, almost like mines. You just start digging them up again. Hey, we know there's a 50 kiloton of PET under the ground here. Just dig it up and we recycle. It saves us a lot of oil to get out of the ground. And we're not there yet, of course, and it's not this urgent yet, but there's a non zero chance it will definitely within my lifetime and definitely yours. That's, I guess what some of this is just hinting to. And then it becomes a necessity, not a, not purely a regulatory driven, let's say, opportunity.

Where are you seeing the exits or where do you anticipate exiting your, your portfolio of companies? Because I think the, the contrarian view that you have is let's not build the companies that need to Become unicorns and disrupt the world. But those are typically the ones that are going public. And you know, and so I'm curious, where, where do you see the exits?

Yeah, probably, yeah. It's a difficult question to answer, but more indeed in acquisitions towards the end. Yeah. Sell them into larger organizations and because also you could make a case. It is the case so far and definitely the case with the businesses in our pipeline. They are all examples of, let's say, specialist players or niche players in very sort of commoditized existing industries. So there will always be a giant around to acquire them and absorb them and use their tech to basically put in their own, let's say, portfolio of products or services. So I have yet to see one where I think, wow, that's going to be an amazing standalone one. No, it's just not what I see. I mean, it could happen, of course. And yes, would be great if one goes 100x or whatever x makes a unicorn nowadays. A billion dollar valuation is, I think one of the characteristics. But is that an answer to your question? Okay, Peter, I don't see the unicorn exits and I guess also as a potential investor in our fund, that's not what you would be looking for. That would just, would be. But I guess what you would be looking for is on average a way lower risk profile. There is. Yeah. Because again, we're, we're just literally like building cartridges to plug into existing entity industry. So.

Yeah.

Easier to get ahead of.

Do you see that these companies are like faster to market and faster to scale because they don't have to build their own infrastructure?

Yeah, definitely. There is maybe one particular step which I have no idea how that compares to, let's say SAS or any sort of specific digital type of growth path, but especially in, let's say, processes that require fermentation or some kind of, say some magic happening in a vat. What you do see there is the yields and the efficiencies are just dramatically different depending on the scale of the VAT you build, let's put it that way. That's simple. And there's definitely an optimum. So something might work great at like 100 kilos and then still be fantastic at 1000 kilos and then it's terrible at 5000 kilos for no real reason other than it's an organic process of some kind of. That's probably, from what we've seen so far, the typical sort of uncertainty on how easily it will scale. There's a reason, for example, breweries have lots of big tanks and not one single big tank or a single huge tank. So back to your question. Yes, I would expect and so it's what we've seen with the first one with Pulp X and it's definitely what we're also seeing with Gray Parrot and now another tomorrow is they have something which is easy to buy. That's the whole trick. It's easy to make and easy to buy. You can get straight to the point of do I like what it does? Does it do what it promises? And there's no real big question on will we be ever be able to get it in the volume we need it in? Because that's already been tackled by the existing infrastructure you leverage. What would maybe be an interesting question back with all your experience in VC is is that interesting enough for the average. Let's say, well probably not for the unicorn hunter because they would be looking for the whole package is my assumption. They say, well what do you mean you don't build a factory. How are we going to make our 100x then if we don't also sell factories? I mean that's what I'm sort of imagining the logic to be. It's. I don't know. What do you think?

Yeah, I mean I think it's the bet, right. Is that if we're not going to play the power law that we have to play normal distribution law and that you're able to get more consistent. Maybe you're not getting a thousand X returns but you're consistently getting a return on the vast majority of your portfolio. And that would make sense because your time to market and integrating and everything else is so much faster and lower risk.

Yeah.

Than these other companies. And so like if I were like an investor thinking about your fund that that would be like the big hypothesis I'd have to buy into is that yeah, I may be giving up power law driven, you know, one or two deals drives the fund economics to. This is a little bit more like a private equity play.

Definitely.

Yeah. Lower returns per deal but lower losses as well across, across the portfolio which yeah. Honestly I think I don't, I think there is a little bit of a fallacy in venture that it has to be power law. I think it is true in certain circumstances depending on how you've structured your fund. But I also think that there are opportunities to back really good companies that don't. They're not going to become, you know, multi billion dollar outcomes. And what's interesting is that it's, it feels like in a lot of ways venture there There are these incentives in venture to raise bigger funds because you get paid more management fee and you make a lot more money in carry if you have a successful fund. Right. Because you're getting 20% of the profits. So if you, you 3x a billion dollars, that's $2 billion of profits, you're going to take $400 million out of that in carry versus if you have $100 million fund and you 3x that, you know you're taking $40 million home. So, so even like if ignoring the management fee discussion, like there are these incentives to build larger and larger funds. And I think what that's done is it's created this paradigm where it's like, well, now I manage this huge pool of capital I need to invest in companies where my winners can return a billion dollars back to the fund, which if I end up owning like 10% of these companies at time of exit after dilution, that means I have to invest in companies that have the potential to be worth $10 billion, which is a huge number and a huge valuation. And so it's almost like power law kind of created this vicious cycle where funds raise bigger funds and then they have to push higher for bigger outcomes, which forces them to raise more money to support those potential outcomes. And that's where we are today. But I think it leaves out of the entire discussion a lot of the businesses that you're looking at that I imagine if a company got to a hundred million dollar, you know, acquisition, that would be a huge win for you guys.

That would be huge.

And that would be a massive loss for the vast majority of venture funds today.

Yeah. Which is, which is strange if you think about it. At least I found that. So again, because I'm not from this industry, I find that really peculiar. But I love your, your how you describe sort of the, I guess the internal logic. I'm gonna have to replay that on the podcast for myself just to sort of train myself. And this is how VCs think and see if it rubs off.

Well, hopefully not too much because. Right. It's all about having a contrarian view.

True, true. That is true. Yeah. Yeah.

I'm curious, are you aware of Epigee and it was acquired by David's protein bars at all in that scenario?

It rings a bell. But help me.

Yeah. So David was a customer of a company called Epigee. It's a EPG plant based fat alternative. And my understanding is that there's multiple companies that use the patented technology. And David came through and bought, bought the company and shut everyone else down, or my understanding is they shut them down. But part of my curiosity is, I mean, it's that one of the places you're. What you would, you would be potentially playing in food tack.

Yeah.

You're looking for probably more than like Peter is looking for, like good defensibility, good patents.

Yes. Yeah.

Part of what happened, just add some context there.

How do you shut everyone down? How do you do that?

He bought the company that had this patented formula, formula and then he, he cut off access. So this was the founder who made RX bars, if you're familiar with that brand.

Yeah, I'm familiar with those.

Had a successful exit. He owned most of the business from what I understood. So, you know, very, very much independently wealthy and started a new brand called, called Dave's or David as a protein bar. And he bought this other company and then he cut off access to that formula to all of these other protein bars and, and basically cornered the market on, on this, this ingredient for his protein bar. And it's caused a lot of waves and a lot of consequences.

I can imagine.

Yeah, probably imagine in the industry.

Yeah, it's actually, I've not heard a case like that because I'm aware of some, let's say. Well, here's an example. There's a lot of protective patenting happening. It's basically just to prevent a competitor doing something which would kill your business and you would also never launch it yourself because you would kill your own business at the same time. But this is, I guess, quite an interesting example of someone actually putting that to action. That's so. Sounds like quite a dark motive, though, if you describe it that way. I'm not sure that would, I would, I would necessarily agree with it, let's put it that way.

Yeah, I don't know if I agreed with it. I don't know if it's good or bad, but I feel like as we're all kind of chasing sustainability and healthy alternatives to, to lock out someone else was a fairly aggressive.

I guess it reminds me of something else. You might remember this probably about seven, eight years ago, Nike and I would say Adidas. You maybe say Adidas, I don't know how do you pronounce it in the US but they took each other to court over the. Basically over the. Let's call it the copyright. Probably some patent of the woven shoe which was easier to disassemble was basically the better for Planet Shoe. Now you would think if you have the better for Planet Shu, you would want that to be as broadly used as possible. No, they were taking each other to court for the sole right to sell it. Again, if you take that to a dark extreme, imagine someone invents nuclear fusion tomorrow called nuclear fusion and then indeed patents the whole thing shut and says now no one's ever going to get it because I'm going to sell oil instead. That's what that's. You could say same example or same sort of logic. And I wonder we will see those cases probably on a very dramatic level and I think the ones who. There are businesses who fight that. To give you one example you might know. Have you ever heard of a business called Bari Callabout? You probably haven't, but you probably eat their products almost on a daily basis because they are by far the largest chocolate manufacturer manufacturer in the world. They basically, what's the word, dissected the genome of a cocoa bean knowing that someone would be doing it somewhere anyway and they made it public. They basically prevented any option for anyone else to take any patent on part of the genome. Which is happening of course in all kinds of food products, particularly the genetically modified ones. And this is a mostly family owned business who just say guys, we're not going to have this industry destroyed by some dark, sinister evil technician. We're going to make sure it's open, remains open source in a way. And I guess that fits sort of the, I guess sustainability in its broadest possible terms.

Got it. Maybe as a, as a last question, I mean I don't know where you're at for time of the deals you're investing in. How many of them are larger companies bringing you in and saying hey, help us put this deal together. Here's a startup we like, we like their technology.

So far not yet because we've been lead investor on two of the three so far and we're looking to be lead on at least half of the ones coming in. But there hasn't been that. I'm aware, I mean CVC I guess if that's what you're referring to like corporate venturing team saying hey help us out on this one. Actually one of actually Pulp X was an example of that was pushed our way by a corporate venturing arm. But literally just saying this is nowhere near the size we need it to be yet. Maybe it's interesting for you but not to collaborate on it yet. That's. But I can very well imagine it will happen because also one of the deals we're looking to follow on is actually led by a large corporate. It's just they have their ducks in a row and are just looking for, let's say, topical experts. So that's a yes and no answer to your question, John.

I think it's a beautiful answer. I think you did a good job.

Thank you.

Awesome. What's the best way for the audience to follow you and learn more about. About you?

Well, we're pretty. All partners in the fund are pretty active on LinkedIn. It's a very simple place to start. And definitely look out for us at, let's say, impact and sustainability oriented conferences in Europe. Definitely. We're trying to go to. Well, I won't say all of them because there are very, very many of them, but probably the. Yeah, the LinkedIn page is the best place to start.

Awesome. Well, we'll also include the links below in case you're listening to us on podcast or watching on YouTube. And we're very appreciative of your time. You're an absolute powerhouse and a very. A very genuine human.

Well, thank you. Thank you very much. I think that really enjoyed. Yeah.

I fly through Amsterdam. Off to take you to lunch?

No, you will be my guest in the Hague, which is 45 minutes south and a much nicer town to be in because the Hague is pure hedonism. That's where people go to do what their mother forbade. The Hague is where the sort of. The nice people come.

Okay. Well, yeah, I mean, like, because I fly. Well, I fly through either Paris de Gaulle or Amsterdam. Oh, man.

Don't go through the goal. That's like the airport on the planet.

It is. I do prefer the Amsterdam airport much more the connecting flight. I don't have to go through miles and of.

Have you ever gotten lost in 2F, Terminal 2F and then landed outside in the parking lot? Because that's what happens at Charles de Gaulle.

Never been lost yet. That's true.

Charles de Gala is the worst.

Yeah.

All right, well, thank you for your.

Time and thank you.

We're excited to see how your. How your fund continues to. To grow.

Thank you very much, guys. Thank you.