E560 | Will Wells, Speedinvest⁠: Deep Tech, Sovereignty, and Joining Speedinvest

0:00Europe's next unicorns won't be trapped in a single sector. They're not pigeonholed by their sector. They're thinking it's extremely big in terms of gov, plus health, plus defense, plus AI, plus robotics. But there's a trillion dollar problem standing in their way. If they're going to need a billion dollars to win, where are they going to get their Series B and Series C capital? Will Wells, former founder turned deep tech partner at Speedinvest, has a framework for navigating this complexity. One thing I learned from Ravir Lightspeed, he always talked about inevitable truths. His test for billion-dollar deep tech, radical simplicity.

0:34If you can't describe the product to your generalist colleagues, it's probably not worth investing. Either you haven't understood it or the founder that you spoke to hasn't described it well either. But for Will, this isn't just about returns. It's about defending what matters most. I'm passionate about defending Western democracy and freedom is not free. The mission that drives everything he does. For me, that's the heart of deep tech, and that's what gets me out of bed in the morning. Discover the inevitable truths shaping Europe's deep tech future and why the next wave of founders will transcend every boundary we know.

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2:55Tear down this wall. It's more than just an alliance. This is a union of values. Let's start acting. This show is not investment advice, and the hosts of this episode may be invested in the funds and companies featured. Today, I am incredibly thrilled to welcome Will Wells, an operator turned VC and now stepping in as the deep tech partner at Speedinvest. Will is also formerly the founding CEO behind Hummingbird Technologies, an AI-powered space-based regenerative agriculture startup that exited to a green in 2022, and since then has become a seasoned deep tech investor leading frontier tech with famed firms like First Mint and Lightspeed.

3:40Will, welcome to the podcast. Thank you for having me. So Speed Invest is a house that is a very good friend of the EUVC podcast. So tell me a bit about joining Speed Invest. Well, I can't wait. I joined officially on 1st of September. So I've been enjoying a bit of gardening leave. And I'm very humbled and honored to take over from Rick, who's leaving as the deep tech partners, an old friend of mine, and can't wait to lead that team at Seed and also to help Oliver build out the growth investing function. But look, it's a cracking firm and brand and there's some super bright people there. And I am just so excited about the deep tech opportunity set in Europe over the next few years.

4:30So I think I've gone to a good home. So let's get into it. I first want to ask you about the experience building Hamburg, of course, racing Series A and scaling and ultimately exiting. Could you tell me a bit about how that has shaped your way to now be a partner and supporting founders as a VC? look i mean i it was 10 years ago when i started hummingbird and yeah we built a very early uh autonomous system and ai stack for it kind of is actually an ag tech company so we were using drones and robots to help farmers see disease in their crops it was trying to lower chemical usage we then pivoted to satellites and you know i went through a lot of the technical stack that is kind of permeated my whole space now whether it's robotics or compute or defense so there's there's some nice firsthand technical stuff in there I think it's really the empathy you know I made all the mistakes that you could possibly make as a first-time founder I did some bad hires had some moments of bad management and made a ton of product errors and I can definitely look founders in the eye and sort of say that I've been there, you know, and I've raised a series A and, you know, we got to sort of 60, 70 people before we exited.

5:44But I think it really helps to have been in the engine room. Yeah, absolutely. Tell me a bit about your journey as an investor with other firms. Yeah, well, I sold Hummingbird in 2021, 22, and it was really a soft landing. We were saved by a Danish company you'll be glad to know a greener and you know I was doing some angel investing and first minute who are just wonderful people said do you want to come and you know lead deep tech and I sort of never looked back and you know four very happy years there there and at Lightspeed and sort of learned from the best you know I'm very privileged at Lightspeed to be part of the same team that had backed andriel and spacex and all of these generational companies so i sort of i really really learned what good looked like i had previously been an investor i ran a hedge fund but this was a sort of like post founder amazing journey in venture and got the opportunity to do some some awesome deals across the deep tech stack so i'm i'm forever grateful to to those you know gps of those funds for giving me a shot to lead again then tell me will because everyone comes with a with a thesis and a thought and a view on the market i know one of the places where you think there's most opportunity is between the buckets so to say so deep tech is not just one vertical but rather it's putting together ai hardware the fusion of science strategy and sovereignty so i think that europe europe is behind the us but it's also younger so if you look at things like novel ai you've got companies like wave amazing autonomous driving business the first minute actually backed and then in space you've got the exploration company and you've got helsing and defense and various others in quantum etc i think where the us have just absolutely smashed it out of the park is companies like palantir and Tesla and SpaceX that really transcend the buckets.

7:54They're not pigeonholed by their sector. They're thinking extremely big in terms of gov plus health plus defense plus AI plus robotics. And I think that's deep within their talent stack as well. You meet engineers there. They're sort of engineers at Tesla have been doing like LIDAR for 12 years and they're thinking about so many use cases. And I think we're going to see a really exciting moment in a few years time in Europe where all of these ecosystems, whether it's, you know, the Northvolt graph graph core ones that didn't quite make it all the Helsing sort of Spotify type ones that have made it.

8:37Those guys are all going to start businesses. And, you know, we've seen the lovables and then it ends. And I think those second time DNA folks with the ability to think really big are going to create the companies of the next 25 years. That's my prediction. Tell me a bit about, because that's, I actually think maybe a bit counterintuitive to the deep tech space. Because at least in deep tech, you often see the companies come out of the more research heavy areas and not necessarily have exited founders or successful company builders with them from the get go. So talk a bit about that. I'll take a recent example.

9:21So if you look at the sort of CDTM, ETH ecosystems, you've got some just insane technical talent, right? Think about Proxima Fusion or Black Forest Labs. Now, you still need to raise a lot of money. In fact, you need to raise even more money for deep tech than you do in other areas. And I think it's about having both skill sets on the bench. So for every imagery, vision, PhD, building and robotics, you slightly need a sort of killer fundraiser alongside them. Or they need to be both. I think that's a sort of duopoly skill set that Europe is still getting used to. But, you know, again, it's super exciting.

10:09I have a question, which I don't know how you'll react to. Some people think that we in Europe are lacking big bets from the get-go. And you just described some that have truly had big bets like Proxima Fusion, which from the get-go was a massive funding round. I'd love to hear how you think about that, how you think Speedinvest should think about that because Speedinvest is, of course, a behemoth of a fund with 500 million in total. But at the same time, Speedinvest, at least to my knowledge, has not done a ton of the really big pre-seed rounds or seed rounds right from the get-go. How do you think about that?

10:49So look, I think the surface area that Speedinvest covers means that not only are they back some fantastic businesses already, but we should, in theory, be in the best ones in the years to come. I think that they're set up to win, the team structures. And candidly, the AUM is also getting there, right? So I think that's doubly positive. I also believe that some of the really big foundational bets that we've seen in Europe are paying off on paper and maybe the industry will become more bold. I think we'll see the pack move. And do you come in with this vision or this view that, yeah, I think the next opportunity lies in making these big, bold bets from the start?

11:41I think so. I think that's a shared vision with my sort of NewSpeed Invest colleagues. I think the one challenge, this is very unique to deep tech, is it's fine to have a bold vision early on, right? Like we would like to all think that we would back a Helsing or a Wave if we saw their pre-seed deck. The big question is, if they're going to need a billion dollars to win, where are they going to get their Series B and Series C capital? And I don't think Europe is set up for that yet, but I'm also loathe to be too sort of Europe, US focused in my thinking because all of the best European founders are capable of raising big money in the US anyway.

12:24And naturally they have customers there. So it's just much more fluid than I think. I think the relevant conversation when it comes to being able to do big rounds is in the very early stages. Because once you are Series B, you should be able to raise that money from any global leading investor because you're on the radar anyway. But it's more that what you do in the very early stages where there's not all these proof points And it really requires that consortium of investors come together and make that bold bet from day one. For sure. And I think that, you know, within deep tech, you have varying degrees of that problem.

13:04So nuclear fusion and designing accelerators and building reactors and magnets. I mean, this is a very long technical roadmap with almost zero commercial proof points. The counter is the cheap, abundant energy at low cost is like infinite demand, right? So there is a market for it. What I like about defense is that you actually have very short commercial timelines because of Ukraine, sadly, and because of European peace dividend deletion and getting back up to 5 % of defense spend, where we're actually seeing some very exciting deep tech being built and deployed in super short timelines. You think about anyone building Envision, autonomous system, shields.

13:54It's crazy if you think of the Cambridge Aerospaces and Autorions and others and like just the speed with which some of them have scaled. It's really, really exciting. Talk to me for a second about, because I think you said something important there and you also probably hinted at what your answer will be before. I would love to hear how you think about picking sides because geopolitics and making money and then taking sides can sometimes run quite contrary to each other. It's not always a good idea to be too idealistic when you're trying to make money. How do you think about that? So my views are my own on this answer.

14:34But look, I'm passionate about defending kind of Western democracy and freedom is not free. And sadly the world is becoming more hostile and at the same time i'm it doesn't get me out of bed in the morning the idea of sort of backing weapons companies and stuff like that i but i think most of the defense tech ecosystem that you see have defense in mind and for better or worse we have an incumbent stack aka two million dollar tanks or billion dollar air aircraft carriers that are just not fit for purpose. And, you know, Europe may get up or NATO may get up to a trillion dollars of budget spent.

15:18And in my view, almost all of that should be on new tech. So the TAM expansion is phenomenal. So that, you know, I do think about it economically like that. And I think in moral terms, you know, I have my own views on, you know, on a democratic country that neighbors Europe has been invaded by a dictator who has done that on immoral grounds. So I think that defending that country, defending our way of life is important to me. I know that that's not a view that's shared by past and present colleagues unanimously. It's a tough nut to crack. That's also why I was curious to hear your take on it. Tell me a bit more about strategic sovereignty as an opportunity in general.

16:07Yes, I think so. Maybe sort of taking a conversation sort of almost back from the front lines. I think a lot of what I think about in sovereign terms, stuff like how can we be energy resilient or how can we have faster compute? and whether that's at a semiconductor level using optical processing or photonics or something novel or ai inference chips or using new energy forms such as such as small modular reactors i think the bit that really excites me in sovereign terms is is that is the new infrastructure and the new picks and shovels layers that we're going to need whatever we do whether we get to agi or whether we want to defend Europe, it's giving us the base that is required, that's efficient.

16:56I think that's, you know, for me, that's the heart of deep tech. And it's kind of why that's what gets me out of bed in the morning. Where do you fall on the axis of thesis driven? This is what I think will lead the charge. These are the areas where I think we need to win versus no seed and pre-seed is so early. it's about finding the best opportunity with the best founders and backing them i personally have no view on what sector that is well i'm going to tell you one of my tricks but i think you have to have longitude and latitude there so a bit like with light speed and first minute speed invest has an amazing sourcing network right and high sort of nps scores with existing hundreds of founders, right?

17:49So good deals are going to arrive on their laps, like not without work, but you have to be reactive, right? And you can't just say, I'm going to do a quantum deal next or a hydrogen deal the week after. You've got to, within deep tech, we've got to be open to it all. And candidly, there's going to be stuff we've never seen before. I mean, that's even better, right? At the same time, I am massively a thesis driven. investor and you know the team at speed invest we've already decided what we're going to work on in september and october and probably go really really deep on on compute they there's a the the inbound chairman young is is a semiconductor kind of you know top top five semiconductor guy in the valley and there'll be a privilege to work with him as well so i think compute we're going to go really deep and look at everything from data centers to energy resilience to cybersecurity threats to chip design.

18:51Because then when you do see something, you can strike quickly because you've got conviction. And I think where VCs can get deep tech wrong is you haven't done the groundwork and you're in a very short space of time having to explain a nuclear fusion deal to colleagues like it can you can sort of fall over your own feet tell me tell me will about how you form theses i this is one of the things i love the most in mentor as well i i have no thesis myself that's why i matched this in lp um but i would love your like how do you form it what are the key frameworks the key the key thoughts around how you build the thesis out and come to come to the conclusion that this is a space that's worthwhile looking more into.

19:39Because you make a big decision just by zeroing in. I think one thing I learned from Ravya, Lightspeed, he always talked about inevitable truths. And I think, you know, imagine you had the macro framework and it was solid and there was an inevitable truth, whether it was about AI or defense spending. I think those are your guardrails. And then I think within that, you then have to be extremely formulaic and think about which parts of the technical stack, whether it's in autonomy or whether it's in semiconductor infrastructure or whether it's in energy, like which bits of the cake do you want exposure to?

20:17And then what are the business models? And candidly, where are the customers going to buy it? I think, you know, these are like first principles, sort of strategic reviews. But I do that for every single deep tech bucket and I do it half yearly. Probably should do it more. And I also revisit it because if I look at what I was focused on within climate in 2022, I was basically wrong on some stuff. What I now call soft climate, whereas hard climate has continued to do really well. But I think soft climate is dead. I mean, I built a company in it, so I kind of know. I was actually about to bring up your past experience with Hummingbird because I'm sure that there's a bunch of learnings around the brittleness of a sector that can seem incredibly booming and then all of a sudden stuff starts happening.

21:13yes and like we were we were extremely early like twice so we were ridiculously early with autonomy and robotics and early ml it was like cat dog type algorithms and which is great and then we sort of we sort of created regen ag mrv which is now in a whole industry which is so the measurement side and then it got really hyped up and then it and now it's i i believe it will survive but there's obviously been a huge shakeout for lots of reasons all your listeners know if i was being really cynical i'd say i probably missed one of the most glaring technical opportunities like in the hundred years which is we should have just i don't know built a robotics business or built a drone for defense company i mean we i i was i think one of quantum systems biggest customers in 2017 they weren't even doing defense i mean so it was staring at us in in broad daylight but hindsight's a wonderful thing and also it's just it was just fun to have have impact and what do you think what do you think blocked you from seeing that opportunity was it the passion around the ideal or i think you know for better or worse like i'm passionate about farming and and food and those supply chains which are just fundamentally broken and i think the further i got down this chemical wormhole of i just couldn't believe it i was like these chemical companies are paid or agronomists are paid to put more chemicals it was like worse than pharmaceuticals the more i got into that i sort of you know i became sort of fervently i guess just just passionate about trying to solve that problem with tech.

23:00It's actually a bit crazy to think that it's not. The penetration of technology in those sectors is still minute. And what I call these distribution actors are very, I mean, they're blocking still. Let me pull a really crazy question on you, and one that is hard to answer without getting your hands in something you don't necessarily want to. The Maha movement is the one that we don't talk much about in Europe. or the Make America Healthy Again movement. Oh, yeah. I love your take as an ag tech, food tech nerd. What are your views? Not necessarily on the movement, but are they touching the right dials?

23:41What should we learn in Europe? Is there anything to learn? Because we're not in a bad place as the US when it comes to food systems. I wish that every child was taught how to grow vegetables at school because my mum used to be a chef and is now a gardener and we grew up eating stuff that we'd grown in the garden. And I think sort of what you put in your mouth either kills you or cures you. In my late 20s, I had cancer and got very into this, of course, as lots of patients do and sort of trying to figure out kind of what could I eat that would get me better again or maybe what was I eating that got me sick.

24:23and I definitely don't have the right answers, but I know you can't go wrong. You stick to the basics. Yeah, I love that. I love the rules of if your grandmother wouldn't recognize it, don't eat it. Stuff like that. Don't eat from middle aisle. This is like a nice kind of, you know, anti-AI agent, super intelligence thing. It's just like, do you know what? Unplug it at the wall, go outside, grow some carrots and then eat them. I think that's why. Okay, let me get into something else. I want to ask you a bit about leveraging the Speedinvest machine. Speedinvest, of course, is known in Europe by most probably as the most people heavy firm.

25:07I don't think there's many that have almost an employee per million under management. No, they don't. I think it's maybe an employee per 10, but it's very impressive. It's a very different model than most have built. Oliver, of course, have spoken both on this podcast and written about it before but i'd love to talk to you a bit about how you leverage that especially within deep tech of course yeah i mean look the the sector teams and that that kind of deep vertical almost autonomous decision making kind of engine is very powerful and i mean it kind of means you've got a you've got a functioning starship with with six very fit engines that are like going deep on all of the areas at all times, that is an advantage for me.

25:53Like it has to be. But it also changes you incredibly, right? Your process from if you were just in quotation marks with a team where you had 500 million split on six partners or something like that, a couple of support people and that was it versus this machine. Yes. And it does. And I also just maybe just to comment on your sort of the operational support and the vertical team. I mean, I look from from my own DD that's reflected in, you know, founder feedback and all of the corporate introductions and the reach and the international scale. I mean, it does count for a lot when you're in the trenches with your portfolio companies.

26:38And I kind of learned from the best seeing that first minute light speed as well. so i can see how it works i also believe you'd have to ask oliver this but they have like a very clear aum strategy they have over a billion under management last farm was 350 and like they are set up to win as they get bigger right and whether that's geographically or with different strategies or bigger on growth, they've got the bones. That said, I don't think anyone in venture knows what will happen to venture over the next 10 years. And I think there's going to be some fantastic new models. Lots of things to learn from colleagues that aren't necessarily on the investment team as well.

27:27My greatest ally at one of my funds was actually the talent manager who kind of like if you're trying to get close to a founder and they're still hiring a VP of bench, like that is probably the most value add contribution you can make, right? Tell me also a bit about being the deep tech lead within a firm that is generalist. How do you make sure you, first and foremost, maybe there's the who makes decisions, but then there's the how do you talk to the rest of the group? how to make sure that the rest of the partnership understands to prioritize a deep tech deal that has zero attraction five years before they're going to hit anything versus a straight-up B2B SaaS marketplace?

28:13I think you have to be able to describe the product. And by virtue of that, which is very difficult when it's a complex kind of alternative materials business or a fusion business or a green chemical company, I mean, I think if you can't describe the product to your generalist colleagues, it's probably not worth investing. Either you haven't understood it or the founder that you spoke to hasn't described it well either. As painful as it can be, that's a very good filter. I think that a lot of generalist funds have a default to kind of historic SaaS, which is now AI kind of focus, which is understandable and healthy.

29:01It's funny because at first minute, generalist fund, like, I don't know, Wave and two of their best investments. For me, those were like very frontier tech businesses. And Ditto at Lightspeed has done some incredible frontier. deals. So I think it's hard and you have to be patient and you have to be a good storyteller and you have to describe the product perfectly. But I think there's ways not to swim upstream all the time. The decision making inside Speed and Must, do you have a lot of capital per partner or space or is it 500 million? I keep saying 500 million, but that's because I've bundled the early stage fund and the later stage.

29:46But tell me, how do you make those decisions in the committee? Well, I mean, I haven't started yet. So whatever I say will be wrong. But there is an allocation and it's not like so rigid that it can't change. And that allocation gives teams autonomy. And I think that's reflected in decision making and process and ICs. that said, I believe it's, you know, I think it has to be fluid and cooperative and so much stuff that sits in the middle of, let's say, two different teams, right? So I think it's a moving feast to some extent. I'll talk again in a year and I'll tell you a more concrete answer. That's a deal.

30:29I would love to continue the talk in the year. Tell me a bit about what you see coming ahead for us in Europe in deep tech, three, five years when you're looking at what sectors do you think we'll be leading on? I think, look, defense, we've talked about, but there are going to be some big companies built, I think, in autonomy and probably robotics. I think biosecurity is just a horrible thing that's coming up. This needs to be sovereign. and i think unlike other deep tech verticals where you can outsource compute to the us i think there will have to be european champions there i think that's super exciting for me i think that europe has a natural a natural um a natural advantage in like lots of areas right there are some really big energy companies and we've seen some awesome sort of ai for drug development Alkin type, cradle, base camp type businesses as well.

31:28So I think it's being self-reflective enough in Europe to sort of triple down on the areas that we're already quite good at, and then hopefully build some of those multi-generational businesses that I described that can then transcend the buckets. Tell me, Will, I'd love to ask you about biosecurity. So you mentioned biosecurity, sovereign compute and energy. I think both of them are really interesting. So let's dive into each of them. If we start with biosecurity and you said that this is going to definitely increase in importance, I would love to hear why you think so and exactly how do you, to those that don't know biosecurity, I actually come from a call with a friend who is organizing a big biosecurity invite-only conference.

32:13So for that reason, I'm quite primed to talk about this. I'm so curious to hear your take on biosecurity. So my rudimentary understanding of biosecurity and the risks, a lot of them are rooted in kind of perhaps some of the more positive things that AI is doing at the moment. So can you take AI, build an enormous model and come up with, I don't know, some sort of oncological therapy for a patient with previously untreatable cancer? Now, that same therapeutical data engine can be applied to a pathogen or some kind of virus or an invasive species. And, you know, whether it's a sort of fungal disease for a crop that wipes out, you know, a country's harvest and then that makes them vulnerable and then there's a precious metals deal.