BREAKING: 2150 has raised its second fund closes reaching €500m in assets under management!

0:00Hello and welcome back to the Scaling New York show presented by Deal. I'm Seb. I'm joined today by Jacob, co-founder and partner at 2150 as they announced the closing of their second fund. Congratulations. Thank you for joining me. Thank you, Sebastian. And yeah, it's great to be here. So you've just closed your second fund. I think it's 210 million euros. Now means you're going to be managing, what, just over half a billion dollars assets under management? Something like that. I mean, yeah, Trump is out there making noise, so the dollar is probably fluctuating, but something in that territory.

0:34Yeah, it's great. I mean, we're super happy to be done with fundrais and we're off to the races doing deals. amazing how did you find the fundraising process i mean it was a slog but we had an extraordinary what's a quote-unquote easy time or like an amazing uh timing for the first fund and this time so we raised the first fund in a year plus some preparation essentially uh which obviously took some some time before that um when people say they raise things they like you know half a or whatever there's always like thinking and prep time going going in advance but you know this time it took a couple of years and i think that's probably how it should be it's more normal uh being a like an emerging manager um so but it was it was it was hard work it was kissing a lot of frogs and um it took us around the world a few times but we have some great new investors that come up with first like pension fund to the us we have lots of great investors from the first fund who are back in there all our anchors so yeah we're super super grateful and um and i think lucky to have a great setup again and have resources to back great companies so yeah we're super happy nice it's amazing news it's a an amazing testament to what you've built um what kind of you know you talk about some of those new lps as new investors that you've got on board what got them so excited about 2150 that kind of convinced him to get involved yeah i mean um i think it's the it's the it's the long-term view that we that we take so i think it's the investment thesis it's obviously also they looked at the first fund they looked at like what we've built so far and it's still so early that you you can see obviously trends but you know it's a very long game and the the final outcomes of a fund one um is is still some time away and but we have some like first closing and the first investors coming in you know it's it's you know you can't really point to the first fund and say you know this is gonna for sure be a breakout success but you can see good signs and you can see like how does how does the team operate what kind of position have they built in the market and so i think there were just a lot of things they liked about us and then i think the the sort of slightly differentiated position we have um inside tech which is which is we have this this very long-term view um or let's say secular trend that we think is driving a lot of opportunity which is uh you have urbanization being continuing to be the platform that brings prosperity to most people in the world today is something like 80 percent of GDP in the world is urban by definition this is sort of like created in in cities and by by 2050 the predictions are that two-thirds of 10 billion people are going to be living in cities to achieve that to get that prosperous life that good life and that's a few more billions that's a lot and in order to provide that platform I just build it you need to power it you it has to work and that's incredibly resource intensive and capital intensive so that's just like a lot of it's a big value pool but it's also a big burden on resources if we continue to do it the way we've done and it poses risk right on the other hand if we don't get it done right you do have like you know billions more people in places like africa who will look for that prosperity like in Europe, for instance, and, you know, that's going to create its own set of problems.

4:20But we then just look at this very long-term trend, and then we say, well, what are the bottlenecks that technology could solve to allow that continued urbanization to happen without, like, destroying the planet or, like, stretching resources or creating conflict around resources even, right? I mean, I'm Danish, look at Greenland. I mean, these are like critical ingredients in this whole journey. And so we think technology has a big role to play to overcome and solve those bottlenecks. And the problem slash the opportunity is not just going away with the next election or something. It's a very long-term drive because of human nature and human growth, basically.

5:08And this is, I guess, still the fundamental thesis that you had behind Fund One, right? It's still all about climate tech at its heart, but fundamentally about urbanization in cities. Have you changed at all since Fund One? Have you noticed that maybe there were some areas that you were looking at maybe within urbanization in cities were not the right area? Or learning from some of your breakout successes that that's where you want to double down and whether it's like mobility or energy. Yeah, what's changed, I guess, since Fund One? No, absolutely. Well, I think a lot has changed even inside Fundwals.

5:40So from the day we started, I mean, we were not even like, I mean, climate tech was not a concept almost. Nobody spoke about climate tech. We were a sustainability tech fund with this focus. And we came out and they said, oh, it's the biggest climate tech fund in Europe. Okay, that was a now we're a climate tech fund. It actually doesn't say climate tech on our website. But we were four generalists starting this. And then we were like, okay, we realized very quickly, this is quite like technical stuff. without deep tech involved here, let's try to build a team that has a skill set that complements ours so that we can start to build domain expertise in a lot of different areas that are not our first nature.

6:19And we learned a lot in that process. And we continue to do that. We continue to expand the scope because if you had 80 % of global GDP as sort of like your potential surface area, that means a lot of things, right? and maybe we do not do agriculture we definitely do not do like the defense, oiling so there are lots of things we do not do but there are so many things we could do that could be relevant and what we started doing already in fund one is that we started to look sort of like up and down the value chains and supply chains of the stuff that is part of the urban fabric and the urban operations and the urban economy and that can take you like all the way to like resource extraction right because electrification is relying on a lot of of critical minerals so like we have a spin-off company from mit that's working on that that that that stuff and that is in fund one and that was like a late investment in fund one and i think that's an area we sort of opened over time and the same happens now and and what is obviously super exciting now is that you have um a new sort of like general purpose technology kind of like you know spotting moment that has happened in between fund one and two which is ai which is increasingly finding ways to become liquid and create change inside of the physical world of industry, of mobility, all these other things that are part, constituent parts, or feed supply chains and value chains that are part of our sort of like universe.

7:50And that I think opens up a lot of interesting opportunities. Okay, so one of the things I think is particularly interesting at the moment about sustainability and climate tech is this, how unfashionable those terms have become. So we're seeing more and more demand, more money going into things like energy resilience, critical minerals, and a lot of these things you probably would have bucketed under sustainability or climate take maybe five years ago. But now they're not really framed like that. They're framed as a sovereignty push or energy resilience. Have you had to change the way that you are talking about your types of investments, the way that your fund is running?

8:22And have you noticed a change in LPs?

8:28well i think you're absolutely right that there's a lot of relabeling taking place and i people do that to cater to a special audience right so if you're raising money from an lp base that is sort of like increasingly nervous that climate tech may not be what they thought it was or um they want to be more exposed to ai or you're a company in the u.s where the political environment has changed and where you get penalized for being, for having sort of like a label that is associated with anything that came before, including, you know, climate action, then it makes sense that people just talk about the same thing in a different way.

9:13But I mean, and you know, like I said, we were not a climate tech fund, but then people started to call this whole thing climate tech. And it was like, okay, fine, we can be a climate tech fund if you want. for us we think about sustainability and business and you know sustainability is is only real if it's good business and scalable because if you do not have a solution that is um better faster cheaper and more sustainable like you have nothing right you have a you have aspirations and good ideas, but it will never drive impact. And so we've always been looking for these technology opportunities where you feel like that superior business model or the superior economics come alongside environmental benefits or other sustainability benefits.

10:06And a lot of this stuff is still the same, but you're right. People are framing it differently to attract capital or to not attract negative attention in the wrong places. And, you know, we've seen it happen in our portfolio. We've had like a U.S. company that lost like tens of millions of a grant for building like a factory with like building manufacturing jobs in the middle of the heart of the U.S. So I basically like, it looks like a campaign poster if you think about it for Trump. But that company showed up on one of these lists that was sort of like being where companies and grants were being stricken out by, probably by Elon Musk's team back then, right?

10:47And so randomly they lose tons of money and we have to sort of like step in and find a solution. Now I think it seems like we're getting that money back because actually it all makes sense in the end, right? Because we're trying to achieve the same thing. We just want to speak about it in different terms. So, you know, these labels that are used, they always change a little bit with the season and, you know, because LPs respond better to them or because, like, the regulator responds better or talent responds better to it. So, like, we all kind of like, you know, we always have to attract people capital at the same time to solve these problems.

11:23But in reality, most of this stuff is just the same. And if you look at the convergence between, you talk about, like, AI has sucked out all the oxygen in the room for the venture industry, and it's kind of true. But, you know, what is AI? what are these token factories at the end of the day this is just like one big energy energy machine so the convergence between the ai super cycle and the energy super cycle is is more or less perfect and that provides tremendous opportunities that sits back in the middle of our investment thesis right we're not going to go out and back the next sort of like foundational model and we don't have the capital for that but all the downstream innovation that's coming into the application layer from this innovation is like going to be like full of opportunity for for for lots of investors including us so we're super excited about that i mean i see that in a little bit i mean you can compare it to i mean the way that ai is going to come in and and and create opportunity and efficiency and innovation in the physical world as well it's almost you can compare it almost like to industrialized fertilizer coming in and stimulating population growth 100 years ago it has that kind of like high potential so that's super exciting but you know it has to happen on a on an energy cost and an energy sustainability balance in order to be sustainable in order to actually really work because otherwise it's too expensive and then and then and then we then we don't get there so so i think the the convergence of these different trends actually is actually quite high but you're right that you know people are using different nomenclature now to cater to different audiences or to kind of position differently or avoid uh uh unnecessary attention uh politically so and especially in the u.s and yeah actually let's touch on the u.s because you mentioned you invest both across europe and the us europe is because sorry in the us it's become particularly unfashionable to talk about climate and sustainability and all that kind of stuff has it made it i guess like from from your position in the ecosystem investing across both geographies what's it like between the two continents you know if you were a founder you know if you're an ai founder it's obviously everyone would say it's better to be in san francisco go over there build your company there if you were in this sort of like climate world especially in urbanization where's the best place to build your business right now is it still in the u.s or is that is this kind of change in environment made it more favorable to build in europe now i think it really depends on what you're building um if we look at our investments in the u.s they're all over the map right like from silicon valley to new york to like detroit north north carolina florida um uh denver it's it's really all over the place and it's typically very um it's a function of what if it's deep tech is especially it's a function of which research environment is existing.

14:20Now you have your MIT spin out, there's a logic to why it happens there. We have a company doing industrial heating out of Colorado and they just have a specific lab there at the university where you can do this stuff and simulate a whole grid and that doesn't exist elsewhere. So I think it's often a function of where the talent is and where the talent ecosystems are generating the opportunities. And it's not as centric to one ecosystem or the other. And I think that's great. That's an opportunity in itself because, you know, there are fewer VCs around the corner in those places. So, you know, it's made easier for a European fund with a bit of a specialty to come in and maybe pick up some opportunities where if you go to San Francisco and you want to do AI deals today and you're an emerging manager from Copenhagen, London, that nobody has heard about, it's going to be pretty tough.

15:13Yes. And so, but I think it's pretty evenly distributed. And, you know, who knows how things are going to go in the next five years. The world is decoupling. We have, you know, maybe that represents opportunities for creating European champions that would otherwise not exist because they would either be low-cost Chinese or they would be an American dominance. I don't know, but I think there could be an opening for more regional champions as the world is splitting up into regional spheres of, let's say, it's almost like security spheres and interest spheres. I was in China this summer for an educational tour and really get a reality check on innovation, on competition, on seeing the future, so to speak.

16:02And it's very clear that very few European companies could compete in China, if at all. And you see some phenomenal progress there. And you think, why are we even considering to fund a company trying to compete with that in Europe? And the reason might be that that particular Chinese leader might not be allowed in to compete on equal terms, especially if it becomes a little bit of a question of security. And I think, and that is probably more true in the US that you have this divide, right? So that represents new opportunities. And I think that's interesting. So I think the map is super diverse.

16:45We see opportunities everywhere. That's also why we continue to have a global strategy and a global mandate. We want to invest in the best companies solving these problems, regardless of where they are. And we have also made a few investments in places like Brazil and Turkey and Singapore. So we're not just Europe, North America, although that is the majority of what we do. And have you seen a shift in the more recent years to more hardware type investments? You know, we're seeing this with AI and data centers and defense, especially in Europe, we're seeing this push towards more manufacturing, more hardware, more deep tech.

17:16are you seeing more deep tech climate solutions sustainability solutions come out are you investing more in that sort of hardware deep tech than you may have done from fund one i think we're doing it pretty much like we did before it's like in is it a 50 50 split maybe between hardware deep tech or sort of like hardware enabled um uh software solutions and some of that is really like scientific deep tech, yes. I think where people have gotten a little bit more cautious is very capital intensive business models and anything that sort of like touches, like where the economics of carbon, CO2 is involved in making the business, that has become a little bit challenging.

18:04So I think a lot of capital that was expected to come in to fund like the first-of-a-kind factory and the next one where you're talking like not just a few tens of millions but like sometimes hundreds of millions you know that money isn't as readily available as it was um on the other hand then you have a lot of interest in deep tech um and hardware based you know technology in a lot of other places um where money is flowing i mean the capex expenditures and ai obviously uh like drawing headlines every day is a huge part but there are other pieces also um so i think there's general excitement um and it makes sense i mean if you look at some of the greatest companies in the world they're hardware companies um and so it is possible and it's a little bit different than investing in software and you know it has different upfront risks but also if you make it it can be also very resilient in different ways so we continue to do that um we are also cautious about like very high capix where you still have like early stage risk at the same time combined that is just very tough um but otherwise you know we are very uh very happy to invest in deep tech hardware as well nice and uh you know you talk about um yeah i mean look at the portfolio you've had some like real breakout successes you know when you look at the founders who are building these amazing companies either in deep tech or software.

19:29What is it that attracts you about a founder building in this space? I think it's exactly the same thing that would attract anyone to a founder building anything anywhere. I think the founder characteristics, like great founders, are not different just because they built something in a domain where they also have a positive impact on the planet for that matter. I think at least that's not what we're looking for. What we're looking for is just like really exceptional kind of outlier individuals. Entrepreneurs are not normal people. The ones that are really driven for success beyond just like, you know, a little bit of economic freedom and an opportunity in life.

20:13But the people who want to go that incredibly difficult long distance to win in this venture-backed technology race. Because it's insane. No? If you knew, you wonder why someone even does it, right? I mean, and the personal characteristics, the psychological traits that make you more or less fit for that. I mean, we think a lot about them. But, you know, there's nothing very different between the kind of founders I would see and recognize and have experience being extremely successful in marketplaces, software, from the past to what I see today, like people building businesses in this space. What has been, I think, novel for me, at least as a generalist, has been to build a pattern recognition, sort of like a model for quality when it comes to deep tech or science spin-out companies.

21:15Because this is like a slightly different type of profile of founders that you meet there. So that has been a learning curve, I would say. But you are looking for these very unique individuals. And I belong to this curve. The people who generally think that when you meet someone really exceptional, you know instantly. I mean, you know instantly. like first five minutes first 10 minutes and it's a bit like hiring people um it's been the same experience always like hiring people like within the first five ten minutes you know and the rest of the conversation is about like falsifying like figuring out why you might be wrong like and and sort of but you kind of get it like if you if you don't have that sense within like five ten minutes that there's someone extraordinary in front of you like it's probably not there um most of the time at least so um yeah we look for for extremely ambitious people who can attract people of capital to solve problems and you know create lots of jobs and opportunity and that takes a certain kind of extreme individual and uh but it's fun to work with yeah i've heard other people describe it as almost like a magnetism or charisma and you walk away from the founder and you sort of can't stop thinking about them you know like you're desperate to speak to them again and to to move things forward uh but that's that's the magnetism attraction bit right but there are other parts of the of the equation also you want people who are extremely resilient you want people who are you know not very agreeable necessarily right because everyone will tell you oh this is so difficult it's not going to work why don't you do this instead or that instead right and if you listen to all the voices um i mean you lose the direction right but you need to same time to be extremely flexible about how you get there um and so you need to be super open-minded at the same time so it's it's quite a unusual combination of psychological traits that i think makes a typical good entrepreneur um but it's um yeah i think it's something all vcs are obsessing about like how do you sort of like and if it was easy to put on a formula and and and just like and teach someone like probably there would be fewer jobs like this yes yes so that's it's part art and science i guess well jake thank you so much for joining me and my congratulations on the fund super exciting and I know that you've already started deploying it already but it's going to be exciting to see even more investments be made out of it thanks thanks for having us