Nick de la Forge, Co-Founder / GP at Planet A Ventures: Angel money is coming back to European tech

0:00Nick de la Forge:Hello and welcome to the Scaling Europe show presented by Deal. This episode is sponsored by SurrealDB, the multimodal database for AI agents. Omni, the AI analytics platform trusted by growing companies like Perplexity and Cibesia and VentureComet, the platform that gives startups and scale-ups real-time equity tracking, daily business insights and automated management information. Thank you for joining me. Please like, comment and subscribe.

0:33Nick de la Forge:Hello and welcome back to the Skating Europe show. I'm Seb Johnson. Today I'm joined by Nick from Planet A. Thank you so much for joining me, Nick. How are you doing? Thanks a lot for setting this up. Really looking forward to the next 20 minutes. No, it's absolutely my pleasure. I'm a big fan of what you built, but for those who aren't familiar with yourself or Planet A, can you give a super quick intro into who you are and what you do? Yeah, super happily. Very brief on my background. Trained industrial engineer. Spent basically all of my career in deep tech at the intersection of tech and then on the industrial side, mostly automotive and energy.

1:04And with Planet A, something that the group of co-founders and myself have been building since 2020, we basically kicked things off in 2020, 2021 to support companies that basically contribute towards building an economy within the planetary boundaries. Obviously, the world really has developed quite fast over the last couple of years, but that's roughly what we do. We're an early stage fund, so pre-seed, sometimes Series A tickets. First fund was 160 million euros. And we usually write tickets at an average of two and a half to three.

1:40Nick de la Forge:And you've built something that's really, really interesting. The first place I want to go to is I want to ask, how has what you've built different to other funds? Because you've got like internal scientists. You've got a really cool setup. So I'd just love to hear a bit about what you do and why it makes you different. Yeah, happily. And it's not that we almost have scientists. We actually do have them. All good. No, I think thanks for touching on that point. And very important to kick things off with that. So when we started in 2020, we kind of looked at the world and we said, OK, there is a couple of very systemic bottlenecks in the world.

2:20And capital access to a certain archetype of companies was definitely one of them. and we always said that we think that we have a couple of problems that are interlocked and we think that technology holds an answer to some of them and we orientated towards a framework that is called the planetary boundaries i'm not sure if you come across it but basically the planetary boundaries have been developed by rockström a swedish scientist that says our planet has nine planetary boundaries climate change is one of them but really only one of them there is the ozone layer there is how quickly species go extinct there is water use land use and so on and and given that our economy is due for an upgrade in its totality we better make it right and fund innovation it really operates within all of those planetary boundaries and so what we kick things off back then with was to say how can we make sure that we really have a full-fledged picture of how is that innovation going to impact what we have.

3:23And so we were the first fund that applied something called lifecycle assessments to the problem. And I'll not go too deep into it, but the lifecycle assessments in its essence are scientific analyses of how much better or worse is a certain product compared to its status quo. So from sourcing of the raw materials to transportation emissions, production emissions, use phase, and the end of life. If you do that for innovation and the status quo, you compare it and then you suddenly end up with a delta that tells you quite precisely okay this is this is what you're really gaining and what was really interesting was what started off with that very clear science-driven angle on analyzing the environmental impact implications turned into an investment tool for us over time because once you start to map out that broader landscape of okay this is the setup in which innovation is taking place those are the different actors, those are the different incentives that those different actors have, you suddenly start to realize that, okay, I can actually use that to really game and manipulate the broader ecosystem in which a company is suddenly taking place.

4:32And it helps me in understanding the secondary and tertiary effects of different groups and different incentives of those different groups. And so it has developed quite a bit. So it still does the environmental impact analysis, but it also became a quite powerful tool that allows us to really understand the system context in which innovation is happening.

4:50Nick de la Forge:Yeah, I mean, it's completely unusual. You know, there are other assessment tools out there, but never inside VC itself. So it's quite unusual and very contrarian, I guess. But I also want to touch on what have been the outcomes or the successes that you've seen as a result of the tools that you've built internally? I think success can be defined into various directions. One of the directions is, okay, and how far has it helped us shape investment decisions and how far has it also actually helped our portfolio companies. And here we've seen companies time and time again, I would say that at least half of the portfolio have success stories here, where being able to quantify what's going on helped them in their customer conversations and in their talent acquisition and retainment plans.

5:33Simply because they were able to say, okay, this is our mission and we actually can prove that this is our mission and this is how we're really impacting the world, which is a relevant narrative for some subgroups. I think where it also helped us is not taking some investment decisions. So, for example, we've looked quite deeply into the space of alternative leather. And so alternative leather is a super interesting case because intuitively you would say, okay, if we were to avoid all of the height processing, then this would put us into a fundamentally better position. But suddenly, if you do the system analysis, you very quickly find out that of the value attribution of a cow, only between 2 % to 10 % really go to the height.

6:20The remaining 90 % to 98 % really are for dairy or meat products. And so if we now suddenly had 100 % supply of renewable leather, it would not impact any of the cattle-related emissions that we have worldwide, simply because the value chain is still up there and it still makes commercial sense. And so we don't really think that alternative leather single-handedly or standalone is an answer to cattle emissions. And so there was examples into both directions where it impacted our decision-making process into either taking an investment decision or not.

6:55Nick de la Forge:Have there ever been any great companies where you thought, well, this could have an amazing impact in some ways, this could be an amazing investment, but actually it fell short of the standards of your own assessment? Yeah, of course. It happens very regularly or also happens very regularly. The leather case is a good example. We've seen different cases in food. We've seen that in transportation. And I think generally there is quite ambitious expectances by founders on the impact. And then in many cases, this turns out to be true. But in some cases, it also doesn't turn out to be true. I think I hinted to what I said earlier.

7:32I think that the world really has developed quite a lot, right? And I'm following the same narratives as you're following. And we are in a fundamentally different place right now than we were a couple of years ago. climate is not nearly as hot especially as a as a keyword as it was quite years ago i would say that still a lot of the things are being funded under different names it's around sovereignty it's around energy independence and so on and but i think where we are currently having like a very active discussion is around manufacturing so europe needs to reshore manufacturing and they're like a best case scenario right now we think that we are going through a renaissance of how and what we produce within europe where also the eu is quite outspoken for draghi plan and other documents that it is absolutely critical to own some of the very crucial parts of our supply chains but there is always an argument to be made around something called rebound effects rebound effects the easiest example to wrap your head around is basically fridges we've built more efficient fridges at the same time the fridges have gotten bigger and so the energy consumption either flat lined or even increased over time same for lights with leds and i think what we are seeing and where we need to have in our opinion a quite distinctive conversation is around rebound effect so if we are increasing output capacity what are we increasing output capacity for our increasing output capacity for solar panels and batteries i think that's that's fantastic our increasing output capacities for fast fashion that would be heavily against that and so we've seen cases that uh where we felt like okay this is probably like interesting from a business opportunity wise but um it might simply accelerate us faster into a direction that we shouldn't really take.

9:29Nick de la Forge:Yeah, it's really interesting. I always want to talk on the broader trends and the ecosystem that we're seeing and sort of like climate tech or whatever. You know, I know that you recently invested in an agentic tool for manufacturing, which is really cool. But, you know, we're seeing this sort of trend as kind of unfashionable. It's like not hot at the moment, climate tech in the way that it was four or five years ago. So what's it like, I guess, like investing in companies that are still trying to build climate solutions, but also going out to fundraise for your own funds? i think there is a sufficiently large overlap in in the two segments and i i think um the the broad world loves to think in boxes they're extremely useful for various different things um i think something that we for example have always invested in and i think falls into the agenda of literally every time it's on this energy and without a doubt energy is going to be one of the most dominating topics.

10:22It's quite clear that the entire AI race is not going to be decided on accessibility to chips anymore, but that it's going to be a race for energy. And so all of the investments that we have made into energy storage, into supercritical geothermal, into virtual power plants, and also the investments that we, for example, haven't done, but others have done into fusion, into fission. All of this absolutely qualifies as a resilience agenda, absolutely qualifies as an AI investment, but also absolutely qualifies as climate. And I think that overlap is sufficiently large. We can look into rare earths, we can look into everything that happens or like many things that happen on the manufacturing front.

11:04We can look into material sensitization at the grander scheme. And so I think that overlap is quite big. And even if it comes to AI native applications, you mentioned it, the company that you're referring to is Aris Machina, founded by Sid in Sweden. And this is exactly one of the cases that I was referring to earlier where we had to face the question of, okay, is it at danger of creating rebound effect where we're just producing more of goods that we don't really need? But given that RS Makina is really targeting customers in the advanced manufacturing space and it's usually battery solar panels, maybe some very sufficient health tech, we feel like, okay, this is actually an acceleration into the right direction.

11:47And so that's the separation that we're doing.

11:50Nick de la Forge:Yeah, you're absolutely right. It's really interesting when you talk about the way these companies were essentially being rebranded. Five or 10 years ago, we might have called them climate tech, and now we call them energy resilience or independence or security. Is that something that you've ever thought about doing? Do you feel the need that you need to reposition yourself in the market given the change in the ecosystem? Yeah, I think it's an excellent question. And I don't have a final answer on whether we have to go through the full rebranding. I think I have a couple of very closely held beliefs.

12:21Some of them are, I think, actions speak louder than a thousand words. And I think the portfolio that we have built demonstrates quite well what the types of companies are that we are interested in. And there is a lot of the companies that you'd assume to be in a traditional climate tech fund. but companies like ours and we've done the first investment into a space tech company and a couple of other things that very measurably contribute towards an economy within the planetary boundaries but in the end i think the large frame that we're taking is does it solve a significantly large problem and i think that's kind of where the the playing field that we have been active in and i think that what we are going to see is that that some sentiments are just too hot or too cold to touch right like if for example we were active in the us we most certainly had to rebrand right now a friend of mine is building a company that has climate in their name they are selling to us customers they have buying us customers and the us customers call them to say hey can you please rebrand or like change the company name into something it doesn't take time because we're going to get blacklisted so there is a there is a real reality that they have to rebrand and i think where we always have been extremely uh what we always have been extremely convinced on is that we are a thesis driven investor so we have a couple of hypotheses on how the future is going to look like and we believe in basically four things we believe that energy is going to come down in costs of the next 20-25 years to potentially almost zero costs.

14:04The same is going to happen to labor through AI and robotics. We believe that as a notoriously short on resources Europe, our task is to handle and deal with the resources that we have at hand through better recycling, through material synthesization, through the bioeconomy and biomanufacturing and so on. And lastly, we look at critical infrastructure. No system, no matter how good and sustainable it is, is worth anything if we can't keep it up to date and online. And so that critical infrastructure may be man-made or may be natural is something that we need to ensure that it can be kept online.

14:40And so those are the hypotheses that we invest in. That's also how I would love to be perceived in the broad world.

14:48Nick de la Forge:And so when you talk about some of these things, you're talking about critical infrastructure, you're talking about labor costs coming down, you're talking about energy costs coming down. how are these large macroeconomic societal changes how is that going to impact venture and technology you know from this year to next year what are kind of the key trends that you see emerging the land across the landscape that are coming from some of these hypotheses that you currently have honestly it's it's like a absolutely moving goalpost um i think what is interesting is you can kind of almost do like have two different animals of venture right now You have your AI companies that don't do the triple, triple, double, double, double, but they go from zero to one million to 20 million to a hundred million in like three years and underlying valuations.

15:36And that especially like most of the large US funds, but also the large European funds are on the lookout for paying whatever valuation they need to, to get into it, signing rounds on top of each other on the same day with like a 5X, which is interesting where the large question mark at hand is what is the revenue quality? This is already the large conversation that is going on and I think this year especially will prove out how the revenue quality will look like and who of the AI labs really has the longest breadth and what is going to get featurized. I think it's not so controversial, but I believe that Google and Microsoft are best positioned to win, simply because they have the necessary cash at hand.

16:23Plus, they also have secondary usage for any data center that they build up in comparison to an XAI or an OpenAI or so. Plus, they obviously have the data. So I think this is where the rates is going in the mid to long term. And I think anything else in the midterm remains to be seen. And then there is this huge bucket of companies that still operate under traditional venture logic, where I think the question that will be answered somehow throughout the next years is, is there value in a company that goes from zero to a billion dollar plus market capitalization in five to six years? Is that still a valuable company?

17:05Is that still considered to be a success? and I think it largely depends on how sustainable the outcome of the AI companies is that we're currently seeing.

17:16Nick de la Forge:Yeah, it's really interesting. Zero to one billion in six years is, yeah, who knows how it's going to turn out. There's going to be so many businesses that are funded today that in a few years are going to look very, very different. And I guess when we look forward to 2026, the rest of the year, what's your kind of overall take or state of affairs across the European ecosystem, in the global tech ecosystem as well. Because a lot of conversations I've had with founders, especially towards the end of last year, people were feeling a bit more nervous, a bit more apprehensive about whether there's going to be a sort of recalibration of the market.

17:46Nick de la Forge:But now it feels like actually the market is pretty resilient. Have you got any predictions, anything that you think we're going to see play out across 2026? It's so differentiated. I think on the one hand, I'm more bullish on big parts of the European ecosystem than ever before. I think what's happening in the UK, what's happening in Sweden plus extended Nordics, what's happening in Munich and Zurich is extremely exciting. And I think a lot of the long urge for flywheels that we wanted to see come into effect really starting to kick off. And we're starting to see that the angel money is coming back, that we are better at monetizing and really building companies out.

18:24And at the other hand, the challenges at hand are so ginormous, right? The catch-up that we need to do as Europe with a Chinese ecosystem, with a US-American ecosystem, and how fundamentally the world order is being reshuffled right now also requests that urgency. And while I see that urgency in action extremely strongly at play with the startup ecosystem, I don't necessarily yet see it with traditional corporates. And the reality is that, at least for Europe, the big majority of the market capitalization is made up from companies that have been founded 60 years ago and older. And so if they go sideways or if they go into significant suffering, then this will definitely have negative effects on the European ecosystem.

19:19But to your point around bubbles popping or not, I don't feel like I have a definite answer. I think I have strong views on some sub-segments. I think what we're starting to already see on the horizon last year, that 2025 was starting to go strong on robotics, will continue in 2026. I think we really see humanoid robots that will be available for sale for everyone that enter human households. I wouldn't be surprised if any of the Magnificent Seven, aside from Tesla, brought out their own models on this. I think we'll see a huge acceleration in space tech, simply because we actually have a space elevator with Starship coming online and costs turning down by so much.

20:06and that is going to kickstart a lot of innovation in that space and make it accessible. And I also think that we'll see, we'll have a much clearer idea on which companies are here to stay that are purely AI-based. So what is the differentiation? We always, when we look at AI companies, we always look at what is the mode and we don't assume that a speed advantage and a good idea can be considered a mode in AI, but it needs to be either a pretty unique access to data or something else. If you think about it, like the amount of data that is currently available on the internet compared to what is not available on the internet is like a factor of a thousand, right?

20:56The absolute majority of data has never seen a model and who is going to be able to start training what type of model on that type of data. That's going to be the real game changer in our opinion.

21:10Nick de la Forge:Yeah, physicalize is going to be really interesting. I think we're starting to see more money go into it, more startups go into it, and this real need and desire for much more data to train the physical AI models. But Nick, we're out of time. Thank you so much for joining me. It's been a great conversation. It's going to be a really interesting five years for Europe. And so, yeah, thank you for joining me. likewise thanks a lot for having me