Interview with Avi Feldman – CEO of Capital Nature
We had the pleasure of speaking with Avi Feldman, CEO of Capital Nature, about Cleantech investing and future trends within the industry. Mr. Feldman has extensive experience in early stage Cleantech investments, in managing and funding programs in the public sector, and vast experience in leadership of entrepreneurship and startup projects. Enjoy and remember to register for the Clean Tech Open if you haven’t yet and plan on attending!
II: Tell us about your background and how you got involved in Investing?
AF: I have a unique path that led me to be part of Capital Nature. I worked in the Ministry of Economy and I was a Chief Legal Advisor to the Chief Scientist for seven years. We dealt with innovation programs and innovation policy in conjunction with taking policy measurements with a special focus on Cleantech. Also, I founded and directed the Regional Development Center, a planning unit with regard to Negev and Galilee that led policy formulation of new economic development models. I also led a focused effort on designing specific programs on clean tech – for example: research with OECD on promoting the economy in the Negev through Cleantech.
II: What draws you to the Cleantech Industry?
AF: Cleantech has natural linkages to peripheral areas all around the world. Also, I’ve become emotionally engaged in promoting both green tech and promoting economic development in the Negev. I’m trying to do it in an economic way – economic viability as a way to examine potential projects and ventures. There are major trends toward social impact and I’m trying to be sure that it is also economically viable
II: Tell us about what type of startups you tend to invest in?
AF: Technological Start-ups that we invest in are within the domain of Green Energy and Smart Transportation solutions. This is due two reasons: 1) scope of the investment that we have with the government as a PPP (Public private partnership) and 2) the focus that our investors are interested in.
II: Can you share any examples?
AF: Currently we have invested in 17 technologies, and have 13 active start-up companies in our portfolio. I’m deeply attached to all of our investments but I’ll take a company like SolView – They are a rooftop solar enabler – they created a platform to find out which rooftop is relevant in order to deploy solar rooftop systems by using open imageries from Satellites. It’s a pure big data analytic platform. For me it’s exactly what we are looking for – to facilitate a green revolution and to be economic while doing so.
II: What trends do you see in the Cleantech industry? What do you think the market will look like in the next decade?
AF: We can see very clearly that energy storage solutions are much needed. The industry is now in its very initial phases of trying to use different potential solutions and basically it’s a technology driven market. So you have to improve the technological aspect of energy storage to have a viable solution and this is one of the megatrends.
The rising of the solar penetration is another trend- we’ve seen it in the last few years. This trend will only increase in size and pace and the combination of solar and storage together will only accelerate this pace.
Digitization of the energy market – smart home, smart cities, smart grids, and IoT are all buzzwords of digitization – understanding that energy doesn’t flow in one direction from utilities to consumer – it’s flowing both ways as communication and data with regard to energy continues to grow. New business models and services can be provided because of this new data and communication flow.
Another trend I’ve seen is a combination of robotics within the energy world. To date most of the energy provided is through a cable line infrastructure, but more and more operation services and energy is being provided through robotic systems. For example, drones and cars are using electricity, which means it’s mobile energy – more and more activities would go into electric energy through vehicles and robots.
II: As an Investor, how do you measure the success of your clean tech investments? Is it solely financial or do you look at the effectiveness of their impact as well?
AF: Both are essential. We won’t make an investment if both aspects aren’t present. To determine the potential success in terms of economic realization – we use valuation to determine whether it will be a success.
On the green side – sustainable impact measurements are more of a subjective evaluation of how well does it operate. Here the way you examine that, in the way you determine if you reach your success point is more difficult. You can’t compare between potential penetration of a solar roof top and using less gasoline in cars. There’s no way to compare between the two in terms of green impact.
II: Do you think the growing impact investing field will have an influence on the direction of Cleantech?
AF: Yes, I think that basically we can see three streams of potential investors – those that are purely financial – don’t look at Cleantech as different from other sectors. The other two are impact and Cleantech – in a way, Cleantech is a subcategory of impact investment.
But there are a lot of companies and investors that don’t consider themselves impact investors or their motivation doesn’t come from creating something for the good of society – but they are strictly focused on Cleantech because either they know this sector and work in the sector or they have a specific interest in the field – in practice you can find many investors that are strictly investing in Cleantech and not under the title of impact.
II: Okay, last question. What are 3 upcoming Cleantech companies that are currently not in your portfolio that you think have potential to do extremely well?
AF: Well, I’ll give you a specific type of company that I think will do extremely well – I’m looking for something that will create a bridge between energy generations and shared economy – any potential opportunities or technologies that in a way could combine those two worlds and provide some kind of interesting solution for – I would call it” community grid” or “microgrid” – whereby on a local based generation I can either be on the generation side or the consumer side and it might be even that within or throughout the day I switch back and forth between consumer and generator side – whoever will come up with this solution or platform could be a revolution – It would reinvent the way we generate and consume energy in our society.