A €160 million fund pioneering a science-based approach to VC with Jessica Burley of Planet A Ventures

Jessica Burley is an investor at Planet A Ventures, a €160 million fund pioneering a science-based approach to venture capital. Jessica is passionate about impact measurement and, as she says: "If there's not a significant positive environmental impact, the deal is off.”

In this episode we talked about:

🔬 Planet A Ventures' use of life cycle assessments to evaluate potential investments

🚫 The fund's in-house science team's veto power on deals lacking significant environmental impact

🤝 Collaboration with Speedinvest and Norrsken VC to create a climate hardware playbook

📊 The importance of impact measurement for businesses to demonstrate sustainability claims

🌡️ How climate risk is increasingly becoming a business risk

🚀 Her optimism in climate tech thanks to transformative technologies and dedicated talent

#VC #Hardware #Sustainability #Investing #ClimateTech

Promo partner for this episode is Grizzle, helping B2B ClimateTech companies generate demand and customers through high-quality content, social media, and SEO services. Podcast listeners can book a free consultation here.

Transcript

Ryan Grant Little: 0:06

Welcome to another Climate Tech podcast interviews with the people trying to save us from ourselves. Jess Burley was worried about climate change from a very young age but wasn't sure how best to fight it. While studying politics and international relations at Cambridge, she thought maybe it'd be through policy. But then she caught the climate tech startup bug in Berlin and eventually moved to the other side of the table as an investor at Planet A Ventures. We talked about the fund, its work, promoting investment in hardware and much more. I reached Jess in Berlin. I'm Ryan Grant Little. Thanks for being here, jess. Welcome to the podcast.

Jessica Burley: 0:43

Thanks a lot for having me. Very happy to be here.

Ryan Grant Little: 0:46

You are an investor at Planet A Ventures in Berlin which, from what I can tell, has had a really meteoric rise since its inception in 2020. And I realize that you've only been there for two and a half years, so you've not been there right from the beginning. But talk about its kind of short and what appears to be very illustrious history to date, so maybe founders kind of L, and what appears to be very illustrious history to date, so maybe founders kind of LPs, that type of thing.

Jessica Burley: 1:09

Yeah, happily so. Yeah, planet A. For some context, we're a $160 million fund, pioneering a science-based approach to venture capital and putting the planet first, challenging the status quo of how we approach venture capital For the longer history. We were born four years ago from six GPs with the vision to contribute to an economy within this planetary boundary and to fuel scalable businesses that hold the power to really make a change. What makes us unique is our approach to bring science to the world of impact investment. So we have an in-house science team who deep dive into the life cycle assessment, the LCA, as part of the due diligence. So, for those unfamiliar with the term, these are assessments that scrutinize the resources, material flows and emissions from extraction of the raw materials through to production, transportation, usage and end of life, and so this really rigorous approach helps us to identify the game changers in this economic transformation and also helps our portfolio companies, as the quantification in the form of this final white paper can help them with actually having more credibility to their claims of sustainability when going into sales or hiring talent or raising future rounds and media and PR. And we're also true to our word in that we give veto power One of the first VCs to give veto power to science in our investment decisions. So if there's not a significant positive environmental impact, the deal is off. So that's really one part of the vision and the second major part, as I mentioned, is to really fuel these green tech superstars and enable them to make a change.

Jessica Burley: 2:46

So we also have indexed heavily on our platform team so they're supporting with all sorts of parts of building these companies, from the hiring and the talent to comms and brand and ecosystem or network as a GP team themselves. As experienced founders, they have a lot of yeah, built a huge network across industries through their experiences and also in our LP base, as you mentioned, contain some of the serial entrepreneurs of Europe, from Trivago, hellofresh to Zalando and many more. And then we also have industrial connections and corporates. So like BMW, kfw industrial connections and corporates. So like BMW, kfw, ifa, allianz, rivet, these sorts of names. So we can really connect the portfolio companies to those where it makes sense, right For market access or problem solving, sparring on certain topics or whatever they need.

Ryan Grant Little: 3:39

Okay, so very much the German who's who behind it. Six GPs, that's a lot. I've never seen so many GPs, I think. Launch a fund. Are the GPs also exited founders?

Jessica Burley: 3:49

Yes, they are most of them. And then we also have Lena, who's head of impact. So her background is pretty different. And then she's coming more from the policy green tech policy, working in and outside of government and NGOs for the last many decades and is really the expert in LCAs.

Ryan Grant Little: 4:08

I'm really fascinated by this idea of the scientific person on the team kind of having the veto power. I'm used to seeing this as like a compliance person having the veto power. How is that? I mean, is this unique? Is this something that other funds have done, or is this kind of just the way to show your chops as being a very science-driven fund?

Jessica Burley: 4:25

I think some other funds have done it, but absolutely it's our way of showing that we're really committed to this and we also are an Article 9 fund, so it means that we are, like, legally bound to consider environments as a major part of the decision-making process. And yeah, as mentioned, we're doing these life cycle assessments, so we have that as part of the, the dd ahead of the investment decision article nine.

Ryan Grant Little: 4:50

Is that like an eu uh regulation or where does that come from? Is it? Is that like a requirement to get access to some of the eu funding?

Jessica Burley: 4:58

exactly spot on. It's part of sfdr and it's the highest level you can get, so what we call the dark green. There's also Article 8, article 7, article 6. And it's essentially just proving out how much you're really taking environment into consideration. And, as you said, yeah, unlock some capital as well.

Ryan Grant Little: 5:18

Amazing. Oh, that's really cool. I wasn't familiar with that. You're also one of the, I would say, handful of climate VCs out there that really understand the importance of hardware and how important hardware is to kind of, you know, moving the needle on the climate side of things and also about how to invest in it. Andreas Frotz and Brunner from Speed Invest was on the show recently and I know Speed Invest, along with Norsk and VC, were your co-authors of a playbook for climate hardware. I talked to him a bit about that and so listeners can go back to that episode to hear more about it. But I'm curious about how that partnership came about. So I mean, I'm used to seeing VCs cooperate on deals, but not as often on things like this. I'm just interested to hear about how that came together.

Jessica Burley: 6:03

Yeah, thanks also for the kind words. We're trying our best in hardware and I think some other funds are also really successful here and it started that we were all essentially facing the same problems, right that this is quite untrodden territory for at least climate hardware. There's been great cases of deep tech hardware in other sectors, but climate hardware is relatively new post, the sort of first clean tech 1.0, which didn't go so well, and we were inspired by other sort of metrics for software that are out there and felt there was such a big hole for the hardware ones, and so we at Planet A decided to build one, and at Norskin, I think, and Speed Invest, they were also thinking of building one and we're friends. So we were talking about this and realised why we'll create sort of competitive ones when we could collaborate and bring that all together. So I worked on it with a handful of others from these two funds and from our fund, but it's really wider than just the authors.

Jessica Burley: 7:02

I think there was a huge community effort that came into this, as none of us are claiming to be the experts.

Jessica Burley: 7:08

You know there are so many contributors and we had dozens of interviews of key founders and investors who had been in this space for many years, so with over 100 investors and, I think, almost 150 founders and then also drew on historical data from Netzer Insights it's a market intelligence platform and from that we got from 2015 to 2023, a huge pool of, I think, 3,000 or 3,600 climate hardware funding announcements, so we could really draw on how they built the capital stack and how they progressed and and yeah, and so the end result was this this hardware playbook, which we also made a bit more qualitative to complement our friends at other funds who were also building more the uh quantitative metrics that they wanted to hit. We found out others were also working on this at the same time and decided to collaborate again in doing something complimentary. So ours is really meant to be like the handbook that goes a bit more into depth on the qualitative industry insights and bring resources and learnings for the sector.

Ryan Grant Little: 8:15

Very cool. What kind of feedback are you getting, so like I'm sending this out all the time to climate hardware founders and treating it as sort of like a Rosetta Stone to understand how to talk to investors about the subject, because I think that there's really some translation that needs to happen there and it's been, I think, well received, but I'm wondering, as the authors, what kind of feedback you're getting about it.

Jessica Burley: 8:37

Amazing. Thank you for spreading the word. I'm really happy. We're all thrilled with the reception. I think it meant the world, to all of us that people actually working on this, who are really the superstars in this story, find it helpful. That's really the intention. That's really really rewarding on Notion so we cannot see who exactly is reading it, but in terms of click through it seems like it's been very popular in the climate circle for founders and investors, and then I also have been myself publishing more digestible parts. This is a very long playbook and trying to summarize it and get people a bit of a teaser so they can dive deeper into the hardware, which generally also got really good reception. So, yeah, really happy so far.

Ryan Grant Little: 9:24

You have years of content ahead of you that you can use on social media and stuff to all drive it back to this like main, you know, anchor asset that you've got there, because yeah, there's so much in there and I mean I did try to read the whole thing in one go, once made like a pot of coffee, and I was like, okay, no, this is just too much here, but it's super valuable stuff.

Ryan Grant Little: 9:45

You've already kind of mentioned some stuff around LCA like life cycle analysis, and I mean it kind of fits in with one of my favorite topics that I've been working on for a long time impact measurement. And I come from the impact investing world, so working a lot with social entrepreneurs over the years and helping them to kind of figure out the best way to communicate their impact, and I've noticed a lot in kind of the work that I do with climate entrepreneurs these days and with investors that they struggle with it or it could be kind of a new concept with them. I wonder if you could talk a bit more about kind of the broad work that you do in impact measurement at Planet A.

Jessica Burley: 10:22

Yeah, absolutely Maybe to start with the LCAs, because they're not like traditional LCAs. In the traditional LCA you have your MacBook, for example, and you know all of the data points on that. But we're really projecting into the future how this product is going to be and also how it's going to affect the broader environment, and so we do consequential lifecycle assessments. So it considers the indirect, the secondary, the tertiary consequences of these innovations, such as on the market or supply chain reactions. It's a bit more of a forward-looking approach and puts it into more of a system context, and so that's the approach. And we do that post-investment, although we do like a sort of pre-LCA type of assessment before we invest as well, to make sure that it will be a very positive, significant impact. And I think there's different approaches here. It's a lot to ask a single founder to do that kind of assessment for themselves. That's why we're doing it for them and we try to take as little of their time as possible and just giving us the data, handing it over and then produce it for them and for a founder that we wouldn't expect anything like that kind of rigor as they. They have a lot of things to do, but then I do also think it's pretty important to um to also help them with greater credibility.

Jessica Burley: 11:43

As I mentioned earlier, everyone nowadays claims that they're sustainable, so having some data behind it is pretty relevant. And then we're also working with them to set KPIs for the portfolio companies, and that's very different for different companies, right? Because we're also looking beyond just carbon. We're really taking a holistic view, actually using the planetary boundaries concept, which looks at green tech very holistically. In the biosphere is endangered by multiple interacting crises, unfortunately, and so we really want to take into account all of these.

Jessica Burley: 12:17

And so then, these KPIs can feed into how they're building their business and it helps us to keep on track of what impact they're actually having, and it's actually something that the founders asked for. It's really helpful for them to identify broader risks, as if we accept that many, I think, of your listeners probably will environmentally harmful materials and products are increasingly going to be on the tripping board, with policies coming in and with public scrutiny and so on, then having a team of specialists to support you and warn you against sort of locking yourselves to these materials or products that will actually be extremely difficult in the future can be very helpful, but in terms of direct advice for the founders, I'm not sure I can support that. I can just give light on what we're up to at Planet A and Mifri.

Ryan Grant Little: 13:06

It's interesting. I mean, what you're kind of pointing to is that climate risk is increasingly business risk, right, and so looking down the road at materials and that type of thing and having a supply chain that's dependent on a particular material that might be unavailable in the future or have high tariffs because of the scope three emissions that are associated with it, or all these kinds of things, is something that I think 99.9% of businesses probably don't have on the radar and probably contributes to being some of your secret sauce as a long-term investor, like looking out you know many years. I think that's really that's really interesting. Do you publish your like results on this or your methods for other investors or companies to use as this? Like you have a part about impact reporting and the playbook, but how much of the, how transparent do you get with this stuff?

Jessica Burley: 13:59

Yeah, extremely transparent. So all of the and thanks again for yeah, extremely transparent. So all of the and thanks again for the kind words all of the lcas are on our website so you can go through all the data. I think this is really part of the science mission. Right is to be peer-reviewed and transparent, and that's really part of the culture of science, and so we try to, yeah, embody that and be very open about how we're doing it and also be part of the movement. I think there's a lot of impact VCs now coming into the scene and we like to collaborate with the impact teams between the different VCs, and there's often a slightly different approach, which is fine, but it's good that everyone is at least trying to find some way of measuring it and making it more quantitative.

Ryan Grant Little: 14:43

I think that makes a lot of sense. So again, kind of looking ahead, are there specific areas that you, from your perspective as an investor, are there specific areas that you're super excited about right now, or certain kind of topics or themes that you think have really high potential?

Jessica Burley: 14:58

Yeah, so I'm particularly looking at energy. I think there is a lot going on in energy at the moment. We're loving long-duration energy storage or baseload energy potential. But one that came up recently was the energy storage is geological hydrogen, which has this premise of natural pools of hydrogen below the Earth's surface and you can use supposedly oil and gas equipment with a bit of modification to extract at a low cost. On the one hand it's remaining largely unproven. There's only one site that's operational, but on the other, a company called Coloma in the US has raised many millions to try and buy out the land rights and create opportunities on them, in the interesting areas at least.

Jessica Burley: 15:44

And then there's also more stimulated geological hydrogen, which requires a catalyst to stimulate the natural processes and speed up the production of hydrogen. That's already happening, actually with certain rocks below the surface. I think it's very binary outcomes, right, it's still very unproven and there's still some skepticism from experts on the techno-economics working out and the leakage potential from the impact side. So still early days in looking into this, but it's sort of what's been on my plate recently. And then I'm also looking across transport and a few other topics like impact measurement and climate risk, heating, cooling data centers. In general, every topic in climate is covered by someone on the team, but we sort of split between sectors so that we can develop a little bit more expertise and after we see the same sort of companies over and over and dive into those markets, have a greater ability to assess them.

Ryan Grant Little: 16:41

Yeah, data centers which you know, a few years ago seemed like it was very easy to have kind of green data centers and offset all of that. And then comes along AI and the processing power and the energy that's required for that is through the roof and you have like Microsoft, you know, I think last year 30% more CO2 emissions just because of AI. So that's all of a sudden a topic again with these data centers. Interested to hear a bit more about your background. So you're originally from London. You studied politics and international relations at Cambridge. Now you're in Berlin investing in climate. What was kind of the road from one to the other?

Jessica Burley: 17:18

Yeah, it's not the typical story.

Jessica Burley: 17:20

I suppose I think the red line is really climate change through my past, and VC wasn't really the target of mine from an early age, but climate change I started getting concerned about very young, back, before anyone was really doing anything and countries kept on making very minor commitments and still breaking them and there were no real incentives then for companies to change without the policy or the public pushing them.

Jessica Burley: 17:46

And, of course, hopefully all these green techs get to be cheaper and better in the end, but obviously at the start there's a period where you really need that push. So I studied politics and international relations and tried to focus as much on environmental sustainability as I could. But the impetus behind that was really that I wanted to try and change the policy and international policy on climate because I felt that was where the biggest lever was, and I left university and I joined the UNDP for a program on essentially supporting research on climate mitigation and entrepreneurialism and then ultimately found I was wanting to work in a bit of a smaller organization, a bit faster paced, where I still think policy has a huge impact, but I was personally wanting to see a bit more of my personal impact, maybe in a slightly self-centered way, egoist way, are you suggesting that the United Nations is large and sometimes a little bit slow?

Jessica Burley: 18:45

It could be interpreted Not my words, my words.

Ryan Grant Little: 18:52

Exactly.

Jessica Burley: 18:54

And so in my free time I got involved with this company called modern need. That was writing the first textbook on cellular agriculture and I wrote the european chapter originally from the sort of policy perspective on cellular agriculture we have another policy on that in europe and then I got more into the market and supported on this and ended up leading the whole chapter and loved sort of diving into more of the market and the innovation and technology and so I joined actually then a startup in Berlin and it was in circular economy. I found the vibrancy of the Berlin startup scene really exciting and I also realized the importance of finances the company that I was with was struggling to raise and so I had also limited time there and was very lucky in that I was introduced to Lawrence Leishner, who's a serial climate entrepreneur. He founded Tier Mobility most recently, but also Rebuy, which is Europe's largest refurbishment platform, and he was making angel investments in the climate space platform and he was making angel investments in the climate space.

Jessica Burley: 20:01

He's very committed to climate and he'd committed actually 100% of his stake in TIER to reinvest in the climate ecosystem and so I joined him as the first and only employee and we helped him sort of build it into more of a fund. We made 16 investments in a year, which was super exciting and I learned a lot, and one of those investments was a co-investment with Planet A. At some point I wanted to work with someone a bit more full time. Lawrence has an incredible skill to juggle many bulls, but he's obviously was at the time running Europe's fastest growing climate unicorn, so you can imagine that he has only so much time to commit to the fund. And yeah, I joined Planet A two and a half years ago and sort of continued to focus on this early stage of climate tech.

Ryan Grant Little: 20:45

I'd be interested to just dive in a little bit on the EU climate policy stuff, because I see that you've published on this, you've got an interest in this and I guess that fits also with you know, with the stuff you're studying at Cambridge. I know that in, you know, in 2022, you're writing about being bullish on, well, actually just in the new year, in 2023, looking back on 2022. And I wonder I mean, since then, a bunch of things have happened. We've seen kind of the watering down of some of the policies and stuff like that at the EU level, largely driven by lobby groups like farmers lobbies, and I wonder you know if you took yourself from then publishing that January 5th 2023 to now. How have things changed? What are you less bullish on? And maybe what are you more bullish on, if anything, from the European standpoint?

Jessica Burley: 21:30

I could talk about this for hours, I think, to try and get high level. I think the road to progress is never straight, so there's always going to be some backslides and twists and turns. The farmer lobbies, in particular, I think, were quite foreseeable, but actually the legislative acts that they put in place are extremely broad and I'm very excited by them. I think if I take a step back and I think of when I first started learning about climate change when I was 16, and how little was being done then versus now, it's like a huge leap forward. But then, in the more sort of current atmosphere, it's really scary that you know. I think Trump has potential to get into power.

Jessica Burley: 22:10

The EU has deprioritized and downgraded its climate ambitions over the next five years, but I'm not so bullish that in the next five years we're going to see the same kind of rapid output of climate policies that we have in the last five years. I wouldn't assume that, but I don't think that the regulation in place will be as watered down as we're fearing. Don't think that the regulation in place will be as watered down as we're fearing. Maybe this is me being overly optimistic, but I mean, the IRA in the US is very complex to take away. It's similar to Affordable Care Act. It's very difficult to fully repeal and there's a lot of industry support. There's a lot of red state support, because they're getting a lot of carrots and no sticks, and then there's also some, you know, more typically, industries that support Republicans who are very much in support of this because it's helping with certain aspects of energy production and critical mineral processing and reshoring certain industrial processes.

Jessica Burley: 23:07

Then, in the EU side, the FIT for 55 package and the Green New Deal I think both are very intricate legislative frameworks, so it's really difficult to repeal and very robust financial backing as well. So, yeah, as mentioned, I think these will stay in place. I think, on a wider picture as well, like a very bullish on extreme growth in green tech. Like we can see the prices, the cost curve for renewable energy in particular has been extremely rapid and the growth of it also, but then, if you look at fossil fuels, they've actually not decreased, so it's just enabling us to consume more, and that's to be expected on the global scale, as we're developing still many parts of the world and growing as a global population. That being said, it's still concerning, right, but we're not actually cutting still. So we're still in this phase of growing and at least cutting greenhouse gas emissions. That is not development and I think that's a really difficult balance still.

Ryan Grant Little: 24:09

Yeah, it's tough because we're working against the clock and we don't exactly know when the buzzer goes off, but I like that. The Inflation Reduction Act all carrots, no sticks that could be. I mean, if we should send a copy of this to Kamala and that could be a way to promote that in some of the red states as well. And just more on a broad perspective, I mean you mentioned this already with kind of like the hyper growth and climate stuff.

Ryan Grant Little: 24:33

I just got back from Ukraine yesterday and I'm more excited now than ever, you know, working with some of the people on the climate side there and people in politics that they really want to build back. You know, as a terrible thing that their energy infrastructure is being, you know, targeted, but it's very clear that also they want to build back as like an example of green powerhouse, basically as a country, right, and there's that strong desire there and this comes from, I think, you know being very practical people and also very young government, right. So there's that gives me hope, that gives me optimism, and I wonder kind of, you know, as someone who has been worried about climate change from a very young age and as you see this stuff every day and it's hard, you know, for people like us to kind of not see some of these trends. What gives you optimism?

Jessica Burley: 25:17

It's a great question and it's so incredible to hear that from someone who's mean to the frontline that that's such a big part of their ambition and what's giving them optimism. I think it wasn't always that I've been completely optimist. I think when I was studying it especially, it was very pessimistic outlook in that there was so little being done and all the scientists constantly warning of the huge red flags in the environment. But nowadays, in my current role, I find a huge optimism in seeing the incredible talent working tirelessly every day to fight this challenge and the transformative often seemingly magical technologies that they develop, and their dedication is so inspiring. I feel so grateful to work alongside them and be a minor part of their journey. So that's where I really get my optimism.

Ryan Grant Little: 26:09

That's a great answer.

Ryan Grant Little: 26:09

I mean, that's why I started the podcast series, because I realized, you know, having these conversations, there are so many people doing, like you know, the most important literally the most important work in the world, and they're so often the ones who you know are not on a podcast and meanwhile you know there are 500 founder podcasts about the next whatever person who just created a new SaaS accounting platform that's become a unicorn and stuff like that, talking about how great they are, self promotion, and in this space, you have to really look for the people and invite them on and to tell their stories, and I think it's so important and hopefully you know it's good.

Ryan Grant Little: 26:45

Well, definitely it's getting some more people involved in the space. So, yeah, but I hear you and also the best way to feel optimistic about this stuff is to be close to it and working with it, rather than kind of you know away from it and consuming the information, which can be devastatingly negative a lot of the time. Of course, for listeners who want to get involved somehow with Planet A's mission, what's the best way for them to do that? What are you looking for? How should they get in touch?

Jessica Burley: 27:17

Yeah, thanks, probably the best way for them to do that. What are you looking for? How should they get in touch? Yeah, thanks, probably the best way to hear about our updates and follow along the journey uh is to follow us on linkedin or subscribe to our newsletter, and I mean ways to contribute uh manifold. Probably the the biggest is if they have a. You know they're looking for a job and they would like to join one of our portfolio companies. Obviously, they're all hiring rapidly, as many startups do, and otherwise I'm sure there's other opportunities that will come up that way.

Ryan Grant Little: 27:40

As always, I'll put all the links to that in the show notes, jess, thank you so much.

Jessica Burley: 27:44

Thank you, I really enjoyed being on here.

Ryan Grant Little: 27:47

Thanks for listening to another Climate Tech podcast. It would mean a lot if you would subscribe, rate and share this podcast. Get in touch anytime with tips and guest recommendations at hello at climatetechpodcom. Find me, ryan Grant Little, on LinkedIn. I'll be back with another episode next week. Bye for now.