Everything about the current state of the energy transition is better. We have better people working on the companies, and making investments. We have better market conditions. We have better acquirors. I am seeing this “better” / next level improvement in our people and market conditions on a weekly basis now. Here are a few examples, with more to come.
Case 1- The Energize Team: I was fortunate to draft the first real investment memos at Energize back in 2017 with SparkCognition and Nozomi. And I am pleased to say that our process of identification and evaluation improved with each passing year. I taught that investment approach to Juan and Tyler and Katie and this past week I was walking by a conference room and I saw Tyler trading notes with Mark and Eileen and developing an investment memo that took some of the original strengths but expanded in certain areas. The company and analysis is world class and our system is working. I didn’t pop in, just smiled and thought: “the next generation is better… And already here” and was very happy about the arrival.
Case 2- The Energy Transition Acquirors: Last week a recently IPO’d energy transition company (NOT an Energize company!) was trying to acquire a Series B start-up within our investment pipeline. After a split moment of annoyance I was as incredibly pleased (and similarly happy as my earlier team stepping-up observation). Why? Our best energy transition companies of the most recent wave are graduating from start-ups to platforms that will implement strategic M&A. Unlike most of the industrial buyers over the past decade, this new wave of energy companies understand the value of growth and is willing to pay growth multiples for start-ups that align to the energy transition.
This exit option has NEVER existed before for start-ups or investors specific to the energy transition. I’ve witnessed this type of exit pathway strength within traditional IT and wished for that to come to the energy transition / sustainability. That M&A exit opportunity is now here.
With growing investors and more exit options, the next generation of the energy and sustainability transition is already upon us – and is about to get far more exciting.