For as long as we have been advising technology companies, one theme that crops up consistently is that of efficiency – whether it is resource efficiency, process efficiency, energy efficiency – be it hardware, software, workflows or a combination of all three – the notion of doing things better, faster, cheaper, using less of one thing or more of another has occupied a significant proportion of our collective professional careers.
Then again, we should not be surprised because where there are inefficiencies or new technology to exploit, there is opportunity, which is the very lifeblood of venture investing.
The number of new Climate Tech focused funds launched in the last 18 months is testament to both the challenge and opportunity seen by investors as the world increasingly wakes up to the need for immediate climate action.
The Built Environment – The Challenge
Buildings are the single biggest users of energy worldwide – alone accounting for some 40% of all Green House Gas emissions (GHGs). Revolutionizing the built environment therefore offers a significant challenge area and opportunity for today’s climate tech entrepreneurs.
Two thirds of GHG emissions in the built environment are ‘operational’, coming from the energy used to heat, cool and light buildings with the remainder captured in the fabric of the buildings themselves.
Energy efficiency has moved beyond the ‘behavioral nudge’ that was the hallmark of many of the early energy management platforms and energy monitors. An ex-client and expert in the energy efficiency space has long-since argued that corporates don’t want to pay consultants to produce pretty graphs and energy reports telling them how they ‘might’ save money on their energy bills. What they want from energy data platforms are clear and actionable insights into energy usage (and ideally automated responses) to demonstrate a clear ROI.
Deeptech Solutions and the Built Environment
Some of the easy wins may have already been made – Building Energy Management Systems (BEMS) systems and vendors abound, lighting has long-since shifted to LED and new shared-savings business models are now commonplace.
AI and sensors are now being deployed to interpret, monitor and optimize building usage and environmental factors and web-based platforms allow energy managers to control the real-time management and optimization of buildings across large estates.
Further innovation in sub-systems and materials present significant opportunities can have a huge impact on the built environment without the need for significant upheaval in the existing infrastructure.
Nanotech companies such as HT Material Science, who we have advised on their Series A fundraising recently, for instance have developed a nano-heat transfer fluid that can be quickly retrofitted to closed-loop heating and cooling systems to deliver immediate energy savings of up to 30% from the pumps and chillers running the system. Same system, but a step change in operational efficiency.
This ability to heat things up or cool things down more quickly offers significant savings in process cooling to manufacturers everywhere as well potentially supercharging the efficiency of data centre cooling systems without need to adapt the existing infrastructure.
The Opportunity
The truth is that there is no magic bullet for optimizing the built environment – it will require innovation in both how we interact with, occupy and manage buildings and there are opportunities everywhere and where there is opportunity, then investment money will continue to flow.
The biggest challenges in decarbonizing the built environment will require multiple solutions throughout the supply chain – from infrastructure to sub systems to software to AI and IOT solutions to new materials. The proliferation of new venture funds in the UK and Europe and the increased activity in corporate venturing is testament to the opportunity that exists.
HMT has significant experience of working with energy efficiency and climate tech companies over several economic cycles. Investment appetite has proven to be robust and in the last year alone, HMT advised on 42 transactions across the venture capital and private equity markets.
If you want to discuss your energy business, then our team would love to talk you through your funding options from debt and equity to venture debt.
For as long as we have been advising technology companies, one theme that crops up consistently is that of efficiency – whether it is resource efficiency, process efficiency, energy efficiency – be it hardware, software, workflows or a combination of all three – the notion of doing things better, faster, cheaper, using less of one thing or more of another has occupied a significant proportion of our collective professional careers.
Then again, we should not be surprised because where there are inefficiencies or new technology to exploit, there is opportunity, which is the very lifeblood of venture investing.
The number of new Climate Tech focused funds launched in the last 18 months is testament to both the challenge and opportunity seen by investors as the world increasingly wakes up to the need for immediate climate action.
The Built Environment – The Challenge
Buildings are the single biggest users of energy worldwide – alone accounting for some 40% of all Green House Gas emissions (GHGs). Revolutionizing the built environment therefore offers a significant challenge area and opportunity for today’s climate tech entrepreneurs.
Two thirds of GHG emissions in the built environment are ‘operational’, coming from the energy used to heat, cool and light buildings with the remainder captured in the fabric of the buildings themselves.
Energy efficiency has moved beyond the ‘behavioral nudge’ that was the hallmark of many of the early energy management platforms and energy monitors. An ex-client and expert in the energy efficiency space has long-since argued that corporates don’t want to pay consultants to produce pretty graphs and energy reports telling them how they ‘might’ save money on their energy bills. What they want from energy data platforms are clear and actionable insights into energy usage (and ideally automated responses) to demonstrate a clear ROI.
Deeptech Solutions and the Built Environment
Some of the easy wins may have already been made – Building Energy Management Systems (BEMS) systems and vendors abound, lighting has long-since shifted to LED and new shared-savings business models are now commonplace.
AI and sensors are now being deployed to interpret, monitor and optimize building usage and environmental factors and web-based platforms allow energy managers to control the real-time management and optimization of buildings across large estates.
Further innovation in sub-systems and materials present significant opportunities can have a huge impact on the built environment without the need for significant upheaval in the existing infrastructure.
Nanotech companies such as HT Material Science, who we have advised on their Series A fundraising recently, for instance have developed a nano-heat transfer fluid that can be quickly retrofitted to closed-loop heating and cooling systems to deliver immediate energy savings of up to 30% from the pumps and chillers running the system. Same system, but a step change in operational efficiency.
This ability to heat things up or cool things down more quickly offers significant savings in process cooling to manufacturers everywhere as well potentially supercharging the efficiency of data centre cooling systems without need to adapt the existing infrastructure.
The Opportunity
The truth is that there is no magic bullet for optimizing the built environment – it will require innovation in both how we interact with, occupy and manage buildings and there are opportunities everywhere and where there is opportunity, then investment money will continue to flow.
The biggest challenges in decarbonizing the built environment will require multiple solutions throughout the supply chain – from infrastructure to sub systems to software to AI and IOT solutions to new materials. The proliferation of new venture funds in the UK and Europe and the increased activity in corporate venturing is testament to the opportunity that exists.
HMT has significant experience of working with energy efficiency and climate tech companies over several economic cycles. Investment appetite has proven to be robust and in the last year alone, HMT advised on 42 transactions across the venture capital and private equity markets.
If you want to discuss your energy business, then our team would love to talk you through your funding options from debt and equity to venture debt.
HMT Director Ricky Lane recently hosted a live webinar on value drivers within the e-commerce fulfilment sector and how recent events have impacted this space over the past 12 months. Ricky was joined by four expert panellists from within the sector during the session:
Nick Wells – CEO at leading delivery management company Whistl whom HMT have advised on numerous transactions;
James Hyde – Co-Founder and CEO at e-commerce fulfilment provider James & James who took on private equity investment from LDC in 2020;
Alex Snodgrass – Investor at BGF, who recently invested in global fulfilment specialists, Fulfilment Crowd; and
Pascal Wittet – Investment Partner at private equity house Ethos Partners who are invested in a number of companies who use outsourced fulfilment (Pet Mate / Motocaddy) and are actively seeking to invest in the sector.
Ricky and the Panelists explored four main topics during the webinar, looking at the macro-economic impact of both COVID and Brexit on the sector, the use of technology and M&A value drivers, as well as welcoming questions from the guests.
Below are the main takeaways from the session.
The impact of Covid-19
Accelerated five years of e-commerce demand growth in 12 months
This increased demand will stick post pandemic due to the structural trends towards outsourcing and growth in SME retailers
The high street will become a place to go as a day out and many will continue to make the final purchasing decision online
The impact of Brexit
Tightening of the labour market in the eCommerce supply chain due to EU nationals leaving the UK prior to Brexit
Issues around tariffs / levies / charges and the time it’s taking to get stock across border is making a lot of retailers look for a solution where they can fulfil directly from the EU
The solution is being provided via strategic relationships with existing continental operators or by setting up greenfield investment in new sites
The M&A market in the e-commerce fulfilment sector
Technology driven
Not important in itself but important as an enabler to delivering an efficient and cost-effective service
For institutional investors, the value in the technology is its ability to allow a company to scale quickly without undue reliance on people or capital expenditure
In the medium term, physical technology within the fulfilment centre is likely to remain limited to the automation of basic tasks to reduce headcount rather than deep robotics and AI
M&A Market
Trade acquisitions being driven by the ability to buy in unique capabilities and to add scale to drive efficiencies
Institutional investors believe there is still a significant amount of growth to come in the sector and therefore remain committed to investment
Multiples are being driven by the target’s ability to use technology to scale, whether their proprietary technology will provide a competitive edge, the vertical that it serves, and the capital-intensive nature of the operation (capex light models attracting a higher valuation)
Understanding the EBITDA position and demonstrating that the acquirer isn’t buying off the back of a COVID-bump is going to be key for the next 12 months
If you would like to receive a link to a recording of the full webinar session or if you are considering entering an acquisition, disposal or fundraising process please contact Ricky Lane at [email protected].
HMT Director Ricky Lane recently hosted a live webinar on value drivers within the e-commerce fulfilment sector and how recent events have impacted this space over the past 12 months. Ricky was joined by four expert panellists from within the sector during the session:
Nick Wells – CEO at leading delivery management company Whistl whom HMT have advised on numerous transactions;
James Hyde – Co-Founder and CEO at e-commerce fulfilment provider James & James who took on private equity investment from LDC in 2020;
Alex Snodgrass – Investor at BGF, who recently invested in global fulfilment specialists, Fulfilment Crowd; and
Pascal Wittet – Investment Partner at private equity house Ethos Partners who are invested in a number of companies who use outsourced fulfilment (Pet Mate / Motocaddy) and are actively seeking to invest in the sector.
Ricky and the Panelists explored four main topics during the webinar, looking at the macro-economic impact of both COVID and Brexit on the sector, the use of technology and M&A value drivers, as well as welcoming questions from the guests.
Below are the main takeaways from the session.
The impact of Covid-19
Accelerated five years of e-commerce demand growth in 12 months
This increased demand will stick post pandemic due to the structural trends towards outsourcing and growth in SME retailers
The high street will become a place to go as a day out and many will continue to make the final purchasing decision online
The impact of Brexit
Tightening of the labour market in the eCommerce supply chain due to EU nationals leaving the UK prior to Brexit
Issues around tariffs / levies / charges and the time it’s taking to get stock across border is making a lot of retailers look for a solution where they can fulfil directly from the EU
The solution is being provided via strategic relationships with existing continental operators or by setting up greenfield investment in new sites
The M&A market in the e-commerce fulfilment sector
Technology driven
Not important in itself but important as an enabler to delivering an efficient and cost-effective service
For institutional investors, the value in the technology is its ability to allow a company to scale quickly without undue reliance on people or capital expenditure
In the medium term, physical technology within the fulfilment centre is likely to remain limited to the automation of basic tasks to reduce headcount rather than deep robotics and AI
M&A Market
Trade acquisitions being driven by the ability to buy in unique capabilities and to add scale to drive efficiencies
Institutional investors believe there is still a significant amount of growth to come in the sector and therefore remain committed to investment
Multiples are being driven by the target’s ability to use technology to scale, whether their proprietary technology will provide a competitive edge, the vertical that it serves, and the capital-intensive nature of the operation (capex light models attracting a higher valuation)
Understanding the EBITDA position and demonstrating that the acquirer isn’t buying off the back of a COVID-bump is going to be key for the next 12 months
If you would like to receive a link to a recording of the full webinar session or if you are considering entering an acquisition, disposal or fundraising process please contact Ricky Lane at [email protected].
