Heidi Lindvall - Pale Blue Dot

• Regulation and Corporate Budgets: Regulation is emerging which will build corporate demand and budgets, but this is still in its infancy. Currently corporates are not incentivised to unearth biodiversity risk and dependencies in their operations. Once budgets increase, we can start to adopt the technologies that can help us start solving these problems. 

• VC restrictions: Many VCs are restricted to invest where there is a clear link to carbon because of the way a lot of climate funds are set up. This may restrict some from investing in Nature-focussed startups where the link to carbon is less clear.

Xavier Lorphelin - Serena

• Going past regulation: Positive regulation in TNFD and CSRD are coming but these remain obligations - companies will focus on ensuring quality compliance at the lowest cost. They're not necessarily going to choose the solution that's really going to bring the best metrics on biodiversity or nature. Stat-ups need to remain laser focussed on delivering data customers will buy in an output that fits their business.

• Avoiding the ‘Red Ocean’: With the number of start-ups emerging primarily focused on CSRD competition will be fierce, not just with other NatureTech start-ups but also consultancies and historic ‘Carbon’ start-ups moving into the space. Consolidation will have to happen. How can start-ups differentiate themselves in terms of industry / business model / level of vertical integration?

• Developing a holistic view - Resilient start-ups will have to have a more holistic view than just biodiversity. They will integrate data on carbon, soil, and water to reduce dependency on the evolution of the biodiversity market.

Lena Thiede - Planet A Ventures

• Laws into action: It’s great news that the EU passed its Nature Restoration Law just now - albeit by a super slim margin. We need to win the farmers, turn them into allies in restoring and protecting nature and find ways to compensate them for the ecosystem services the land they farm deliver (the carbon that gets sequestered, the water that is stored, the cooling effects of forests etc.)  - otherwise, their powerful lobby organisations will make ambitious policies extremely hard.

George Darrah – Systemiq Capital

• Public spending: War is the most awful thing for nature because there is direct ecosystem destruction and there's also the routing and financing of funds to defense that could have been spent on Climate and Nature. Nature is at risk of being the first discretionary spend that goes out of the window should conflict increase.

• Regulatory Headwinds: Recent ESG backlash could contaminate TNFD and other supporting policies.

• Finding opportunities that are removing cost to customers:Nature for many customers is still a nice to have. It’s challenging when an early-stage company is delivering an amazing offering and amazing data, but it's going to cost more. We need to find opportunities that are removing cost base.

Piotr Bukanski - Beringea

• Regulation: We must be conscious of elections in the US, UK and France, and the possible results which might impact the speed of roll-out of the nature frameworks, or how comprehensive they are.

• Resilience: As a result, especially early-stage start-ups, will have to remain resilient, solve for longer runways and potentially look for alternative streams of income, such as professional services in the short term.

• Supporting Digitalisation in biodiverse regions: Many of the nature-focussed solutions today are coming out of Western Europe, and to a lesser extent from the US, while some of the areas of highest biological diversity are in regions where digitialisation levels are not as high. Solutions will need to work closely with local communities and governments to uplift digitalisation in these regions.

Antony Yousefian – TFT.VC

• Clarity on business case: Inertia comes from the lack of a business case of why corporates should invest in Nature. Otherwise, everything is just an additional cost. How will this startup generate value beyond reporting? 

• Developing proprietary solutions: There's a myriad of Nature plays which are just new dashboards on existing data sets. Exciting startups will generate primary data sets, to change those models or rewrite those models. We still know very little about the soil or about the ocean.

• Identifying pockets of demand: Demand is building It's just a question of when and how fast. Startups will need to be agile to respond quickly to service pockets of demand that move sooner.

Edward Thorne – Sand River

• Financial Viability: We need to demonstrate that investors can make commercial returns investing in companies that value, protect and restore nature. This is critical to transitioning Nature from being seen as philanthropic to an investable asset class.

• Time Horizons: If we take a 200 year view and look at the fundamental economic value in the biosphere, critical to both human existence and our economies, it is earth's living systems i.e. nature. If we continue to deplete nature's stocks of natural capital at the rate that we are today, it will be impossible to sustain the quality of life that we have enjoyed until now. Unfortunately, most companies and governments don't take a 200 year view but remain on four-year time horizons.

• Product-market fit: We sometimes see solutions that are being built ahead of a market demand to actually buy the product or service that they're offering. So we’re very deliberate in our investment process to ensurethere's a signal from the market, a willingness to buy and that the founding team has a commercial mindset.

Iván Markman - Self

• Aligning interests: there is still tension between regulators, corporates and voters as to how much to commit to the space, how soon, how fast to drive transition. This translates into uneven adoption and investment in solutions in the space.

• Better mapping capital to solution-types: while there is great progress and ecosystem outlines such as The Climate Brick, this is inconsistent across countries and there are still opportunities to better map capital approaches to help accelerate the space.

• Evolving business models for resilience and success: as much as it is very exciting to see such growth in venture development and innovation, there will inevitably be cases of ineffective/inefficient business designs, poor go to market execution, and imbalances (e.g. there may be too many MRV or carbon accounting companies, too high of a ratio of tech solutions to actual buyers of such solutions, etc.) This will likely require consolidation and rationalization.

Laura Ortiz Montemayor – Regenera Ventures Fund

• Overhyping of artificial intelligence and an under, or a misunderstanding of ecological intelligence. Local communities hold significant knowledge of the biosphere - we must learn from this.

• Driving public awareness on climate and Nature challenges. As a society we’re still overly focussed on decarbonisation - sometimes at the cost of biodiversity. The demand landscape will not evolve until start-ups draw clearer links between complex ecosystems such as water, soil, carbon and biodiversity.

• The danger of neo-colonisation because of sustainability that doesn't take into account social justice  -  A ton of global south territories will be monetized in favour of global north brokers. We need to be careful to not lose the current custodians of these lands - if we do this will lead to significant biodiversity loss - as these custodians hold a huge amount of ecological intelligence about those lands and how to care for them. Start-ups must focus on how to ensure these custodians are valued, taken into account as partners instead of labor and appropriately rewarded.

📩 Feel free to send us deals, announcements, or anything else at [email protected] . Have a great week ahead! 

Written by Ollie. Drop me a message!