#107 - Julia Padberg - SET Ventures - "The energy transition is not a technology challenge"

I guess, so let's talk more about the energy system.

One of the things I was thinking about coming for this episode is, so we obviously have very high kind of data center demand for power.

The world is electrifying, that's no doubt.

The thing I'm thinking about is like from your perspective, you were feeling probably quite comfortable for Funtube and one being kind of alone in the market or with only a few actors.

Yeah.

Not everybody wants to do it.

And we also see crazy run size, crazy valuation.

Does that mean that performance in the energy sector for venture capital is going to be going down because there's a bit of a hype around it right now?

It very much depends.

But indeed, we always say we were already hot on energy long before it was cool.

And that is helping us today, I think.

So for some of the kind of hyped deals, we don't compete on valuation and we consciously decide not to invest because entry valuation matters just as much as exit valuation.

Depending on the case, obviously, if there's an extremely high exit, you can almost say entry valuation doesn't matter anymore.

But unfortunately, we haven't seen many unicorn exits in energy tech in Europe yet.

So we have to assume very solid exits, but then also good entry valuations.

Um, but for many, actually for many investments, we are, um, yeah, we're not the highest offer and not the highest term sheet on the table and still entrepreneurs, uh, want to partner with us because they value, um, yeah, the, the, the quality of investor or the, the, the conversations, the honest conversations we're having over, yeah, dilution in that first round.

That's very interesting.

And I think that comes back to actually doing it since 2007, having, we can talk later also about your LP kind of setup, where I think you have quite a few corporates that are utilities and people that are interested in the sector, potential acquirers.

I think there's a lot of this.

Has this made your job harder now? Do you feel like it's harder for you now than it was 10 years ago?

Yeah, it's just very different.

That's why I've been here for 10 years.

The type of work and the dynamics in the industry are just so different.

So where it used to be the niche of alternative energy investing because there was impact and sustainability and it was really a trade-off between impact and economics.

Now we see that these three factors, so sustainability, affordability and energy security are nicely coming together.