Investing in climate-aware construction technology makes business sense, claims Sebastien Michaud, a venture capital investor. He will be one of the thought-provoking keynote speakers at WDBE in September.
Sebastien’s passion and the company he works for perfectly fit this year’s WDBE theme: investing in climate through tech.
Opening construction’s black box
Coming from FinTech, Sebastien considered himself an outlier in the construction industry.
“I looked at it from the outside, and I realized that for most people, it is a huge black box in a way. And even in the tech industry, the narrative around construction was not very prevalent, despite how relevant the industry is to major environmental and societal challenges,” he explains.
Sebastien saw that a change was about to happen and seized the opportunity to embark on a VC journey with Foundamental.
Solving the industry’s pressing issues
Foundamental invests in early-stage ConTech startups with the potential for scalability and growth.
”So, we look at the construction industry, we think, where does the real pain lie? And we partner with the teams that seem to address exactly those pain points,” Sebastien says.
One of the pressing issues in the 11 trillion-dollar industry is the labor shortage. It is an imminent crisis in the USA, and now it’s also becoming a challenge in Europe. A big chunk of the workforce is retiring in the coming two to three years, and the job vacancies are not being filled at the same rate.
Foundamental has invested in startups that tackle the workforce problem. Forge trains blue-collar workers in the USA, and PowerUs is empowering blue-collar workers in Europe. Mighty Buildings uses robotics and 3D printing to automate some of construction’s manual tasks. In mining, SafeAI makes heavy equipment autonomous.
Fighting climate change
ConTech startups have only recently started understanding their role in fighting climate change. That’s also evident when you look at their pitch decks; it’s almost impossible for startups to avoid the topic.
Most existing buildings use fossil energy for heating. Converting them to utilize sustainable energy sources is critical for the environment. Foundamental has made multiple new partnerships early in Q1 2022 with amazing teams who fix the rapid thermal renovation and upgrading of the European building stock.
From the portfolio, Sebastien mentions Baupal, a European building energy audit and thermal renovation startup. Another company, Lun, has industrialized the renovation process of homes in Denmark.
Investing in climate is not a zero-sum game
After Al Gore’s Inconvenient Truth presentations, the first climate-aware investment boom started around 2007. The initial excitement withered quite soon, and many investors were disappointed. So, what is new and different now?
Sebastien wonders whether the technology was mature 15 years ago. He also questions the willingness to pay back then.
“I think historically we have seen that there is this narrative around a trade-off between making money and solving climate,” says Sebastien. ”So, everything to do with solving climate problems kind of enters the realms of nonprofit, and it’s hard to infiltrate into the full-profit world.”
However, he thinks that the attitudes and perceptions have changed. Alongside future profits, financial valuations are also starting to capture the impacts on the environment.
Great respect for innovators
Sebastien says that he enjoys his job. He notes that becoming a VC was an intentional choice for him.
“The first time I actually realized I wanted to be in VC, I was working in London. And I used to get myself in startup pitching events, remember listening to the pitches and was fired up with questions. And I knew I wanted to pretty much get into this line of work.”
He greatly respects innovators who genuinely care about a specific mission statement. Startups bring new technologies to market but also have a huge role in creating a cultural shift, changing the conversation, and inspiring others to change their behavior.
“If I can contribute even a little bit in enabling them and in supporting those people, that would make me very happy,” Sebastien concludes.
Join Sebastien at WDBE
Sebastien will deliver his keynote at the World of Digital Built Environment, WDBE, on September 19, 2023, in Tallinn. The two-day event brings together innovators and game changers across the globe for a two-day event in Tallinn and Helsinki.
In his keynote, Sebastien will discuss what investors want to see in built-environment startups. He will also share his experiences and compelling examples from around the world.