Giant Leap Fund is Australia’s first venture capital fund that is 100% dedicated to investing in impact startups – rapidly scalable businesses that blend financial returns with real and measurable social and environmental benefits. They invest across the following themes: Sustainable Living, Health and Wellbeing, Empowering People.
We are proud to partner with Giant Leap for our Melbourne Climate Tech Showcase on April 6.
Tickets here: https://events.humanitix.com/climate-tech-showcase-melbourne
Charlie MacDonald, Associate at Giant Leap, lives his passion for engaging with the startup ecosystem and helping great founders use business as a force for good. He is currently completing his Masters of Business Administration at Melbourne Business School. Charlie's background is in marketing and business intelligence with broad client experience across startups, ASX-listed corporates, big four accounting firms, universities, and NFPs.
Charlie chats with us here about his perspective on Australian Climate Tech:
Q. In the recent ‘State of Australia’s Startup Funding’ report, Climate Tech was the sector that excited most investors? Is this true and why is that particularly true for you?
Charlie: Climate Tech is exciting because solving the climate crisis is absolutely critical for humanity and requires reshaping virtually every major industry, from food to shelter to energy to transport and beyond. This presents an ocean of venture scale opportunities, leading highly commercially oriented investors like Blackrock CEO, Larry Fink, to say that the next 1,000 unicorns ($1b businesses) will be climate focussed companies - and we at Giant Leap agree.
Why is this sector important to Giant Leap and also to you as an individual?
The reality of addressing the climate crisis is that the key technologies required either haven’t been scaled, or they simply don’t yet exist. We have a critical period up to 2030 where we can prevent warming of more than 2 degrees, and ideally keep it under 1.5 degrees to avoid the worst of climate impacts that will harm and displace billions of people. Inventing and scaling new technology is our most powerful lever to stem the flow of emissions and draw down carbon from the atmosphere to avoid this outcome.
How do you define Climate Tech?
Climate Tech is any innovation that reduces the strain on our planetary boundaries, such as shifting consumption towards renewable resources or reducing the amount of waste produced. For example, Amber Electric is an energy retailer that incentivises users to shift their consumption to cheap renewable power by passing through the wholesale electricity price. Another example is Change Foods, a food company that produces animal-free cheese requiring 5x less energy, 10x less water, and 100x less land.
What do you look for in terms of attractive climate tech startups? And what do you avoid?
Giant Leap seeks ambitious founders looking to shift the climate dial on a global scale within the next 5-10 years. I get particularly excited about founders looking upstream in the value chain to find opportunities for systematic change, and those who share their best practice sustainable operations so that others can follow suit.
We typically avoid businesses that seem satisfied with incremental change and where founders are in it for the money alone.
It’s been mentioned that there isn't enough domain knowledge of climate tech or climate literacy - is this true and how do we tackle this challenge?
For deep tech opportunities with long roads to commercialisation, there is definitely a domain knowledge gap in Australia that is preventing the capital from flowing to early stage climate research & development.
However, investor interest is there - 2021 saw $40b raised for climate tech globally and a brand new climate fund announced practically every month in Australia. And we’re seeing money flowing to risky early stage research, like Mike Cannon-Brookes committing $500m to catalytic grants and advocacy, and CSIRO Innovation Fund committing $150m to Main Sequence’s early stage deep tech. If this trend continues, we expect to see more deep tech domain experts emerge to invest in game-changing research, knowing that there is an abundance of capital to scale the ideas that solve a real market problem.
What is Giant Leap working on, what can we expect from Giant Leap?
Giant Leap is aiming to make at least 8 climate tech investments that are shifting the dial in our second Fund and support our entire portfolio to embed sustainability best practices into their culture. We also plan to publish content and resources that any founder can use to understand where they can have the most impact and how to operationalise their intent - keep up to date by subscribing to our Small Steps newsletter.
Can we keep to 1.5? What do you need to do to get there?
I’m optimistic, but it’s not going to be easy. The headline is that we need to unlock trillions of dollars of capital to flow into new climate technologies and infrastructure, which will require strong policy action alongside adoption and activism from consumers and businesses. My hot take is that we can’t leave the human element behind if we’re going to make it, because people are at the heart of accepting the changes required.