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Investor Insights

September - 2020

This month we begin with a reflection: where we have come in the last few months during the pandemic and what does this mean for our future? Below we summarize the business opportunities we are following, but first, let us reflect for a moment on the massive social and economic impacts of the pandemic on the world that have made these businesses even more relevant today.

Work and education

For years, organizations such as the World Economic Forum have talked about Industry 4.0; a digitally interconnected world that is the next form of the industrial revolution. Suddenly, we have been forced to step into an aspect of that world and, generally, found it to be a surprisingly pleasant place to be. The implications are profound, not just on industries such as airlines, real estate, health care, and retail but also on the lives of many people directly and, especially, on education. Even for institutes of learning that are attempting to go back to normal – the new normal includes a big element of online study.

Climate turning point

The enforced scrutiny of companies and governments worldwide has accelerated in importance to fight against global warming. The question is whether the urgency of stimulating economic recovery from the pandemic will delay the progress on global environmental change initiatives.

For example, the pandemic briefly reduced emissions by about 17% compared to last year but, according to the World Metrologic Organization, the carbon dioxide figures are again approaching the 2019 levels (article).

To mitigate the risk of climate change and the rise of temperature that has been affecting the planet for many years, we need to find a sustainable way to reduce carbon emissions. The objective is to minimize disruption and ensure smoother recuperation by encompassing new holistic approaches. The firms that we are following are contributing strongly to these efforts (see below).

Inside this issue:

Source: Global average temperature up – Source: US National Oceanic &
Atmosphere Administration via Bloomberg 09-Sep-2020

Growth of the new economy

The pressure for a green world has not reduced – we have glimpsed the possibilities through our enforced lockdowns. As renewable energy costs have dropped, undercutting existing coal-fired plants, we are seeing massive growth in the renewable energy industry (article) and an increased interest in ESG investments. For example, the shift to electric-powered mobility has picked up its pace since the storage capacity of batteries is far beyond what it was a few years ago. The recent announcement by Elon Musk on the development of a new battery technology certainly makes the medium-term opportunities brighter.

In general, consumer and social demand for a green world will continue to grow stronger as global market trends are moving in the direction of clean power. Therefore, investments in modern infrastructure will play a major role in economic and environmental consequences (article).

Here in the UAE, the recent report on the private sector contribution to achieving sustainable development goals (SDGs) is a case in point. Our own modest contribution is to encourage those firms whose business mission includes sustainability. Below we enumerate three companies – one in the electric-mobility area, another in waste reduction, and the third is an investment in human capital to support the shift to industry 4.0.

Investor opportunities

  • Taking to the waters, quietly and sustainably

After the EU’s €15 million investment proving that a 60-meter long electric ferry is both financially and environmentally viable,
the interest in electric-powered watercraft of all types has grown to an estimated $20 billion global business potential. We are supporting a European firm at the smaller end of the market that is seeking some €5 million to move to volume production of their two-seater sports model and create a water-ready prototype of the promising five-seater ‘car on the water’. Vehicle fans, you have to see this!

Interested? Talk with us today.

  • Reducing waste in the massively wasteful clothing business
A new firm that we are supporting is in the luxury fashion business, not one normally associated with sustainability. However, the firm has developed a brilliant solution to avoid waste in the clothing industry where some 12 million tons of textiles end up in landfills in the US alone every year. Shockingly, some 84% of clothing worldwide is discarded. By enabling owners of unwanted luxury items to sell into the secondary market, this firm is not only avoiding waste but is also enabling re-use of products that, effectively, replace items that would be bought by the new owner. Their business model steps into the center of the rapidly growing resale market which is expected to reach $51 billion by 2023 – some 20-times faster than the ‘All Retail Apparel’ market.

At this time, the firm, having already raised $2 million from leading industry executives, VCs, and industrials, they are seeking another $0.5 million to extend their runway, allowing them to add even more luxury retailers to their already impressive list. This will enable their fully scalable platform to reach thousands of more users. With more than one million USD equivalent of material already available on the secondary market through their platform, their future is very bright.

Interested? Talk with us today.

  • Creating a new investment opportunity – direct investment in human capital

Of course, all investments are indirectly in human capital, although routed through firms. However, a European firm, we are supporting has developed a platform to invest directly in high-potential in-demand individuals, enabling investors to narrowly define their investment criteria and link their investments with proven individuals matching those criteria. These are further linked to investor rewards coming in the form of a fair percentage of the investee’s income for years to come – offering attractive returns for the savvy investor. The volume of investments in such default-protected Income Share Agreements is unlimited, while the firm is also seeking some €100,000 to €300,000 direct investment in shares to power the roll-out. As the firm is a government-defined ‘innovative company’, there are also limited opportunities for direct investors to gain residency/citizenship with an investment (in shares) of €300,000.

Interested? Talk with us today.

Where to next?

While the mania for cash instruments and precious metals as safe refuge investments has calmed somewhat, there is still much uncertainty in the investment markets.

Indices peak rapidly, then drop dramatically as yet another, seemingly unconsidered, remark issues from Washington or Downing Street. Behind all this, the new normal is becoming more clearly defined, and entrepreneurs are continuing to innovate to exploit this new world.

We aim to find those beacons of hope for the future, but our focus will always be in the longer term. The world must become more sustainable, more equitable, and healthier. We aim to help those firms whose products, services, ethics, and culture meet these aims. Investors are naturally wary of untested ideas, but the bold is likely to benefit hugely from low-cost investments in firms who get it right. The Q2 valuation report from Pitchbook tells the story.

We talk to a wide range of new firms – mainly early-stage businesses – to identify the ‘next big thing.’
Interested? Talk to us today.

If yours is a firm that aspires to these same objectives and needs investment, talk to us today.

If your firm is looking for innovative investment opportunities, and find our vision for the future compelling, talk to us today.

We aim to make a difference for firms on both sides of the investment wall; firms and investors that also want to make a difference in the world at large.
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