Why it is time for greater Sustainability in Green Tech and Finance

Interesting interview with Arunkumar Krishnakumar and his decision to move into backing sustainability and environmentally positive projects with his new investment company.

What is your background briefly?

I am an engineer by education. I started my IT career in India and moved to the UK in 2005. I did my post graduation in the UK at the London School of Economics, and also a Post Graduate Diploma in Global Business from Said Business School. I spent over 7 years at Barclays capital, and a couple of years at PwC’s data analytics practice, focusing on Chief Data Officer Advisory and data policy related propositions.

However, I knew I wasn’t enjoying my corporate career, partly because I was not the most subordinate employee, but partly because I couldn’t put up with the energy levels (or the lack of it) in corporates.

Over the last 7-8 years, I have worked to get into the Venture capital industry. I liked technology, but I always liked to see the so-whats of technology. I like to see the energy, perseverance and the passion that I find in entrepreneurs I meet every day. I am currently a VC at Green Shores Capital, which is my second fund. In the last 12 months, we have closed 6 deals through the fund, and I have managed 3 deals as an angel investor.

I love writing on innovation, especially where there is a strong social/environmental angle to it. I have been writing on Daily Fintech for almost three years.

I also have set up a podcast alongside Theodora Lau, Bradley Leimer and Efi Pylarinou where we discuss innovation stories with a purpose. We are into our 5th season of the podcast. We have covered Financial Inclusion, Innovation for Older adults, Diversity and innovation in Asia.

The importance of Sustainability in Green Tech and Finance

Does it seem like a logical background to what you do now?

My Technology background has been a major asset. For example, this year alone, we have had a close look at around 400 startups. My tech education and data experience through my corporate years definitely helps in double clicking through some of the deeptech firms we look at.

The other aspect of my background that perhaps is having a large influence on where I am going with my career is my home town. I was born and brought up in a very picturesque part of south India. About 8 kilometres from the border between Tamil Nadu and Kerala, with the scenic wester ghats and its waterfalls visible from our terrace. I almost took all that for granted, until I was asked to do my higher secondary schooling from Chennai – a pretty hot city.

Until that point, I had taken my life close to nature for granted. Since then, and more so in the past few years, I have started to understand the value of a life close to nature. That is definitely affecting how I assess my investments, and plan my career ahead.

Forget the #cybertruck, we are going to see an e-bike decade!

130 million e-bikes to be sold between 2020 and 2023 in the US as per a @deloitte report#SDGs #innovation #environment #climatechange @sallyeaves @psb_dc @leimer @jalloyd4 @arikring https://t.co/ZT2XH2LibW

— Arunkumar Krishnakumar (@Karunk) December 16, 2019

1 min pitch for what you are doing now?

– Actively investing through Green Shores – ideally 10 more investments in 2020.

– Writing and Speaking careers will focus on sustainable innovation, environment and climate tech use cases

– I have a book that I am working on, and hopefully that should be a Q1 launch too.

– I am also going on board of trustees of an NGO in India focused on water conservation, called Aram Foundation. I am pretty excited about that too, as there is a huge challenge and an opportunity to solve a real social need, both in terms of awareness and infrastructure.

Why did you get involved with investing in general & how do you assess potential value?

I wasn’t a very good developer, so had to do something else. On a more serious note, it 2011 when I realised my career in Banking IT wasn’t taking me anywhere, I wasn’t passionate about it either. I didn’t know what else I wanted to do. I spent a year interviewing over 50 odd professionals who were investment bankers, traders, risk managers, VCs, researchers etc.

I realised I wanted to be in deal making – assessing an investment opportunity and investing was what I felt excited about. I asked about a day in the life of these professionals, and I knew VC was what I wanted to be. Since then, I started working on becoming a VC.

There are several techniques to assess a startups’ valuation. You can pump in as much science into the process as you want, but at an early stage it is more of an art to figure out a companies value. There are several qualitative and quantitative aspects that go into valuing a firm. But the most common way to do it is using comparables. This year alone, I have looked at over 400 companies, and through the last 4-5 years I would have looked into over 1000 companies.

In doing so, you end up building a barometer on your head. After an hour of meeting a firm, generally most investors have a sense of, if a firm was overvaluing or undervaluing itself when compared to what is going on in the market.

It is however tricky when we try to deals in India or in the US, as the scales are slightly different.

Now you are moving into more environmental / sustainable projects, what new criteria will you apply?

We have tried to keep a large portion of our deal flows in 2019 sustainable. About 84% of our deals (as per November 2019), had an SDG alignment. So that is almost 320+ sustainable deals we have looked at this year. We will continue that next year. However, my commentary on social media has not been as focused on sustainable finance, environment tech or climate tech in 2019. That would change in 2020.

Tell us about the upcoming book, why did you decide to write it / what is it about?

As per my plan for a book, I had it in the roadmap as a 2020 task. However, it so happened that a publisher found an article I wrote interesting and reached out to me. We started talking and because of my deeptech/sustainability focus, I wanted to try and cover as much of the two areas. So I zoomed in on Quantum technology and Blockchain. I am not a physicist, I don’t have a Ph.D. in Physics, Maths or even computer science.

The focus of the book had to be touching upon the key technology themes of these two technologies, and then focusing on the real world impact they could have on our lives. I have interviewed entrepreneurs, researchers, industry players and people in academia, to provide their thoughts as well.

How can people find out more about you personally & your work?

I am not too active on social media from a personal perspective. I do have a FB profile, it was dead for a few years, now I have partly revamped it for Aram. I have started using instagram for nature pictures and climate change themed pictures. Apart from that, I am an introvert, and like to keep it that way. For my business activities the following are the best way to learn more.