On Thursday, Hackquarters, on 21th of July, we held the 3rd online meetup at HSBC Sustainable Growth Programme. During the third online meetup, we discussed Investment Perspectives in ClimateTech & Social Entrepreneurship to raise awareness for Climate Action and Technology.
The meetup started with Hackquarters Founder and CEO Kaan Akın’s speech on the details of the Program, Climate Action, and social entrepreneurship statistics. 350 startups have applied for the Program since 2020, and 31 were selected for the three batches.
According to TechCrunch, more than $40 bn was invested in ClimaTech startups in 2021. There were more than 600 deals. There are 47 unicorns in ClimateTech Globally. In 2021, 39% of the global social entrepreneurs received outside investment, where 65% raised over $250k, and 17% raised over $2 mn.
Following Kaan’s opening, in the Fireside Chat: Investment Perspectives in ClimateTech and Social Entrepreneurship moderated by Umay Yılmaz, Secretary General at Corrugated Packaging Association, the participants were İlkay Demirdağ, Head of Investor Relations at Enerjisa, Can Atacık, Founder at Alethina International Investments, and Namık Kural, Founder at TRAngels. Umay opened the chat by emphasizing business world must adapt itself to environmental criteria as suggested in EU Green Deal. To sustain their businesses, companies started to take action against climate change. This creates new opportunities for entrepreneurs.
Then, İlkay highlighted, “ESG has become a crucial part of our daily lives. People raise their awareness as climate change affects our daily routines, such as the current heat wave. Companies have just started to put ESG on their agenda, which also influences the investment realm. The main factor behind that is states’ actions against the climate crisis. New regulations like Paris Agreement and the EU Green Deal force companies to orient to new dynamics. This makes impact investments mainstream as new regulations create enormous entrepreneurial opportunities.”
Can added, “According to Y Combinator, for a startup to be commercially successful, there are 6 factors related to the problem it is solving. The problem should be popular, repetitive, growing, emergence, expensive to solve, or imperative. For Y Combinator, a startup must solve a problem that meets 2 of these 6 criteria. Climate startups are meeting all of these 6, which makes them commercially attractive. Also, we have alternative-flexible financing opportunities in impact investments. For example, we give a right to founders to buy our investments back. They can buy our shares from us with 2x-3x multiples. Sometimes, we give this right to employees. This creates a new kind of belonging and increases their commitment. We also benefit from these models as we can forecast our exit opportunities in advance.”
Lastly, Namık Kural shared that his feelings that impact investments are more emotional. “Emotional factors are at the center when considering a social enterprise because the problems social entrepreneurs are solving touch our feelings. 3-4 years ago, we saw social entrepreneurs trying to solve problems that did not exist. They were emotional belonged to their startups, but they did not solve real problems. This has changed over time. We are seeing social entrepreneurs touching real problems and having commercially scalable businesses today. Also, fund investors are return-oriented professionals. We, angel investors, have feelings about our investments. We have emotional belonging to startups we invest in. I always invest according to the founder’s personality and commitment. My priority is founders while investing.”
After that, Sabina Babayeva, COO at Hackquarters, moderated Fireside Chat on the success stories of our two startups. Duygu Yılmaz, Co-Founder and CEO at Biolive, and Buse Berber Örçen, Co-founder and CEO at Nanomik, shared their thoughts at the fireside chat about their journeys. Regarding Sabina’s investment process question, Buse told us, “We had a chance to meet many investors thanks to mentorship sessions in the programs we participated in. We did not have a problem with finding an investor. Choosing investors meticulously is crucial for a startup. It is a strategic move. It would help if you chose your investors wisely because they will participate in your company; they become your stakeholders. Chasing smart money plays a significant role in your entrepreneurial journey. We prioritize working for our vision (rather than investments) to make it real.”
Duygu stated, “When we started to look for investments in 2014, our job was too hard. It was before the era of the Paris Agreement and Sustainable Development Goals. Investors had more of a commercial focus. We benefitted from state supports a lot. Searching for smart money is essential for your startup’s progress. We have a great group of angel investors. They are supporting us for the topics they excelled in. This contributes to your business deeply.”