It’s Becoming an Investment Risk not to be Exposed to Impact.
“It’s becoming an investment risk not to be exposed to impact.”
“Decarbonizing the economy is the biggest purchase order in the world. It’s waiting to be filled. This is to us the biggest opportunity, precisely because it has the biggest impact.”
Jørn Haanæs with Katapult shared his impact story as part of our micro-podcast series, originally recorded at The Global Impact Investing Network Investor Forum in Copenhagen.
Katapult is impact driven, seed stage, with a track record but no geographic boundaries: They’ve invested in 169 companies in 47 countries – with 4 unicorns in the same portfolio.
“I think a lot of European pension funds are leaving returns on the table by not having more invested in venture and private equity.”
Podcast Transcript
Jacob: [00:00:00] All right. We’re here at the GIIN’s Impact Investing Forum in Copenhagen. And I’m here with the founder of Katapult. No?
Jørn: I can’t claim that much, but a big part of it now, at least.
Jacob: Yeah. So why don’t you introduce yourself then?
Jørn: No, thank you. I’m Jørn. I’m the investment director for Katapult. I run the Katapult climate investments team. What I do is essentially look for seed-stage climate startups and try and invest in them. That’s what Katapult has been doing since 2017.
Jacob: Do you have a geographical kind of constraint to your focus or?
Jørn: No, so this is the weird thing. Most people we meet are very focused. We are focused as well, except we have 47 countries in our portfolio. We’ve invested in 169 companies since 2017, which puts us as an outlier, I think, among all the GIIN participants. But there is a focus here. The focus is on exceptional founders at pre-seed and seed stage with impactful solutions.
That’s what we do. I would say the main part of our investments right now are in Europe, but we’ve actually launched a [00:01:00] dedicated Katapult Africa fund as well, that will only invest in African companies.
Jacob: Oh, fantastic. How did you get involved with Katapult then?
Jørn: So my involvement with Katapult was that I met the founder Tharald Nustad at a conference in 2016. He was about to set up Katapult as an operation. He talked to me about it. At that point, I had just sold a startup that I was running. And so I was transitioning to a new role, trying to help other startup founders and investors in the sustainability space. And he was talking to me about this next thing. So I was all about sustainability and he said no, it’s impact. I did not understand anything, but his mission was just awesome. He was talking about what he was going to set up from Oslo as a global operation. I figured, okay, maybe he is crazy, but I need to be part of this thing.
I thought that mission sounded awesome. I kept in touch, I was a mentor and partner to Katapult, and a few years after, I got the opportunity to join, so I’ve never looked back.
Jacob: Oh, [00:02:00] fantastic. So there are so many opportunities spaces for investors to put their money, especially now where it’s becoming much more of a crowded space and people are jumping on the bandwagon. Why invest in Katapult? What’s different about you? What’s your unique, selling position?
Jørn: Two angles to this Our angle is that we are impact-driven, early stage, with a track record. We have two impact unicorns in our accelerator portfolio, and Tanal has also made two other direct investments at seed that have turned into unicorns. So four impact unicorns from the same portfolio. That’s relatively unique in our space and it’s a testament, I think, to the fact that we’ve done this for a long time.
We’ve actually been active in a field-building entity in this space. So that’s one reason to invest in and work with Katapult. The other is if we look forward look at our target here, that’s early-stage climate tech. So climate tech, we are talking about energy, mobility, the built environment, enabling technologies, hardware, and software seed stage.[00:03:00]
I would say if you do not invest in decarbonizing the economy in the coming decade, what are you looking at? This is to us the biggest opportunity, precisely because it has the biggest impact. It is the biggest challenge. This is the thing we need to focus on. And we’re entirely focused on that. We think that this is simply put, the biggest investment opportunity in the world.
It’s the biggest purchase order in the world. It’s waiting to be filled. This is the biggest opportunity. There is no sacrificing returns because of the impact mission here. The returns and profit will come because of the impact.
Jacob: Fantastic. So what’s the biggest challenge you face? What’s the hurdle that is in your way?
Jørn: I think one big hurdle is the inherent inefficiencies in capital allocation. So it takes a long time to set up funds. It takes a long time to build up trust, to find asset owners. And you would also say that, especially in Europe, I think, many asset owners and allocators, especially pension funds, are, I would [00:04:00] say, dramatically under-allocated in venture and private equities.
This is not so much of a case in the U. S. where there is a long-standing tradition, the endowment model of investing in a relatively large portion towards venture and private equities, right? Whereas in Europe, much more is later stage focused and public markets oriented. I think European pension funds are leaving a lot of returns on the table.
Not only that you’re missing out on the opportunity to back the next generation of founders, right? So if we want to do something about the anemic growth of European new, big startups and companies. We should actually at least try to support the founders that are coming out. So I would say asset allocation at later stages.
It doesn’t mean that the venture is fully scalable. You cannot automatically deploy ten times the amount. But you can deploy at least two times the amount. And you can just dramatically increase the access to capital at every stage. Because the founders are [00:05:00] there. And the managers are there.
So if we together can build a trust among asset owners that yes, this is investable. There is no question of venture is an asset class you can bet on or not. This just works. This is investment grade and it gives you the returns. If we can do that, then I think we’re solving that part of the bottleneck.
The founders are there. Solutions are there.
Jacob: So what were you most hoping to get out of the GIIN this year?
Jørn: GIIN is amazing in the sense that every decision-maker we need to speak with are in the room. Or someone they know are in the room. And that’s just, that’s a superpower that this conference has. And we heard that 60 percent of participants here are new as of this year. Which you can interpret in a few ways.
One is to say that impact investing is gaining a lot of mainstream attention from asset owners. You know that although they might not be impact-driven their constituents or stakeholders or people they come across will be [00:06:00] and they need to understand what is going on here. Not only now to serve some PR purpose in a marketing spiel, but actually to deliver returns to their LPs.
It’s becoming an investment risk not to be exposed towards impact. And I think that’s an interesting development. So we’re seeing this now, our field is being professionalized which is good. Gathering public market attention and becoming mainstream, which is a success.
And if impact investing is more or less popular in five years, I don’t know what’s important. What I know is important is that we’re backing these founders, whatever you want to call it. And the attention and scale of this thing. I think shows that’s happening.
Jacob: What advice do you have for an early-stage founder that maybe has a relevant kind of product, but needs to get the attention of a Katapult or others like you?
Jørn: There is an inherent tension for early-stage founders, right? I used to run a startup and I don’t think I understood much about VC. One thing, for instance, is to try and understand the incentive of a VC. The other thing is that the more time you spend [00:07:00] fundraising there’s a chance you spend less time actually getting customers.
And if you spend all your time fundraising, you might not get funds. If you spend all your time building customers, you will for sure get funds to be invested in you. So that is a surefire way. Just make sure that whatever you build, the product or service is loved by a small group of customers and then you can expand on that.
If you have a large group of somewhat interested customers that have paid once or twice, not hot, small group, super, super nice. So the best advice to a founder, really at any stage, but particularly early stage, build stuff that people love. That is the Y Combinator mantra.
They’re the world’s most successful early-stage founders or investors and founding backers. So I think that’s good advice for anyone to follow.
Jacob: Yeah. How can this community support what Katapult is doing? What is it that you need right now or that would be of service to you?
Jørn: We are a network-based organization. Our impact really follows an exponential curve to the [00:08:00] amount of nodes that are in our network. The more people know about our mission, the more people can recommend a founder visit Katapult to see if we can back them and be part of them. The more co-investors we have in our network means more investment opportunities for the companies to raise further capital to go on to deliver on impactful missions, right?
So there is something about that. This thing is a virtuous cycle. So I say just open up the network. It’s really not about a zero-sum game with an impact investing. This is about making impact investing ten times bigger, right? And so helping everyone to just scale our operation. And I think that’s something we do much easier by collaboration.
Collaboration is the key here. We’re not competing against each other. We’re just competing against… boring stuff like real estate investments or interest funds or something like that.
Jacob: So if someone was interested in finding out more or contacting you, what’s the best way for them to find you online?
Jørn: You alluded to my name. There’s only one person in the world that is named Jørn Hånes at Katapult and that’s me. We’re pretty easy [00:09:00] to find. Katapult.vc will tell you mostly about our mission, and our portfolio and it lists the team with contact information and everything.
And we do love it when people get in touch. When you are a founder building you’re a co-investor looking for opportunities you’re a potential mentor in the making or you want to look at our portfolio of funds, get in touch. We’re open for business.
Jacob: Fantastic. Thank you so much.
Jørn: Thank you.
Jacob: Appreciate it.
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