Today, I have the honor to introduce you to Terhi Vapola, Vice President of Helen Ventures. Helen Ventures is the investment arm of Helen, one of the largest energy providers in Finland.
We discuss Terhi’s journey of becoming an investor, the ongoing colossal energy transition, the nature of corporate venture capital (CVC), and much more.
⚡Introducing Helen Ventures
Helen Ventures is the investment arm of Helen, one of the largest energy companies in Finland. Founded by Terhi Vapola in 2019, Helen Ventures has an investment scope of €50M and invests in early-stage startups in the energy sector in Europe and Israel. So far, Helen Ventures has invested in seven startups (check out their portfolio here).
Within the energy sector, Helen Ventures has six investment focus areas:
Circular economy, and
Energy sector-related digital tools
🧠Wisdom from Terhi
What does your journey to become an investor at Helen Ventures look like?
I’ve been a founder and CEO of a startup myself and fundraised from investors for the startup. It was then that I felt that it would be rewarding to work as an investor and bring value not just to one but several companies. It was evident that an investor's work is paramount and that a good investor brings much more than just money to the table.
Before founding a company, I worked with startup partnerships and acquisitions at Nokia. In this role, I got to see the other end of the fundraising spectrum.
My investor career started as an angel investor already years ago. I currently have done over 20 angel investments in startups.
Having done some time angel investing, I began to lead a seed investment firm called these days Green Campus Innovations, associated with LUT University. The Green Campus Innovations focused on university spin-offs from LUT University. The spin-offs were in deeptech, green energy, and sustainability fields. After that, I became the CEO of Springvest. Springvest is a generalist investor, but we had a strong focus on sustainability and purpose.
Finally, Helen contacted me and asked if I wanted to set up an investment arm for them. Helen had launched a new corporate strategy and outlined that it needs to access external innovation to undertake the colossal energy transition. By external innovation, I mean innovation that happens outside Helen, such as in startups. By forming Helen Ventures and investing in startups, Helen can access the market development, insights, and innovations developed in startups and help thereby fulfill the corporate-level strategy. Reciprocally, Helen can help accelerate the growth of these startups.
How is the energy sector going to achieve its energy transition?
The energy transition is a systemic change, and the solution will consist of multiple innovations. There is no silver bullet, as the industry needs more innovation on top of renewables like wind and solar energy. Furthermore, there is a big wave moving towards the electrification of the mobility sector, bridging multiple different industries.
In the short term, we have to largely rely on existing energy technologies to start making the energy transition. Novel energy technologies can take a long time to reach the required maturity, more than 10 to 20 years. We don’t have time to wait but have to start the transition now. Therefore, I believe in the power of digital solutions to, for example, help balance the grid when more renewables are added to the grid.
Grid balancing is one of the central challenges in the energy sector. When more renewables (solar and wind) are added to the grid, there is a risk of imbalance. If there is only little wind, the wind turbines will produce little electricity. However, most of the times customers won’t or can’t wait for the wind to start blowing but want the electricity immediately.
In the long term, there is a possibility to implement radically new energy technologies, such as fusion, to the grid.
What kind of solutions would you like to see on the market?
There are three areas where I’d like to see more innovation: 1) Energy efficiency, 2) Individual’s and corporates’ engagement in climate action, and 3) Carbon removal.
The energy sector has a clear incentive to adopt solutions to energy efficiency. The more energy we save, the more money we save.
Also, the market opportunity is huge. Take, for example, the energy efficiency of buildings. Only this market is multiple billions in size.
2. Individual’s and corporates’ engagement in climate action
We have a new generation that understands that infinite growth and consumption are undesirable for the planet’s sake. This generation is motivated to take climate action and want to have a green lifestyle. There still exists a huge market opportunity for catering to the needs of these individuals. Furthermore, corporates need to take their climate action too. The first steps are through carbon accounting, followed by clear measures to improve things in their value chains.
3. Carbon removal
We have already put so much greenhouse gases into the atmosphere that we have to start removing them. We need technologies that also remove the existing CO2 from the atmosphere.
Helen Ventures is the investment arm of Helen. How do you differ from a traditional VC, and what is similar?
There is no one model for Corporate Venture Capital (CVC), as there are many reasons for forming a CVC (If you are new to CVCs, read more about them here).
At Helen, the need for building a CVC fund came directly from its corporate strategy. Helen had identified that it also needs to access external innovation in startups to keep the required speed in the energy transition. Forming a CVC fund was Helen’s answer to this, which helps both Helen and the startups to accelerate towards the future.
We at Helen Ventures invest thematically in startups in the climate tech and energy sector. Within the sector, we have identified six focus areas: 1) Renewable technologies, 2) Smart grid, 3) Energy efficiency, 4) E-mobility, 5) Circular economy, and 6) Energy sector-related digital tools. As long as we follow this focus, we also simultaneously drive Helen’s strategy forward. Otherwise, we work like any other VC fund when analyzing startups and making investment decisions.
The biggest value-add comes from the networks we can offer to our portfolio companies. We have extensive networks in the energy sector, which the startups can utilize to gain customers and revenue. We call this model “VC with benefits”. Furthermore, we know the energy sector well and can easily understand also more technical and complex startups.
What is your advice to startup founders in the energy sector?
1. Establish a clear market position
Find a clear position on the market where your startup can become the category leader. This is obviously applicable to not only energy startups but all startups in general.
2. Be as independent as possible
The energy sector is notoriously conservative and slow in making changes. Thus, I would advise bringing a solution that is possible to be scaled as independently as possible. In this way, your sales cycles are not only dependent on the big corporations in the energy sector.
I am a big believer in digitalization in the energy sector. Often, I find that the default in energy innovation is to focus on novel energy generation technologies. But there is so much that digital solutions can also do. Digital solutions are usually faster to bring to the market, faster to scale, more capital efficient - and an area where startups have traditionally excelled.
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Next week, we will continue with the energy theme!⚡