Impact vs. Purpose: Striking the Right Investor-Impact Balance

[Music] everyone I've been here for a while but good morning to you guys it's great to have you on the panel morning um we were talking about health and wellness and the importance of uh building Innovative impact businesses in more of the health Tech space and now we move more Into Climate um I think the topic of aligning purpose um with profit and building uh purpose-driven goals with financial performance is an extremely important one um there is an expectation of the businesses um over the past years of delivering um you know profitable businesses within the space of trying to save the world which is uh what everyone on this uh panel to a degree or another is trying to do so before we dive into the the panel I'd like the the panelists to introduce themselves and just give a quick brief of uh your businesses hi everyone I'm tal Hassan I'm the CEO and founder of 4401 we are a carbon mineralization company so we take captured CO2 that could be from direct air capture or carbon capture and we turn that CO2 into rock deep underground and generate carbon credits from that good morning it's a pleasure to be here uh I'm Rick Fox co-founder and CEO of partana we're a climate tech company born on the front line of climate change in the Bahamas uh we believe that we can change the way the world builds by avoiding and removing CO2 like T company from our environment uh and uh it's possible for me to be here because of hub71 uh so I want to say thank you to hub71 for the amazing accelerator program we've been a part of and that's led to not only leadership here in the region uh recognizing the value of all of these missions to help add value to our purpose in our planet and our people uh but it it's actually shown through action so we're we're honored to be here hi good morning thank you very much for having me uh my name is Elizabeth I am the COO of Sawa we are a fintech based here in the adgm and regulated by the financial services regulatory Authority we uh originally started in 2017 and moved to Abu Dhabi in 2020 we allow people to uh invest their wealth and have their money grow for them through a number of different products uh through investing saving uh trading and crypto and uh we we have quite a few um different model portfolios that allow people to invest sustainably or allow portfolios um to grow their wealth thank you very much so I think here we have an interesting mix uh of of of perspectives um talal and Rick are on the say like carbon side and like to move into that but Elizabeth maybe we'll start with you um looking at impact from more of a financial side um can you walk us through a bit of swa's story um why do you guys exist uh where did you find the Gap in the market and what are some of the outputs and outcomes that You' found with your growth of being one of the leading fintech um and impact driven startups in in the UAE and and worldwide sure so so we um like I said we've got a number of model portfolios that allow for people to invest based on their values uh so we can either do conventional portfolios SRI Halal um or with trade they can actually build their own portfolios based on what exactly they want we've seen a shift towards um uh uh making decisions more based on on their values and and and you know moving away from the traditional Investments more to things that people believe in there's this huge shift of capital moving towards uh I think people have realized what the um sorry I think people have realized that you know just investing in the traditional has not been good for the world in general and being apathetic to this and not actually caring doesn't make the difference doesn't move the needle so we've been able to facilitate people moving their money towards actual impact projects investing in what they believe in uh and and so that's working quite well actually halow portfolios are probably more we've seen a a move towards more more um people investing in in that uh than even the the ESG portfolios are conventional can you tell us some examples of some of these projects or kind of just taking a step back for the audience uh walk us through kind of the platform and how it works and just give an example or two of these um impact uh or Eco uh projects that are part of the portfolio so so they're not specifically projects they they're a portfolio of ETFs for example with our invest product there are portfolio of ETFs that are either ESG focused sustainability focused halow focused and and then within that portfolio there's different risk levels depending on your appetite um so so that's our model portfolios and people can go in and and choose which one works for them alternatively we've got trade and so if there's specific companies that you believe in uh we see a lot of Buy and Hold with our Traders we do have day Traders as well and swing Traders uh but a lot of it's about buying and holding in companies that you believe in so we've also developed a lot of thematics uh around for example we've got commodity thematics gold thematics where people can go in and easily choose these companies have a look at them and decide what actually they want to participa in thank you Elizabeth I'll move on to the carbon side looking at impact from more deep Tech perspective and maybe I'll start with talal since you've um been in the region um for a while and 4401 um was incepted in Oman um and then you moved to the uee you were hub 71 startup and then uh you closed a a partnership with adnoc can you tell us a little bit more about your journey here and some of the let's say obstacles of delivering impact um um or or otherwise as well like some of the like the challenges and opportunities that you found in your journey here yeah sure so uh so we started in Oman in the height of covid so whilst uh people were Sheltering at home we were a small group of us drilling bore holes in the Omani mountains uh and injecting CO2 into those bore holes these were some of the first CO2 injections in these types of rocks can you can you explain direct air capture 101 for the audience in a very like because it's it's uh in the space we always talk about these terms uh direct air capture pumping CO2 into rocks but just for for dummies uh let's water it down sure so carbon capture is is when you capture CO2 and uh that can be from two main forms either directly from the air which is called direct air capture or in short DAC DAC and the second one is point source capture so this is if you have a heavy industry and they are um they have emissions and you capture some of those emissions or the CO2 that comes from those emissions so those are the two forms of carbon capture and what we do at 4401 we don't do the carbon capture we take that CO2 that they capture and we store it permanently and we eliminate it by converting it into rock so when we started in in Oman that was great and we always had our eye on the UAE uh these rocks which we use uh come to the surface in certain parts of the world uh Oman and UAE being uh a couple of countries with very rich deposits of this rock but what really attracted us to the UAE was the fact but we also excuse me we also had uh access to seawater so we do need water for our process and we had access to solar and green energy which is also required for for what we're doing the talent as well was here in country so we were always coming into the UAE and trying to work here and when we learned about Hub 71 we got in touch with them and we were lucky enough to get on the cohort and that just catalyzed things for us and in early 2023 we signed a pilot agreement with adnoc and that was to deliver a direct air capture to uh mineralization project in time for cop 28 we broke ground on that project in February and we delivered the first injection of direct air captured CO2 in the region in actually all of Asia uh to mineralization on that site on the day of cop 28 thank you tal I'm going to ask you and Rick similar questions in a bit but I'd love to hear about Rick's experience in a more um rck has um with partana has moved to Abu Dhabi just very recently as part of the last cohort they had our fundraising Road show yesterday and uh also very recently partana closed um or announced a partnership with adio um can you walk us through partana what you guys do also 101 um and just your experience so far um in the region yeah thank you uh Dalal your story of covid I think spawned uh your company same with us during covid uh out of the disaster of a natural occurrence in my country uh I service became my journey to climate technology I didn't expect to be in the space uh in the way that I found it uh we're talking about purpose and planet and how we create impact my initial impact intent was to build hurricane proof housing in the Bahamas from materials that could meet the elements I.E flooding saltwater wind and traditional cement does not interact well with salt water and so in just asking that question I found myself going on a journey and if it wasn't for covid I don't know if I would have spent the amount of time that I did even though I wanted to have the impact at home so that afforded me the opportunity to get to know my co-founder the science and the lab the fact that it had been patented uh they had caught lightning in a bottle as they referred to it but they just didn't know how to bring it to the world so when you when you think of how do you bring a disruptive solution to the world in an area where you've been for 200 years uh trusting Portland cement or traditional cement as they call it uh burning rocks and those rocks are now turning that heat is turning against us uh it raises all the questions that our climate technology companies are trying to do right have a seat at the table with a solution that gets the attention of people that say they truly care so balancing that impact with revenues and profits is a hard line right it's a hard line because we take a lot of capex we take a lot of scaling belief you can start a you can start uh at at day one year one take money from a VC partner or an investor who says they're on the on the road for the whole journey and uh if it took 200 years to be uh for traditional cement to be in the world to the stage is that now and development being linked to pollution it's not going to stop we're going to keep developing so you need Believers and impact investors who will go on that Journey with you for the Long Haul and the Long Haul isn't just when their fund is up in three years or four years they have to believe that they can go find other people to join them in making sure that it becomes the solution that Tal's getting to becomes the the Journey of five six seven years when it becomes the impact on both sides of the table thank you we always talk sorry sorry no I would I'd like to add to that I think you said there it's you know finding the the tension between those two I think there isn't tension if you find the right people if you're respectful if you're doing things transparently if you're doing the right thing then that attracts the right investors who come along and support you for your whole journey I I think that's really important and whether that be the retail investors whether that be the institutional investors if you're doing things authentically then you're going to attract the right things um that's just how it is sorry Zan I have to say this you're absolutely right about that because on our cap table and our LPS we have investors that are actually engaged in solving the problem with us that is key they are they are in the actionable side of this business and so we appreciate that but you have to find the ones that not only care not only can fund but they actually participate I absolutely agree I think in in the climate space as I was saying earlier there's a a goal that's larger than time and life right it's it's kind of a longterm we'd be lucky if we had our kids see it like when we're talking about decarbonization it's setting these macro goals that we need different stakeholders to come together and and push forward and I think climate is one of those a topics again um I always say it's quite horizontal you know it it's not just its own um bucket of things it can be looking at Carbon is also quite horizontal so everything around us is climate related to a degree or another are theying from supply chain to production to buildings to food AG water uh protection of natural ecosystems and that is becoming more and more apparent and as much as I think building getting the right people so whether that's building teams and finding the right investors that have conviction and belief of these ideas um climate texti faces a big challenge uh from the investment side which I'd like to speak to um talal and Rick about and the challenges of how do you ex how do you your Technologies require up upfront investment and they're very capex and uh Opex heavy and when you look at the scalability of them from setting up the first plant um it it requires a lot of capital um can you walk us through some of the challenges and how you pitched investors um to have conviction in something um in a later stage let's say so maybe you have the angel investors on your cap table when you're trying to scale um what have your perspectives and experience has been um in the climate Tech space and the challenges as well I'll go first okay so um yes it's tough first of all it's very tough when when we first started the market didn't exist right and um there there was no such thing as the market and this is Venture Capital 101 what's what's the market size what's the Tam there was none and I think that's really important to not for us it was the purpose you know we got together as as uh myself and my co-founders and you know actually just a quick hands up here does anyone here have children quick hands up yep so when we figured out that actually our children will not have a planet that they can hand over to their next Generation that they could predictably live on and thrive on that was the purpose that's why we set up 4401 there was no Market data there was no Market size and we've slowly kind of developed the technology and now we've come to uh look at look at profitability and look at how we can bring investors in and now we do have a market size you know people have come out they've set Net Zero targets there's the IRA out of the US that's uh incentivizing carbon credits there's the voluntary markets there's the 45q there's the European cbam and all these different policies tools mechanisms have effectively created a a financial opportunity out of something that started with purpose I mean we all knew that eventually there would be a price on us having a planet that the generations the future Generations can pass on to each other um and just to give you a snippet so now when we pitch to investors it's very different from from uh four and a half years ago when we first started but uh now we show them okay last year as a planet we only sequestered 50 million tons of CO2 um today there there's a bunch of data out there showing we need to increase that by 100 fold and that Gap in infrastructure represents a multi- trillion dollar opportunity and that's where we play but just to add one more thing I think it's really important to highlight that we are not sitting here saying that we're the Silver Bullet we're you know going to do this ourselves we need companies such as partana we need every tool in the toolbox out there because this is is an either we all win or either we all lose situation you're not going to have Market leaders popping up which is you know typically the The Venture Capital model where they look for the leaders you're going to have a big group of companies that are able to to make an impact and we need to get all of them to revenue generation and profitability as quickly as possible I agree with that go where you want it uh for this for this Journey we've been on we've we've chosen to spend the time with the people the countries places that not only need us the most uh they don't have the time to to wait uh for example in the Bahamas where I'm from We're slowly going under water so the urgency there speaks to Solutions needing to show up today not in 2050 not in 2060 uh so spend your time with uh those that are urgently seeking Solutions uh and you will find greater ease in Partnership around funding uh we started in some cases in my I had access in the Bahamas so we started at the top we went to the leaders of the country uh same thing in any country we go to business to to G business to government in the case of disrupting any uh industry at scale you need Buy in from the top uh when they understand the vision and they can see the scale of it and they can understand the impact it has for their people in their region in the country uh they will start to Force action and so when governments move private sector adjust citizens get impacted and in our journey we found here in the in the Middle East in the UAE especially here in Abu Dhabi that it's not just talk we spent a lot of time in the first few years educating our the people across from the table educating the money and getting them to believe that this journey of of $400 billion uh addressable cement Market could be disrupted or that there could be a seat at the table for alternative binders and solutions uh that need to be implemented at whatever scale of cement is being used in that country maybe a small portion of that could be an alternative binder that moves us towards making healthier more nature Positive Solutions in the area of concrete so if it wasn't for cop 28 here last last year I wouldn't have known of the Region's commitment at the scale that they're committed to and so you spend the time with the people that are in action you spend the time with the people that aren't just doing the talking they're changing the legislation they're calling for uh and stressing the the private sector to make better decisions and then they will find companies like ours because we become the branch to deliver what the private sector is going to want which is the end end goal which is to make money while making impact I totally agree I think a hybrid of or a top down bottom up approach and there's a sweet spot in the Middle where you know the different stakeholders come together and I know both of you very well in your companies and I think the challenge that you have is is is really huge because you are the the Trailblazers you're the Pioneers you're Paving the way for these first of a Kind Technologies um and it will be easier you're making it easier for all of the similar other technologies that are going to follow your path right you're drisking the path both from a technology point of view as well as an invest point of view um I'm sure we don't know what it'll look like in 10 or 15 years but we've walked into the abyss and every so often we bump into other climate technology folks and it feels a little more real and and uh we can hold on for a second and go okay I'm not alone and this crazy idea but you're absolutely right it may be the next person uh I remember 4401 so I'm an ex-f founder as well of a climate Tech startup and it was also a covid story it was not in the Deep Tech space it was a SAS for Enterprise SAS for carbon accounting and Tal's co-founder um uh Karan is a good friend and we were both on zoom and he was like I started a company we're taking CO2 pumping it into rocks and he sent me this deck I was like um helping save rainforest like okay great so I guess Co was um you know ultimately in retrospect really good for the planet uh gave everyone a minute to pause and look for Solutions but made everybody vulnerable yeah everyone became you know went back home and thought about purpose which is the main um topic of this panel but um since then there was another company called clim works and it was 441 and that was four a bit a little over four years ago and now with our climate Tech um when we're you know doing our applications there's probably over a dozen companies that do exactly or similar things so it's really inspiring and it's a big challenge to take to be like the first mover of a certain technology ology but you're doing a huge favor for you know the market to shape up and the appetite um of of the different stakeholders whether it's government or um um investors Venture investors institutional investors to take um to take note of um I'll switch gears a little bit to Elizabeth um and I'm curious to see from the investor um point of view what shifts have you seen uh from an investor demand for more purpose-driven Financial products and um how has sua um adapted to this and do you also see a first mover in this direction where other companies are following yeah for sure so it's not necessarily a shift it's more a reoccurring theme that we see uh again I spoke earlier on our different portfolios but what we're seeing is people are actually they're they're um seeing demonstrable action uh and actually moving their money and their Capital to where they want to see to Industries like this um and and focusing on good purpose uh that's that's what we've seen and we're growing with our clients as well so as they become more sophisticated we have an excellent education program as well um as they become more sophisticated investors we also add products that support what they need um and and D risk as well in terms of you know the products that we're adding uh we continue to grow we're focusing very focused on our local community here in the UAE we're born and bred here we're focused on the UAE Market uh before Geographic expansion or anything like that you want to make sure that you're supporting Your Community First and and that's what we do so as our clients are growing we're growing as well adding products adding adding different uh things from for example we recently launched options where we're launching uh a Black Swan fund to to um protect uh these things are what the clients are asking for so if you focus on that uh and and listen to to your customers like you said listening to the governments that actually want what you want uh and are taking the action so when you supporting that that's what we're we're finding yeah I think that's a interesting segue to my another point I'd like to ask uh all of you which is the the power of like storytelling and positioning and the the power that Stories the story of this larger purpose has in climate Tech um another way to see it is like your pitch right how are you pitching this investors how are you positioning the return which is not necessarily Financial return um can you share some experiences with the storytelling on um you know your different companies and what worked what didn't and if you have any advice for climate Tech entrepreneurs in the audience uh how do you convince them I would tell you if you're a climate Tech uh entrepreneur and a Founder well first of all you don't have time to be worried about being an impostor or having impostor syndrome there's no time for that there's too much urgency I had the I had a challenge coming from professional sports I I'm not a material scientist so what's you know what's a chance is that someone's going to believe that I have potentially a contribution or a solution to the industry of cement uh so I had to get past that barrier of getting the getting past the questions about basketball or what is Rick Fox doing in concrete uh and it wasn't until they understood that the urgency for me was survival for my own family and the impact of having experienced what that looks like on the ground firsthand so you tell your personal experience of how climate change has impacted you and then they realized that through covid if Co was something that impacted the entire world and made us all feel vulnerable uh climate change is the same it's impacting all of us whether you're feeling it on the ground or not it's happening right it's moving towards covid heart attack climate change cancer it's under the surface and it's moving right and so it's not until you realize that it's uh your own personal experience with it does it collect and con and connect and then you just build a team build a team of experts Excellence scientists that that check all the boxes that say okay if you're not the material scientist you've went and built a team of experts and so then they can relax into that then throw yourself into all the possible testing and challenging they would give a company that's a climate tech company you say you can do XYZ show us because at the end of the day people want to touch feel see and believe that it's real and when you get past those points then the story starts to take a momentum of its own and you no longer have to show up and answer basketball questions you show up and answer questions about cement and uh and so that Journey isn't overnight but uh it is a personally anchored Story in real impact that you've experienced yourself and that has launched you into a purpose-- driven uh fight because that's what this is It's a Fight day-to-day to keep our businesses alive to find the right people that enroll and join join Jo Us in the fight but then to have those that are outside looking looking at us on the uh to join that mission and be a part of the fight I I think that's brilliant Rick's absolutely nailed the storytelling piece um I'll probably talk more on on the uh pitching on the financial piece so I come from a venture capital background I was a venture capitalist prior to this uh so I have an unfair Advantage there um but you know when when we go and we pitch uh there's there's one thing which I wanted to highlight which I've noticed over the last four and a half years that that I've been at 4401 is kind of the definition of near-term returns has changed um when you know when I was in Venture uh climate Tech funds were typically uh the 10 plus one plus one years so 10year funds and now they are at least 20year funds and that's a really interesting Evolution I think in clean tech 1.0 everyone went through that long cycle and uh they did make decent returns at the end of it and they've now adjusted their funds I remember I was in Silicon Valley and I met with one of the big Venture funds that was in climate Tech and they had a bunch of data over the last couple of decades that showed them that had they held on to their Investments uh their ret tenure fund had they held on for just three more years years they would have had a double digigit increase in irrs on their fund so I think that uh those data points are out there and people are starting to and these funds are in climate Tech are starting to look more um more longterm which I think is important for me the other thing is um being a venture capitalist uh previously I would love to see laws regulations um governments getting behind things and we're starting to see that now with all these Net Zero targets and the uh incentives that we were talking about earlier um these give investors security they know that okay a law has been passed and this has to happen and I think that's something which has really helped us with combining the storytelling with uh the fact that a financial return is on its way yeah I think you uh you're pointing to a very important piece that we we didn't really dive into this this session which is the regulation right and uh how regulation pushes or incentivizes um you know investment and uh looking at allocation of capital and I think this is a very important piece for the panel we had before for health Tech and climate Tech um which is kind of I would say the this is this is not me this is Patagonia but it's the Golden Triangle of purpose people and planet right uh that's like the triple bottom line and this is another um as we've heard from you guys and the the health Tech panel I think the uee is very interesting for kind of innovating new policies and regulations and that be makes it a very lucrative place to set up something that's more you know risky or challenging or higher capex or Opex because it it means that there's like a Sandbox environment um for pushing new regulations that would be very difficult to do in more Legacy um and institutional Market such as the us or Europe as advanced as they are right so it's kind of an irony Europe is extremely reg well regulated but that regulation is almost a double-edged sword because it also um prevents it kind of guards Innovation but it prevents growth in a way so how has your experience been uh from Switching gears a little bit to uh the regulatory point of view both from you know SWA perspective patana with your Eco Green cement and you know with 441 I I'll speak quickly to The Experience on the ground here in Abu Dhabi uh hub71 has been a an amazing uh partner in opening those doors through the value creation team connecting us to the stakeholders in government connecting us to the private sector you know at the highest levels making sure they know our story understand that we're here in the country and what the impact we can have uh the ministry of energy I've had the chance to to share our story with them the understanding of what the brine uh and Wastewater challenge in this country represents for for the UAE and the fact that they're looking to solve that problem and get to a zero liquid discharge understanding our technology and what we do how we can take that Brine and convert it to a an upscale it to a positive feed stock for good to solve another problem which is a binder that we can make a concrete that is actually avoiding all the Nega negativity of Co CO2 and then also sequestering in a direct air capture fashion more CO2 you know once you understand that then the question comes across the table of which is What legislation should we be creating and when you hear that question oh my gosh like you feel you feel like you have a partner and when the partner's in the position to actually make those changes then you can get the real traction that you're looking for and uh and so kudos to to the leadership here because they actually taking those actions and asking those questions I I would agree with that in the financial services industry here the um fsra are absolutely amazing at doing public Outreach and consultation papers and actually listening to what the firms need and and what would be the most supportive I find adgm to be one of the more Innovative uh Regulators around here um and and that's why hence why we've moved as well uh and consolidated into our adgm entity uh there's a lot more freedom here uh with a lot of guidance as well which is really appreciated yeah if I could just give a a real life example appreciate we're out of time but um so with what we do that there has to be some regulation you know we it's quite sensitive we're taking CO2 we're putting it deep into the subsurface it needs to be monitored it needs to be verified and we recently had uh legislation that came out in Europe it took them years to work on that and it finally came out we had pretty much the same rules drafted up for us by The Regulators here in a matter of months so you know it's months versus years and it just Echoes what the experience has been here on the panel that people here communicate they understand they work collaboratively with multiple Ministries authorities and they just come up with something that's purposeful and useful for us well we could go on for for hours but uh the panelist will be will be around in case you have any questions uh I want to thank you so much for your time and for you know building a purpose-driven businesses of the future for you know the planet for our kids um thank you so much for joining us and um yeah keep safe saving the planet thank you round of applause for the audience [Music]