Battery Insiders Reflection - Battery Investments

0:00Transcript

0:00Welcome to Battery Insiders, your podcast providing you insights and the fascinating world of batteries. Hosted by Bhavya Jha and Simon Engelke. And we're back after our 62nd episode, Simon, was that? Yes, it was. Well, thank you all for joining us. For those who were able to join the clubhouse, I hope you enjoyed it. And if you're joining us for our little post-clubhouse chat, then we're here to reflect with you on battery investments. We had the immense pleasure of speaking with Catherine, who is with TDK Ventures and has a wealth of experience in the battery space. And, you know, really gave us some interesting insights on battery investments, which has a lot of buzzy aspects about it. But I think our conversation with her really broke down, really unpacked, like, what's going on in battery investments right now, which was awesome. It was actually fantastic. For me personally, Simon's probably having a good giggle right now because I just nerd out when it comes to battery recycling.

1:23And that just happens to be where a lot of her investments have been taking place in recent times. But she did talk to us about a number of things, and it was really, really interesting. So I really enjoyed that conversation. And Simon, what did you think? Yeah, I think I really enjoyed this one. I think it was a lot of good feedback. I think because it's just a topic where, again, like, you know, one thing we didn't really talk too much about, but like, you know, in the Battery Associates newsletter, which comes out once a month, you know, we're covering all kinds of battery news. And I think more recently, and I think the past month, but also even just the past month, has been packed with battery investment announcements. A lot in the U.S., not surprisingly, with the Inflation Reduction Act, right? And a lot of investments from South Korea and, like, you know, a lot of the ISK and LG and all of these players really wrapping it up and a lot of government support as well.

2:19And I think there's from both ends, right, from, again, Korea, but also the U.S. and a lot of players. And so I think if you just open the news, you're probably going to read about battery investments, right? You will talk about scale-ups, new factory openings, a lot of money flowing. But I think it was an interesting conversation just to figure out, like, you know, the investment thesis. I think that's always an interesting one, right? A lot of people maybe don't think about, like, where is your niche, where's your area, where you can make a difference. And I think this was quite fun. And as you say, this ended up being a little bit better than recycling, but also other topics like dry coatings and things and real understanding. If you are in a space, where's your area of, like, you know, where you can make a difference, right? Where can you put your dollars in the most effective ways? And, of course, also I had this question about how can we make sure money goes in all of the important areas, not just the one which is very attractive right now from an investment thesis.

3:16And, of course, there's a lot of vehicles and there's government funds. And we didn't talk about these things too much. We talked more about the, you know, VC investments in a way. But, yeah, I think this was really fascinating. How about you, Bavia? What was your takeaways, your thoughts? I agree. Like, most interesting part for me was understanding how the investment is made and why they make it and how they think about it. I really appreciated Catherine digging into the kind of, like, pre-vetting, vetting investment timeline of, you know, we choose a topic that we want to dig into for three to four months. I think often with early stage VCs, at least from the outside, it might seem like, you know, they're just kind of, you know, doing the research and understanding the topic, but not, you know, are doing it from an investor's perspective. And maybe a little bit as someone who is about to join that space, I'd like to say that not like, you know, it was a reminder from Catherine that investors like herself have such immense and deep expertise in this area.

4:20And then take the three to four months. It sounds like what TD, that's like what TDK does. It's part of their timeline to take some months of like deep exploration is that phase is like the first phase of an investment that they call, as they call it. Right. And really understand what's going on, because these things that we're talking about and that are like bread and butter for us every day, battery recycling, the processes, or I think TDK, you know, may have some interests in like green hydrogen and nuclear and other tech as well. Like it's all clean energy tech you have, but it's very technical. And in that regard, I think it does require having a certain level of knowledge about the topic before you, even if it's early stage, even if you're feeling risky. Right. And so I think what Catherine was able to share with us about their investment process and timeline was pretty interesting. Absolutely. And I think that's an interesting point, right?

5:15Because as you say, sometimes it can feel a bit, if you just read on the news, right, feel a bit random. But I think it's all about timing, right? And really understanding, you know, you have a hypothesis, this will be an attractive area. You want to be in the space and then you find like the best fit, right? And I think that's quite a... Yeah, exactly. Best fit. Fit matters. And maybe, you know, folks who run startups or are seeking investment, you know, they understand this. But I don't, you know, our listeners, many of you come from different walks of life. So I think there's two things to remember, right? Like one, investors are doing the research. And two, if you're someone who has done the research and is a subject matter expert on any of these topics, there is a niche for you out there. And there is probably a VC that's interested in having the expertise that you have. And so it's actually, I think often we think that finance is only for finance people.

6:13But what does that mean when it comes to clean energy, when you need that clean energy expertise? And so if you have it, the financial world needs it too. And that, I think our conversation was a great reminder of that. Absolutely. Yeah. And I think one thing also about, because you just mentioned startups, right? And also we have a lot of people maybe listening from larger companies, organizations. And I think it's also interesting, you know, we spoke about CATL a bit, right? And actually, TDK has an interesting story there, right? With kind of, you know, being heavily involved in ATL. And then, you know, CATL was been out. And again, read it up on Wikipedia or anywhere you want. It's a fascinating story as well, just from a company perspective. And in general, right, it's fascinating how the largest battery company came to be. And I think it's also interesting to figure out, you know, where, because you spoke about timing now, right? And when you have, like, you know, a good spot and maybe a good region, right?

7:08Maybe suddenly the U.S. became more attractive through the Inflation Reduction Act. And then other regions, you know, come in place. And Europe tries to do response on all of these different topics. But also really thinking about, like, what is the right platform for innovation and bringing these new things to market, right? Because now we have, for example, also an announcement with CATL, with this really high, super high energy density batteries, right? A news which came out in the last month. And I think a lot of people wondering, oh, wow. You know, people maybe didn't see it coming in the same way. And, of course, there's still things to be seen, how it's all looking in detail. But I think it's also interesting to think about whether the places a startup can really make a big breakthrough and a change. Maybe some of where can the big companies maybe also do a lot of innovation because they have to scale opportunities. So I think, yeah, it's just interesting.

7:57And, of course, as an investor, you have to think about all these things, right? Like, even if you maybe now support a great startup, but then it just gets, you know, displaced by a big company. Or you have a smaller startup which then gets acquired. Or, you know, all these different ways, right? Where how things can move. Yeah, absolutely. That's a great point. I think you also really hit the nail on the head when you asked about just what's it going to take to get niche or less attractive or interesting or whatever. Other parts of the value chain off the ground. And I thought she, you know, she gave some really great insights. We also had awesome audience participation. And so I think all in all, I really enjoyed Catherine's perspective. And I'm sure that the conversation will continue. So next time you decide to pick another topic, Simon, I'm sure we'll cut back to battery investments. Clearly, I think today's conversation was a good reminder that when you start talking about one thing about batteries, you end up talking about almost everything related to batteries.

8:59So I really enjoyed that aspect of today's chat. Absolutely. No, and I think with this, we're at the end for the day. But yeah, if you want to get the full story, listen in to the full recording from Clubhouse. Again, you have a lot of things shared there. Otherwise, also, you know, join us for our next session about a month's time, either live or, you know, on Clubhouse or, you know, through listening it as recording. Also, I personally will be traveling quite a bit the next month or two months. And I will be at a few different conferences and expos, etc. And also bring my podcast equipment with me. So hopefully there might be some on the road podcast sessions, which we're also going to share here. So look out for that as well. Yes. Find Simon if you're going to a battery event in the next two months is what that all means. Yes. And yeah, we'll be, I guess I too will be an insight.

9:54We'll be insiders on the go this summer. So hope you are down for a summer road trip around the world with us. Thank you. I'll speak soon. Bye bye. Have a good one. Bye now. Bye now.