00:00For VCN Growth, where you operate, the same criticism has been made for all of private equity, that money has
00:05been tied up.
00:06We haven't seen returns, but these are about to be some big unlocks of capital.
00:10What does it do to the ecosystem to have these big IPOs coming to market?
00:14Yes. At the end of the day, it's a virtuous circle, not only of talent, but of capital that comes
00:19back into the ecosystem.
00:20So we've seen this for a long time. And if you think about the PayPal mafia, they've come back, they've
00:26started new businesses,
00:27they've started venture capital funds, and we see that across the ecosystem over time.
00:31What we're seeing now because of the AI paradigm shift, which we think is such a massive opportunity relative to
00:38the opportunities before,
00:39is that we think that a lot of this value is going to be in private capital for a long
00:44time.
00:45Well, one of the things I thought was interesting about your all's relationship to SpaceX is you do have some
00:50space-based startups that you've backed.
00:52So StarCloud, infrastructure for space data centers, exploration company, basically Europe's answer to SpaceX.
00:59Does having SpaceX out there being public help you or hurt you because maybe it's competing for some of the
01:04same capital?
01:05Did it change anything for you?
01:06It absolutely helps.
01:08It helps bring attention to space and the space race as it is in this new iteration.
01:15So what we've seen is a lot of interest now in several of our businesses, as you mentioned, StarCloud, which
01:20is trying to build data centers in space,
01:22and the exploration company, which is focused on reusable capsules, but also going into things like launching.
01:29And it really has also been at the same time as we've seen a big shift into re-industrialization and
01:36a lot of focus, some of it that's sovereignty-based, and some of it that is just AI-based as
01:42well.
01:42By the way, you're going to have to come back so we can do like a whole hour about data
01:45centers in space.
01:46Yes, perfect.
01:47Because I love it, and it's like very sci-fi, and I can't wrap my head around it exactly.
01:50But with all of this, I mean, we have seen, for example, SpaceX today, it's trading below its IPO price.
01:56So it's good, it gets people interested, but what does that volatility do, especially as you think about exiting some
02:01of these companies?
02:02Yes.
02:02When you invest early stage, you really have to have a very long-term mindset, right?
02:07Sometimes we invest in founders where it's just an idea, it's pre-product, and you know that they're going to
02:11be in some sort of valley for four, five years.
02:15Because in deep tech, it might be even longer, right, because some of the milestones are technical-based and then
02:19scientific-based.
02:20And so if you invest in SpaceX, you have to be in it for the ride as a long-term
02:26investor.
02:26So you have these space investments.
02:28You also have a healthy portfolio of more robotics and hardware companies.
02:31Yes.
02:32It's interesting to look at because traditionally, when you think of VC and growth, you think of asset-light businesses.
02:37Yes.
02:37These certainly are not asset-light businesses.
02:39Is this a wholesale change in what's attractive and what makes sense to be investing in right now?
02:44Yes.
02:45Our goal at EQT Ventures is to invest through the waves and through the cycles, which happen, because if you're
02:51in ventures, you're really investing at the forefront and what's around the corner.
02:56And for the last 10 years, we have thought that deep tech has been around the corner.
03:00So now we're in quite a nice position with AI and the re-industrialization of everything.
03:05But it's absolutely true, particularly as you come into growth stage, that with software, it was really exciting because it
03:11was highly recurring, it was sticky, and it was asset-light.
03:14And now what we're seeing is that many software businesses are actually trending into services or into hardware as AI
03:21has really changed the playing field in many ways.
03:24Well, one of those maybe we could point to another investment of yours is Harvey.
03:27And I know specifically looking at Europe for that, since you have such a good crystal ball, how have you
03:32been thinking about what these types of companies do to labor markets?
03:36Like, do you see something like a Harvey coming in and actually replacing jobs of lawyers and paralegals?
03:41And are you backing more companies that have the ability to do that?
03:44Yes.
03:45If you take a step back, how we think about it is the software market was something like $1.2
03:49trillion.
03:50We think that AI, if you think about it relative to the services industry, it could be a $15 trillion
03:55opportunity.
03:56So we go out and we think about what are the pieces of the world where it makes sense for
04:01AI to increase productivity gains?
04:04Legal is a very obvious place for that.
04:06Customer service is a really obvious place for that, and we're invested in a business called Parloa.
04:10Lovable is a really great example of vibe coding, right, which now anyone can be a developer.
04:16We think that ultimately this will create more jobs, this will make jobs more interesting.
04:21But, of course, in the short term, there might be a change management of what do people do every day
04:27might shift.
04:27Have you been vibe coding at all?
04:29I do vibe code.
04:30What have you vibe coded?
04:31Well, most recently I helped my daughter and her girlfriends put online a bracelet-making business.
04:37I like it.
04:37Very entrepreneurial of them, too.
04:39I see kind of a nice overlap between what you do there.
04:42So part of your role at EQT Ventures, I know you're highly involved in the Europe Scale-Up Fund, which
04:47EQT won the mandate for.
04:49How has that been going?
04:50That's been such a terrific initiative, we think, because we see as a clear gap, as someone who's been operating
04:56in this market for many years,
04:57that there is a clear gap at growth stage and particularly for deep tech businesses in Europe.
05:03So we think that this was a fantastic initiative.
05:05We're thrilled to have won it because, of course, we have ventures, we have growth, and we have a life
05:10sciences venture business.
05:12And so across all of the people we have, all the PhDs in life sciences and the technologists in ventures,
05:17we hope that we'll be able to drive a lot of investment.
05:21Is there a timeline there of when capital can start getting put to work?
05:24Very imminently, we think.
Comments