Ceres Q&A With Nancy Pfund: ‘The progress we are making is undeniable’

Forbes
By Mindy Lubber
August 18, 2016

Ceres is launch­ing a new Q&A series as part of its Clean Tril­lion cam­paign aimed at ele­vat­ing clean energy invest­ments glob­ally by an addi­tional $1 tril­lion a year in order to min­i­mize dam­ag­ing cli­mate change impacts. The series will focus on invest­ment thought lead­ers who are paving the way in this fast-​​growing space. Today’s inter­view is with Nancy Pfund, founder and man­ag­ing part­ner of DBL Part­ners, a ven­ture cap­i­tal firm based in San Francisco.


Ceres: DBL Part­ners has an ambi­tious goal of invest­ing in com­pa­nies that deliver top-​​tier returns while also yield­ing envi­ron­men­tal and social ben­e­fits. From a clean tech per­spec­tive – with Tesla, Solar City and Off-​​Grid Elec­tric among your invest­ments – are you feel­ing bull­ish today about achiev­ing these dual objec­tives and do they require more patience than is typ­i­cal for a VC firm?

Nancy Pfund: DBL’s mis­sion of invest­ing for both finan­cial and social returns is get­ting more rel­e­vant every day. Investors from pen­sion funds to endow­ments to fam­ily offices, foun­da­tions and strate­gics increas­ingly have sus­tain­abil­ity front and cen­ter in terms of their areas of focus. DBL has been a huge ben­e­fi­ciary of this trend, and its invest­ments are help­ing to show the world that now is the time to cre­ate the 21st Century’s iconic cor­po­ra­tions designed with 21st cen­tury needs like cli­mate change in mind.

In our asset class, ven­ture cap­i­tal, patience is required no mat­ter what the sec­tor. Tak­ing on incum­bents doesn’t hap­pen smoothly or overnight. While clean energy invest­ing has its share of volatil­ity – the ‘solar coaster’ as one exam­ple – the progress we are mak­ing is unde­ni­able as we move toward higher and higher pen­e­tra­tion of renew­ables, EVs, effi­cient build­ings and, now, energy stor­age. While the state by state reg­u­la­tory struc­ture in the United States is an expen­sive attribute with which com­pa­nies in this space have to con­tend, the reward is that when progress is made, the pub­lic pays atten­tion and the sto­ries of these pio­neers become embed­ded in a larger swath of our social fab­ric than just a new app com­pany can usu­ally achieve. This makes for out­sized return poten­tial, both in terms of investors and soci­ety as a whole.

C: You have pre­dicted a trans­for­ma­tion in the energy world in the next decade that will change entire indus­tries, includ­ing elec­tric power and trans­porta­tion. Why are you con­fi­dent about this trans­for­ma­tion mov­ing forward?

NP: The energy trans­for­ma­tion is dri­ven both by attrac­tive cost/​performance curves and grow­ing con­sumer aware­ness and demand. It is this com­bi­na­tion that makes it so unstop­pable. No longer do con­sumers need to sac­ri­fice per­for­mance for green cre­den­tials, and increas­ingly they not only don’t need to pay more, they may pay less. Going for­ward, the oppor­tu­nity will grow to store your power from your solar pan­els to use at night or as backup, charge your car accord­ing to the cheap­est rates with the push of a but­ton, and enjoy aes­thetic appeal in design from your roof to your win­dows to your garage: all of this taps into what con­sumers want today. Just as we have enjoyed rad­i­cal changes in how we take pho­tos, send emails or texts, make phone calls, lis­ten to music, and share sto­ries, pho­tos and infor­ma­tion with one another of the past decade, we are now poised to enjoy these new ben­e­fits in our energy lives. Like Rumpelstilskin’s 100 year old slum­ber, it’s time to wake up! Along the way, we can re-​​invigorate qual­ity job cre­ation and man­u­fac­tur­ing, cre­at­ing jobs that are acces­si­ble to a wide vari­ety of Americans.

C: I’m espe­cially intrigued by DBL Partner’s recent $10.5 mil­lion invest­ment in Off-​​Grid Elec­tric, an off-​​grid solar com­pany that is entirely focused on Africa. This is DBL’s first invest­ment in Africa. Why Africa and why now, and how did lessons learned from your domes­tic clean energy invest­ments inform this investment?

NP: Our invest­ment in Off-​​Grid Elec­tric (OGE) is a log­i­cal pro­gres­sion of both DBL’s mis­sion and our invest­ment focus. There are cur­rently over 1.4 bil­lion peo­ple who live with­out elec­tric­ity, over 600 mil­lion are in sub-​​Saharan Africa. With­out fix­ing this elec­tric­ity gap, build­ing a mid­dle class and improv­ing qual­ity of life will remain off lim­its to regions of the world that are slated for some of the high­est rates of pop­u­la­tion growth over the next gen­er­a­tion. In 2016, we sim­ply can’t sit by and let this hap­pen – we need col­lec­tive action and we need to extend the ben­e­fits of an entre­pre­neur­ial approach to regions that are now ready to launch. At the same time, in bring­ing elec­tric­ity to mil­lions of peo­ple, we don’t want to, and don’t have to repeat some of our 20th cen­tury mod­els that no longer work. Costs of solar and stor­age and energy effi­ciency devices are now in reach for many Africans, and can replace dirty and unre­li­able fos­sil based solu­tions. The wide­spread use of mobile phones in this area of the world also allows for fric­tion­less pay­ment mod­els, another leapfrog effect that allows Africa to define its own future and aug­ment its entre­pre­neur­ial pro­file. These are the rea­sons to use the lessons we have learned in U.S. clean energy mar­kets and apply them to a new mar­ket like Africa: the return poten­tial is sig­nif­i­cant and the oppor­tu­nity to shape a more pros­per­ous and healthy future makes for one of the high­est impact endeav­ors of our age.

To read the full inter­view, visit Forbes.