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Brynne Kennedy

Managing Partner and Co-Founder

BCP Ventures

April 27, 2023
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Ep 87: Brynne Kennedy - Managing Partner and Co-Founder, BCP Ventures
00:00 / 01:04

Michael Crabb [00:00:57] Welcome to another episode of the Energy Impact Podcast. Our guest today is Brynne Kennedy, the managing partner and co-founder at BCP Ventures. Brynne, great having you on.

Brynne Kennedy [00:01:08] Thanks so much, Michael. Great to be here.

Michael Crabb [00:01:11] Before we talk about all the cool investments and activity that you guys have going on, tell us a little bit about yourself. Where are you from?

Brynne Kennedy [00:01:18] Well, I grew up in Massachusetts and have lived all over the world, so I never know how to answer that question really very well.

Michael Crabb [00:01:28] I have the same problem. How young did you move? I think that's the distinction.

Brynne Kennedy [00:01:34] Well, I grew up doing gymnastics, so I was traveling and competing all the time all over. So, these days, yes, I run BCP Ventures and I split my time between New York, LA, and increasingly, Switzerland, but also, I'd like to say I live on a plane, mostly. My journey to get here was also interesting. I started my career in finance, traditional investment banking and private equity. And I lived all over... Hong Kong, Singapore, India, through that experience. I got my MBA at London Business School, so I lived in London for about a decade and started a software company in London that I led for about a decade as the founder and CEO. So, first in London and then we moved it to Silicon Valley, which brought me back to the US.

Brynne Kennedy [00:02:28] And I got really involved, as the CEO first, in London with the David Cameron administration and then secondly, back in the US with Congress. And at the time, the Trump administration and the California state government on effectively working together on policies for the innovation economy. So, how do we create more companies, more investment into solving the biggest problems of our future? And that's a conversation that starts with the education system and moves quickly to public-private partnerships and tax incentives and all kinds of different things.

Brynne Kennedy [00:03:05] And that led me, after having been a CEO for 10 years, to step away and throw my hat in the ring to run for Congress in California, really on a platform of bringing people together around the concept of innovation, job creation, entrepreneurship incentives, and solving big, big problems, one of which is energy transition and climate change. So, I did that. I lost my campaign... Story for another day, but great experience in many ways. But also, I learned that the public sector is a rather challenging way to solve the very large problems having come from an investment and entrepreneurship background.

Brynne Kennedy [00:03:50] So after that experience, I kind of decided to put together all the different parts of my career, the finance, the entrepreneurship, and the legislative to build an energy transition venture capital and investment firm. And so. My partners and I founded the firm about a year and a half ago, and we have a big vision to back the companies of the future that will power our energy transition both in what I call a vertical way. So, new technologies, specifically, for generating renewable energy, reducing consumption, or cleaning up oil and gas. And also, what we call the horizontal technologies that enable energy transition. So, enterprise blockchain, edge networks, and the like.

Michael Crabb [00:04:39] Hardware and software. Okay, well, I'm going to make you peel apart what is like basically three lifetimes in only a handful of years. Okay, so you started with kind of moving around a lot. You were in gymnastics. Talk to us about that transition, gymnastics to finance. Like, I can't imagine that was a super common pathway. How did that play out? Let's start at the very beginning.

Brynne Kennedy [00:05:08] Well, there was college in between.

Michael Crabb [00:05:11] Yeah. Did you do gymnastics up until college? I mean, I have friends and my wife is a gymnast. I know how grueling that process can be. Was college sort of the cut off, real world time?

Brynne Kennedy [00:05:24] Yeah. So, I did gymnastics all growing up for the country, for the US. And then, I got pretty badly hurt when I was 15 and kind of transitioned my focus from going to the Olympics to going to college and completing my gymnastics career, but also getting a great education. So, that led me to go to Yale. And I did compete in gymnastics for four years at Yale. We went to the Ivy League Championships. You know, it's Division I, four varsity letters, all that. A great experience, great end to it, but also an opportunity to kind of think about a future beyond the sport.

Brynne Kennedy [00:06:04] So, I did study history at Yale, ironically enough, because I'm a big believer in liberal arts education, but I also had the opportunity to kind of learn a little bit more about Wall Street and interact with people whose families had come from that world, in many cases. Mine had not. And I got really interested in that. So, after college, I worked at Lehman Brothers and then sort of the early folks in a private equity fund that Dubai World and Standard Chartered started. And it was a great experience. I like to say that investment banking is like a graduate degree after college.

Michael Crabb [00:06:52] Yeah, give us the layer of that. I mean, history... You're working your tail off on gymnastics, you're working your tail off in this liberal arts intense degree, and then you're like, "Well, why not just keep working my tail off in finance as an analyst?" That's like a different skill set altogether, I would imagine.

Brynne Kennedy [00:07:10] Yeah, it's a bit like learning a foreign language, kind of. It's a skill. Like, anyone can learn finance, I think. And I'm a big believer in liberal arts education, just the ability to develop critical thinking and problem solving skills and put dots together. And I think history is a huge part of that. But at Yale, I also had studied Mandarin Chinese, so I did sort of a lot of my thesis work around economic development history, more recent, actually, and looking at China and some of the... I think they used to call them Asian Tigers, Singapore, Korea, et cetera. So, it's a little bit of a mix of economic innovation, company creation, and history. When I graduated and started working at Lehman Brothers, I actually did that in Hong Kong so that I could kind of bring those things together.

Michael Crabb [00:08:11] Yeah, fascinating. Yeah, I'm starting to see how these themes percolated into platforms today. Okay, well, let's keep moving, then, through that pathway. So, you're at Lehman; you were on kind of the advisory side. And then, you said you worked on private equity after that. Tell us about that experience.

Brynne Kennedy [00:08:31] So, when I was at Lehman, I was part of a deal that was focused on redeveloping the Delhi airport. And so, the client had a lot of land around the Delhi airport and was going through a process of selling that to hotel developers to build this hospitality zone to help finance the actual infrastructure redevelopment. And I had the job of traveling throughout the Middle East and Asia with the client and pitching this opportunity to all of these funds. And I remember, I was in the meetings and I kept thinking, "Gosh, it's so much more fun to be on that side of the table where you're making a decision about whether or not to invest and how to value this rather than on my side of the table and doing client services."

Brynne Kennedy [00:09:22] And so, I started thinking... You know, good advisory basis, which I think is an important skill. But I wanted to have the opportunity to be a principal, the one making the decisions. So, I got connected with a group of people. At the time, Standard Chartered Bank was starting a platform of joint venture private equity funds across different areas and they had partnered with Dubai World, and they were the two GPs on setting up a new private equity fund focused on real estate, really, throughout Asia. So, I was able to join that kind of from the ground up, participate in raising the fund.

Brynne Kennedy [00:10:09] We raised a $550 million fund of which they had put in $300, so we raised $250 more. I can't remember the exact numbers, but something like that. And then, I was able to kind of cut my teeth on the investment side and learn those fundamentals. So, that was great. It was 2008, so the timing was not awesome. If everyone realizes, that was when Dubai went bankrupt. Abu Dhabi bailed them out and Dubai World struggled to be a GP in this new fund. So, we ended up...

Brynne Kennedy [00:10:49] To make sort of a long story short, Standard Chartered took over and it was a confluence of things and just kind of a different experience than I had expected. So, I decided that it was time to go to business school. I remember, I was like, "The next fund that I do, I'm going to be the GP, the principal, and not be a participant in this." So, I went to business school, built a company, and then here we are now. I am a GP.

Michael Crabb [00:11:17] Yeah, well, that wasn't linear either, right? Because what you just said... A lot of people, I think, probably have a similar experience. Maybe not as many through such a large macroeconomic cycle, but you were also a student of these cycles throughout time, right? So, you decided to go to business school, but then you went and became an operator. Was that something that happened while you were at business school? Did you have this idea for the company prior to going to business school?

Brynne Kennedy [00:11:50] It was a little bit of a combination. I mean, I felt like I had learned the advisory side, learned the investing side to a base level, and that I hadn't had the opportunity to really get my teeth into a business beyond the financial aspect of it, which obviously is super important, but I did want to learn the operating side of it. So, that was kind of a lens with which I went to business school.

Brynne Kennedy [00:12:14] I kind of stumbled into founding the company because what my prior company, Topia, did was we had disrupted the global relocation space. So at the time, I had lived all over, Hong Kong, Singapore, India. And I had so many friends that had also lived all over. To be quite honest with you, it's like one of these things where everyone in London or Hong Kong or Zurich or wherever goes to, literally, like a bar and is like, "Why is it so hard to move around the world? Like, my company sucks at this. It's so archaic. I have to call all these people and print out all these forms." And we would just kind of always talk about this and I was like, "Wow. There's probably an opportunity to apply technology to this archaic service industry and also give more people the opportunity to more seamlessly interact with different cultures and live in different places."

Brynne Kennedy [00:13:12] So, that was kind of the basis of what became Topia 10 years later, which is a comprehensive HR, global HR management platform used by many of the largest companies on earth. So, it was kind of linear, but kind of opportunistic also.

Michael Crabb [00:13:29] Yeah. No, that's really cool. And how many great companies are founded is identifying the problem first, right? Finding the problem and then solving it.

Brynne Kennedy [00:13:37] Yeah, totally.

Michael Crabb [00:13:40] Yeah, I'm sensing a theme here where your degree of difficulty with whatever you do is at the absolute max, right? You're like, "I want to be an operator. Let's start a business." And I guess that's why you are who you are, right?

Brynne Kennedy [00:13:53] I guess, yeah.

Michael Crabb [00:13:54] Okay. So, you're an operator, you built this platform up, you learned a ton of lessons. And then, you combined all of these and said, "Okay, I want to solve the public sector problem, too." I mean, walk us through that thought process.

Brynne Kennedy [00:14:10] Yeah, I was really lucky to start Topia during business school at London Business School in London. And it was at a time where there was a lot of dialog about how to make London the startup hub of Europe. And a lot of that was led, at the time, by David Cameron and George Osborne. And it was like a really special time because they were very collaborative with everyone who was a part of the entrepreneurial ecosystem. Many of my early investors, myself, fellow friends and founders, and there was a lot of dialog. They used to have breakfasts at 10 Downing Street every Friday and seek input. There were a lot of events. I think London had, at that time, a very unique overlap between the tech world and the government. Unlike the US, it's all based in London, so it's pretty concentrated.

Brynne Kennedy [00:15:03] So, I was a part of that and saw... I was running a company and I was young. Many of my early angel investors who became close mentors and friends were kind of post their company building phase and they were intimately involved in that, so I got to see that. And quite honestly, it was really, really inspirational. Unfortunately, a lot of it changed after Brexit, but it was a really amazing thing to kind of be a part of in some way and a really good example of how when it works well, you can bring the innovation economy and a pretty forward-looking government together to do great things.

Brynne Kennedy [00:15:47] And you know, it succeeded. Like, London today has tons of companies. Every major US venture capital fund invests in companies in London now. You know, Tech City, which was thing we all sort of created, is a huge thing. There's unicorns. Like, it worked. So, that was amazing. And when I moved back to the US a few years later, I had the interest in kind of continuing being a part of those conversations. The vehicle is a little different in the US for obvious reasons, but there's a group of CEOs in Silicon Valley that would effectively represent and lobby on behalf of the innovation economy at the state and federal level. So, I was a part of that and just got really similarly involved in that.

Brynne Kennedy [00:16:40] And that really led me to say, "Okay, maybe give it a go, putting my money where my mouth is and try to do this in campaign politics." It's different on that side of the world, but I'm glad I did it. And I think I learned a lot. But it is definitely more my passion to solve problems in the private sector and be a part of sharing that knowledge with government than sitting in Congress all day fighting.

Michael Crabb [00:17:11] Yeah. It's so funny. I mean, super commendable that you actually did... I feel like everyone likes to complain. You actually did something about it, which is awesome. Sometimes it's like... We need more of that, on one hand. But on the other hand, I do tend to agree with you that we can't count on public institutions to drive innovation because there's just natural friction as a part of public institutions that's healthy that makes innovation very challenging. So yeah, it must have been a really interesting journey. I don't know. I guess there's not a question there. That's poor hosting on my part, but...

Brynne Kennedy [00:17:49] Yeah, it was a really interesting experience. I mean, I ran an area that was heavily oriented to the other party and really with a sort of quasi-entrepreneurial thesis that you could drive change, bring people together around the concept of innovating in the private sector and solving big problems of the future. And, you know, in many ways it worked. Like, I ended up with 20% more than my party registration, and there were a lot of beautiful things. But at the end of the day, retail politics is not about talking about solving big problems through innovation. Unfortunately, in today's era, the campaign politics is more about us versus them than it is about real solutions. So, hopefully we will someday live in an era where that's not the case, but that is where we are today, so that makes it very difficult, I think, to affect that type of change from an elected office.

Brynne Kennedy [00:18:56] I learned a lot. There's a really important role for things like the IRA and other policy initiatives that can help to allocate more capital and more innovation for big problems like energy transition, like we're talking about today. But I just think that, for me, it's better to be on the boards, investing in the companies, using my operator skills, helping to build those at global scales, not just in the US but in Europe as well, and bringing stakeholders together around that. And interacting with multiple governments instead of perpetually running congressional campaigns.

Michael Crabb [00:19:36] Yeah, that certainly all makes sense. I mean, you have sort of this unique blend of geography and tactical skills that help... I can imagine how it helps you be more successful in a competitive space like a venture environment. And then, you obviously layer the goal orientation, the mission orientation, and that's a pretty powerful cocktail. So, tell us a little bit about how BCP came together. And then, we'd love to hear some of the highlights, some of the cool deals, some of your favorite platforms. It's unfair, maybe, to have favorites, but some of the highlight platform companies that you could share with us.

Brynne Kennedy [00:20:18] Sure. Well, my partner, Roger Lang and I kind of knew of each other through entrepreneurial stuff in Silicon Valley. And we got to know each other and decided that it was time to come together to start a firm and to really progress solutions to the biggest problems and bring our experience on the operator side of the world to our companies.

Brynne Kennedy [00:20:49] So in Roger's case, he's an incredibly special person who I'm just so grateful to work with. He founded two companies that he led and went public on Nasdaq and then took a lot of his success from those companies and put it into pioneering a lot of sustainable agriculture initiatives and environmental science conservation initiatives. So, he brings a lot more of the sort of scientific orientation and technical orientation to the fund and is deeply, deeply connected in entrepreneurial ecosystems from 40-plus years of building companies. And then, I bring a little bit more of the finance, deal orientation to things. So, it's a really good fit, underpinned by shared values and shared history as entrepreneurs and operators and great mutual respect for one another.

Brynne Kennedy [00:21:48] And then, we have a third venture partner, Andrew, who we both have gotten to know. Roger's known him a little longer than I have, and they've done things together. And he brings some really interesting strategic perspectives and has advised a lot of funds and been a part of large private and public companies. So, we have a really great partnership. And that's kind of how we got to where we are today. What we really want to do is prove that you can be a part of solving the biggest problems around energy and climate and generating an outsized return through a combination of company selection, roll up your sleeves, help people build the companies, and portfolio strategy. And that is exactly what we're doing.

Brynne Kennedy [00:22:39] So, we originally started our first fund, which we just have closed... It was focused on the concept of reinventing food and energy and infrastructure, kind of the underpinnings of this idea. We like to think about it as the most foundational parts of society. As we look ahead, we're narrowing our focus into energy transition, specifically, and that is largely because we think that's the largest investment opportunity, that's the most foundational thing.

Brynne Kennedy [00:23:15] When we think about Maslow's hierarchy of needs, climate equity across the world, it's a $100 trillion investment gap. 800 million people still don't have access to reliable power. We have a fossil fuel industry that, whether you like it or not, will be the majority of our power sources still for 50, 60 more years, and we need investment there to clean it up, make it more efficient. At the same time, we have to increase renewable generation. At the same time, we have to move to smart everything and reduce resource consumption. So, that's a space that we understand well and that we're really, really excited about.

Michael Crabb [00:23:57] Yeah, you described it well, earlier. Maybe give us another layer of that thesis around the vertical solutions and the horizontal solutions, which I interpreted as hardware and software, but that may be unfair.

Brynne Kennedy [00:24:11] Yeah, I mean, it is to some extent. So, we have an industry thesis and then we have a technology thesis. So, our industry thesis is... I think if you think about the energy transition curve, I think about it as three segments. There's what I call supply increase. So, that's increasing the amount of renewable energy that we can generate, whether that's solar or that's batteries or that's wind or hydrogen. That's renewable generation. Then we have what I call demand reduction. So, how do we just consume less? That's smart homes, smart windows, smart buildings, EVs, all that type of thing.

Brynne Kennedy [00:24:56] And then, we have what I call oil and gas improvement or clean up. You know, many energy transition funds or folks who think about climate think about it in a kind of binary way, and they also invest in oil and gas. We actually believe that a lot of big oil and gas companies are the ones that are investing heavily in pioneering the future, are investing into new technologies, are in need of new technologies being sold to them to reduce emissions or streamline operations. So, that's kind of how we think about the three thematic areas.

Brynne Kennedy [00:25:34] If you think about all the things that I just mentioned, underpinning that is like a horizontal layer, which is what technologies do you need to make all of that true? And we believe that you cannot talk about renewable energy or demand reduction without talking about a greater distribution of data and using that data. And that fundamentally can't happen in a central cloud. That happens with a distributed ledger, e.g. blockchain. That happens with data being used at the point of capture of those nodes, e.g. edge network platforms. And so, we also invest into kind of the raw technology innovation that can service the energy transition industry. Now, many of those companies also sell to other verticals, but fundamentally, it's all about making things more efficient and powering a cleaner and smarter world.

Michael Crabb [00:26:36] Yeah. Maybe it's a pet... Not a peeve. Maybe it's a focus of mine because I love this discussion around hardware and software. It's maybe one of the few industries... I can't take credit for describing it this way, but they're so symbiotic, right? Because what you just said totally hit it. You can't scale software in energy the same way you scale consumer software because you need the hardware to enable it to happen. And you can't scale the hardware if you don't have the software to enable it to happen. How do you think about the allocation across those three themes and the tech stack that enables those things? Like, do you have a set 20-20-50-10? Do you have that sort of proactive decision or is it more opportunistic?

Brynne Kennedy [00:27:27] Yeah, we don't really separate it like that from an allocation perspective because, I think, to be quite honest with you, it's so intertwined. So, we invest into companies that have... In most cases, the companies in the vertical side that we invest into have a half hardware and a software component. They are a battery that also captures a lot of data that also needs a blockchain or an edge platform on top of it to connect that and power energy trading between them where they are a piece of technology for oil and gas that reduces emissions in the separation process and also captures data around that and you can look at it on your phone. So, I would say in most cases, our companies, even on the energy generation side where it is predominantly a hardware sale initially, also have a technology roadmap.

Brynne Kennedy [00:28:19] And then, if you think about we're also investing into technologies that can be a part of that technology roadmap. You know, they may sell to our other portfolio companies. It's like really annoying when investors try to marry their portfolio companies, but sometimes it's also helpful. So, sometimes they might sell to our existing hardware technology companies to advance the software roadmap, or sometimes they may just be independent and they may be selling to other energy companies and/or industrial companies and the like. So, that's how we think about this kind of vertical and horizontal enablement.

Michael Crabb [00:29:03] Yeah, that makes a lot of sense. Yeah, I've been chastised in saying favorites because I know it's a bit like children maybe. But what are some of the more exciting platform companies at the moment that you can share with us?

Brynne Kennedy [00:29:18] Well, I'll tell you first, it's funny. Roger and I like to say, "We love all of our children and we want all of them to succeed and all of them to graduate and go to college," or whatever analogy you use. But so, we have a couple of companies that are super interesting. I'll answer the question a little bit differently and maybe talk about our latest stage investments. So, we're super, super excited about a company called Caban Systems. They were founded in order to provide a renewable backup power source for the telecommunications industry. It started with a focus on Latin America.

Brynne Kennedy [00:30:01] So, the vast majority of the telecommunications industry in the vast majority of the world is powered by diesel generators. And that means that operators are spending huge amounts of money on fuel each year. It's dirty. It's the hottest commodity, also, in an emerging market. And then, there's rolling brownouts and blackouts. And in many of these same countries, they don't have a reliable grid, either. So, you have sometimes more telecom towers than you have on the traditional grid.

Brynne Kennedy [00:30:37] So, what Caban does, they sell a battery that is renewable, solar powered, and other things to telecom tower operators, and they install that there. They remove the diesel generator. They provide the power, and they have a software platform on top of that which enables them to power a whole, what we call "energy as a service" model. So, they take over the management of all of the power and the maintenance. The software platform optimizes it through a combination of AI and machine learning. And so, if you play this out over time, the batteries get installed all over the telecom infrastructure. The software powers the dynamic energy trading use case between the batteries to optimize supply and demand, and also, a trading use case back to the main grid, where possible, to optimize peaks and troughs. So, super exciting.

Brynne Kennedy [00:31:29] The founder's amazing and super special for me because she's a woman, which I really don't get to work with much. And she is Guatemalan, so she kind of grew up really deeply understanding this problem. Initially, it's targeted Latin America. We operate in 12 countries in Latin America. We're expanding rapidly into the US as well as Africa and the Middle East, and we're growing at about 400 or 500% top line, annually. So, we led their Series B, and are super excited about that one.

Michael Crabb [00:32:07] Awesome. So, they're still charging from the grid or is there an attached solar or other generation source tied to that?

Brynne Kennedy [00:32:18] No, it's not at all tied to the grid. It's an independent generation source, largely solar.

Michael Crabb [00:32:24] Okay. So, they're sort of they're doing the full package, the gen plus the battery. Yeah, that's cool. So, it's in a telecom tower. Yeah, I guess it's not such a large power need. You probably oversize solar a little bit and that allows you some optimization capacity. And then, you probably have some capacity you have to save in case there is a challenge, right? You still have to supply the tower in some form or fashion.

Brynne Kennedy [00:32:49] Exactly.

Michael Crabb [00:32:50] Yeah. Okay, super cool. That's a great example because I think there is a very US-centric focus in the energy transition dialog. And some of that's biased because I'm here and you are based here, somewhat, when you're not on a plane. So, it's fun to hear... Like, I think, sometimes, the stories about other countries perhaps being in front of the US don't get talked about enough. And so, it's cool that business was proved out over many other countries, and now you're bringing it back to the US. It's a cool story.

Brynne Kennedy [00:33:27] Yeah, it's interesting because they're based in Silicon Valley, but Alex, the founder really knew the Latin American market well. We work with the largest operators in the continent. As I said, 12, sooner to be closer to 15 or 16 countries. And there's a huge demand in the US market as well.

Brynne Kennedy [00:33:48] It is so funny, when I remember doing the Series B, my lawyer was like, "Oh, in Fairfield County, Connecticut, they have all diesel generators too. Maybe I should talk to the town about buying Caban." So, there's a slightly different use case about hardening telecom sites about, again, optimizing peaks and troughs. Think about something like California is a good example, or Texas, as opposed to kind of having no grid in some other countries, but the use case is the same. And I think the vision here, if we just move this up and we have similar visions for other technologies is, I think, fundamentally where the energy market will go over the next 20 years, to a much more localized and grid-independent energy generation at a lot of different points around the world. And then, what that means is you need a way to connect all of that energy generation and optimize the supply and demand.

Brynne Kennedy [00:34:56] Like, the super simple example I always use is you might not use all of your solar panel capacity in your home and I might need extra. Like, we need a way to interact with each other. And that's where that horizontal software use comes in because you and I can't dynamically trade energy, let alone back to an aging older grid or to like, John Doe over there without something like both edge network technologies to use the data that's captured in each of our solar panels and a blockchain technology so that we can dynamically log and publicly log all of the different kind of inputs and outputs from a ledger perspective.

Brynne Kennedy [00:35:39] So, I think that's where we're going. I think in terms of the hardware side, we're still at the point of just rolling it out and getting the generation going. And in terms of the distributed software side, we're still kind of at the point of developing those softwares and going through an adoption curve as well. But if you fast forward 20 years, I think the biggest opportunities for the world and for investors are fundamentally around the shift from a central cloud technology world to distributed and the use cases around that. And then, the overlay of the $100 trillion energy transition market that is fundamentally a conversation on decentralization.

Michael Crabb [00:36:23] Yeah. I would say I agree with like 85 or 90% of that.

Brynne Kennedy [00:36:30] It wouldn't be a good podcast if you agreed with 100%.

Michael Crabb [00:36:33] Well, there you go. So, I love the distributed vision, but there just seems to be such a barrier to reaching critical mass to make that a reality. Of that $100 trillion, maybe it's like $40 trillion, effectively, on spec to get to a distributed grid hardware layer that can actually manage and deal with matching the software layer to track all of those transactions. And then, the amount of storage and energy demand just to track all of those transactions in 30 second or 5 minute intervals or whatever it's going to be...

Brynne Kennedy [00:37:15] You've just perfectly articulated why we need an enterprise blockchain to underpin all of this.

Michael Crabb [00:37:20] Yeah. And maybe that's my... My background's more the energy, the old school, hard tech stuff. So, perhaps I'm just not caught up with... You know, I saw Amazon had their sort of sidewalk announcement and some of that low latency data. Yeah, I don't know. It feels to me like the end answer, which is I think what we're all wrestling with... Because that defines the steps we take to get there... Is some mix of that distributed grid idea, like kind of a microgrid. I don't know if it's neighbor to neighbor, but it's a microgrid-type solution with central interconnections. I don't think we get away from that idea of some broader transmission grid. I just think we've realized we're not good at managing, maintaining, and scaling that larger grid at all.

Brynne Kennedy [00:38:09] Yeah, it's interesting. We have an investment in a software company called Pratexo, which is an edge network platform. Pratexo mean "edge" in Latin in case you forgot your high school Latin class. I studied Latin for like eight years.

Michael Crabb [00:38:30] I talk math, you talk language.

Brynne Kennedy [00:38:33] Well, not that well, because one of my first questions when I was diligencing the company, I'm like, "What does Pratexo mean?" They're like, "Edge, in Latin." Like, "Oh, I did well in that course." So, what they do is they allow for the creation of micro clouds in localized environments. If you think about... Wind turbines is a good example. So, you could put a cloud out one wind turbine and then analyze data there, or you could like combine a localized community of wind turbines. It could be like the country of Finland or it could be like the city of Helsinki or it could be like a neighborhood in Helsinki or an individual wind turbine. This might not be the best example, but you know where I'm going with this. And then, that allows for that data to be aggregated, analyzed, and used.

Brynne Kennedy [00:39:28] And so, that's kind of what you were just talking about. Do we get to this beautiful utopian vision of all of the individual energy generation points all over the world? Or do we kind of end up more with a world where there's generation that's distributed that's some form of what one might call regional aggregation? Or, a lot of people call it a virtual power plant. And then from there, the trading is kind of powered. I think that's an interesting question, and I think it's probably going to be a combination, to be honest with you.

Michael Crabb [00:40:04] Yeah, and it does become very market specific. I mean, the telecom example is a good one. Same product, but different use case or different across different geographies, really kind of solving a different problem. And I guess, that's probably where, in population dense areas, it probably becomes more of a consumer product because there's a more elaborate sort of system. And then, in your more distributed rural areas, it's probably more sort of a co-op and muni... A modernized co-op and muni type structure. Yeah, interesting. Well, I think we're kind of talking about it already, so like, next five or ten years, where do you guys see yourselves differentiating versus other energy transition venture capital folks?

Brynne Kennedy [00:41:00] Yeah, I think it's really in kind of three ways. And we've already talked about two of them, but just to summarize, our thesis is that renewable energy is decentralized energy. And whether it gets combined in some way or stays fully decentralized and then traded, I think is a different conversation. But that's fundamentally our thesis. We're moving from a point of central generation where energy is pushed out to decentralized energy generation, where it needs to be kind of pulled and then traded. And so, we're investing into, the prior conversation, hardware generation at those decentralized nodes. We're investing into horizontal technologies that can do that, can regionalize or pull together groups of those nodes, and that can then power that trading side. You know, that use case exists on the horizontal side in other industries too, which is really exciting about those particular investment use cases.

Brynne Kennedy [00:42:00] But the other place that we differentiate is we think oil and gas is a part of the solution as well. We like to say we're pragmatists, not purists. By mid-century, oil and gas will still represent 60 to 70% of energy generation, even if we do everything well and right on the renewable side. And so, what that means is you need people working with those companies to invest in technologies that effectively clean up the environmental footprint of those companies.

Brynne Kennedy [00:42:35] An example of this is another investment we have, a company called Elite Measurement. They have a patented technology that replaces really legacy equipment, and that's the equivalent of a trillion cars worth of emissions per year across all of the wells in the world. Our technology does the same process, separates oil, gas, and water when it's extracted from the ground and emits zero emissions. And that's a massive environmental impact. So, I think we're very visionary, as we just talked about, about sort of where we're moving and pushing the envelope on the decentralization side of things, but we're also very pragmatic about playing a role and being the bridge to that future world. And that's why I think... I don't know if you want to read our financial ad... A lot of our portfolio construction is really, really attractive because it balances vision with pragmatism, and it balances later stage with earlier stage, and it will balance geographies over time, too.

Michael Crabb [00:43:43] Yeah. I should have brought... I'm glad you brought it up, because it is a distinction. And I think it's a good one. It's worth re-emphasizing what you said. Even if everyone's grand plans play out in the best case scenario, we are still about 50, 60, 70% fossil-based. I mean, even if it's not energy, it's other fuels, it's other products. That's super interesting.

Michael Crabb [00:44:10] So, is carbon capture a thing for you guys? I like these edge cases better, I think, because I feel like the oil and gas guys themselves know carbon capture best, but these sorts of like... Marginal is the wrong word because it's such a big impact. But like, different like... Methane data tracking and capturing, right? Like, some of these things that are side thoughts, we need more people focusing on.

Brynne Kennedy [00:44:43] Yeah, I mean, we haven't done anything in carbon capture, but it's certainly on the table. We just do it from a portfolio perspective. We're not the firm that does hundreds and hundreds of investments and sort of prays that one of them is worth a billion dollars. We have a pretty concentrated, focused, investment approach. We're incredibly hands-on with our companies and with a very high bar for something getting through. Because of that, there's a capacity challenge, almost, so we haven't done anything yet. But like I said, it's certainly a part of the conversation.

Michael Crabb [00:45:25] Yeah. Really interesting. Okay, well, very cool. I know we're running a bit up on time. Anything that we didn't talk about that we should have?

Brynne Kennedy [00:45:35] No, I don't think so. You're a pretty good host. You even got to the 90% only agreement with me.

Michael Crabb [00:45:41] Yeah, well, you're a convincing, convincing story. No, it's really cool. I love having these and hearing the different theses and how people describe sort of the themes. And there's always some similarities, but the differences, I think, are what's so promising. That we have people focusing on slightly different areas. Well, super excited to have you on and really excited to see what you continue to invest in at BCP.

Brynne Kennedy [00:46:13] Thanks so much, Michael.

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