Batteries, Lobbying, and Asking for Help — 48 hours in Santiago
My stay in Chile was brief but informative, a country blessed with abundant natural resources, ocean access, political and economic stability and a rich history of government supported innovation. In a sense, the trip felt providential because much of my interest in government supported innovation originated with the Startup Chile program. The program offered startups willing to relocate to Chile equity free capital, a year long acceleration program, working visa, as well as access to co-working space and business perks and benefits. Now these resources may seem commonplace, with similar programs popping up from Tel Aviv to Tulsa, but Chile was one of the first. I came away from this visit with a deepened appreciation for the role the Chilean economy will play in the global electrification revolution, the power of startups playing an active role in policymaking, and the importance of asking for help.
Western economies are initiating a battery revolution, from cars to home heat pumps, and as we know these batteries require huge amounts of raw materials such as copper and lithium. In Chile specifically, mining represents 18% of GDP and output is committed to expand by 22% before 2033. The dramatic expansion in demand for these materials is felt by governments and companies racing to grow global supply. I believe this is a massive opportunity zone for early stage tech platforms that can improve the efficiency, human operations, and scope 2 and 3 emission increases that are inevitable from mining incumbents in the coming 3–5 years.
In line with this hypothesis, I had the opportunity to connect with the founders of Mineral Forecast, a startup supporting middle market critical mineral mining companies across Latin America to improve their discovery rates by leveraging artificial intelligence and remote sensing. Both founders come from families with deep roots in the traditional Chilean mining industry, and the team brings a startup mentality to help solve a problem as old as the industry itself, discovery. It was clear that many of the largest mining companies in the region are struggling to meet demand, and are making expansion decisions quickly limiting the window of opportunity for third party tech solutions to have an outsized impact. Mineral Forecast, and others such as Lilac Solutions, are well positioned technically with great macro timing.
A quick side note on building a thesis in the climate venture capital arena when considering “two sided technologies” such as tools that can make mining operations more efficient and profitable. A more climate absolutist investor may consider this too incremental, especially if the products are being used by miners interested in materials that have no connection to electrification. I was initially of this perspective too, but in speaking with the founders and a number of other investors in the space, I think if you are able to make a strong case for later value chain battery applications, you can make the same care for the primary materials that fuel those offerings, and therefore a strong case for making those operations as efficient as possible.
In Santiago, I organized a dinner for startups and VCs to try to get a better sense of the landscape, share insights, and look for opportunities to collaborate on deals as part of our Fund III at Dalus. The group was fantastically broad in interest and experience, from first time fund managers, to long standing specialist investors, journalists, and entrepreneurs. Leadership from Algramo, Strong by Form, Mineral Forecast, Zeru.Earth, Startups LATAM, and investors from Yield Lab, Watermelon, Antarctica Ventures, Alaya, and Fen were in attendance. I kicked off with an activity where I asked everyone around the table to make a request and an offering of the group to better understand how to collaborate as an ecosystem in the coming year. The requests ranged from specific talent needs and warm investor introductions, to longer term strategic guidance on specific business challenges. The offerings were bountiful, from invitations to join private weekly founder meetups, to IP strategy consultations, and more. It was a powerful evening where everyone around the table was generous and honest about their needs. The lesson is that we are all building something, and we all need help — so don’t be afraid to ask.
For better or worse, many of the breakthrough climate innovations required to decarbonize the global economy necessitate outsized and rapid government buy-in. Andrea Ramos is the Climate Adaptation Lead at Kilimo, a leading water efficiency platform focused on inspiring corporates to work with their local watershed to incentivize savings. She also leads an organization called Climate Tech Chile whose sole purpose is to bring startups concerned with limiting human-environmental impact in direct contact with government leaders across Chile. It became clear throughout the conversation that while this model of strategic lobbying is widely popularized in the United States and uniquely for startups with services offered by US-based funds such as Overture Ventures and Tusk Ventures, it is not such a frequently called upon tool in Latin America. Based on the early success of the model in Chile, she plans to scale it and work with a new cohort of startups under the same premise in Mexico. In a region where governments come and go in dramatic fashion, having steady hands that can navigate the halls of power on behalf of breakout startups and the planet is sorely needed.
