Some retired CEOs are going to space. Others move to Hawaii. But Unity co-founder David Helgason chose a different path after 12 years at the helm of the game engine company, which went public in 2020 at a valuation of $13.7 billion.
After stepping down as CEO in 2014, Helgason still serves on the board of the now-listed company he co-founded in Copenhagen in 2004; but most of his time is spent at Transition Ventures, an early-stage venture capital firm he launched in 2021 to focus on climate.
This shows that the fund is called “transition” and not, say, “apocalypse”. This is partly because Helgason believes that traditional industries – usually harmful to the environment – will eventually be supplanted by more sustainable solutions, and partly because of his personality. “My friends describe me as a ‘glass a tenth full’ optimist,” he told TechCrunch.
In an interview at his home near Reykjavík, the entrepreneur-turned-VC shared his thoughts on his projects and the journey that led him from Unity to climate technology, a homecoming of sorts. “It’s a little embarrassing how much fun it is to work on the climate crisis,” he said.
A long way home
Unity’s public debut transformed Helgason into a billionaire, at least on paper. The market capitalization has declined since then, but the bottom line remains: he made a lot of money from the company, and that capital has become more and more liquid over the years.
This allowed him to become a prolific angel investor, fulfilling his natural inclination to spend time with entrepreneurs. But his climate concerns had to wait: as a software specialist, he had no clear way out.
That changed when one of his siblings, Ingvar, started a lab-grown leather company, VitroLabs Inc. That led Helgason to become involved in the startup and synthetic biology more broadly. Eventually, that led him to climate-conscious deep tech startups.
In addition to his angel investments, Helgason has also become a sponsor of numerous climate-focused funds. “For a while, I was pretending that I was probably the most widely invested LP in climate,” he said.
Both activities gave him the kind of learning he craved. “I always wanted to be a scientist,” he recalls. In his current state, however, he realized he had more value to add as a beginning investor. Thus, Transition Ventures was born as a venture capital firm. Helgason already had (and has) a family office called Foobar. Transition Ventures is a different beast, and not just because of its climate mandate.
An adequate fund
It would be a mistake to consider Transition Ventures a family affair. Sure, Helgason and Ingvar’s brother Ari is one of his four partners, but Ari’s resume speaks for itself. His startup, Fabricly, participated in Y Combinator’s winter 2010 batch before becoming an investor at Dawn Capital and Index Ventures.
The third partner, London-based Atomico alum Kristian Branaes, was on board from day one, and the trio quickly hired New York-based Mona Alsubaei, who learned the tricks of the VC trade at Union Square Ventures and its climate fund. The investment team also includes Director Clara Ricard, who was recently featured on the Forbes 30 Under 30 Europe 2024 list.
While Helgason’s wealth allowed Transition to begin investing immediately, the partners also made a point of seeking sponsors. “We never really considered not doing it as a true commercial venture fund,” he said. This meant joining the ranks of other climate funds such as Climate Capital and Chris Sacca’s Lowercarbon Capital. Although it owns LPs, Transition does not disclose the defined size of the funds or the amount it has invested to date and plans to invest.
Although Helgason was able to finance the fund himself, fundraising was not easy. By the time the documents were ready, market conditions had changed.
“Before we could start raising money properly, the war (in Ukraine) had started and we went from the hottest market in memory to the coldest market in quite a while, so it was a lot of work,” did he declare.
Once fundraising was done, Transition Ventures ended up with a mix of LPs that Helgason considers quite healthy: mission-aligned backers, but also backers who were more financially focused and without a climate mandate . In other words, they are in it for the returns, which is the commitment of any commercial venture capital fund.
Having LPs means having to generate returns, and in a limited time frame, but Helgason is OK with that.
“We are quite disciplined about deadlines, but the climate crisis also demands it,” he said. “We don’t have time to linger and explore. …Our mission is to find companies that are ready to go…and then we help them dramatically accelerate.
A portfolio of projects
Because Transition Ventures considers climate as a theme and not as a sector, the 12 companies in its portfolio are quite varied:
- Electricity Maps, which calculates the carbon intensity of electricity consumption to optimize use at scale.
- FabricNano, which hopes to make cell-free biomanufacturing cheaper and more efficient at scale.
- Heat Geek, which provides independent installers with the support needed to accelerate the adoption of heat pumps.
- Odyssey, an online marketplace and software platform connecting investors with renewable energy project developers.
- Phase Biolabs, a synthetic biology startup upcycling CO2 into ethanol and other chemicals.
- Reel, a renewable electricity provider that allows businesses to enter into power purchase agreements.
- Revoy, a swappable battery solution and charging network to transform trucks into hybrid and electric vehicles.
- Running Tide, which removes carbon by growing kelp in hatcheries and sinking it into the depths of the ocean.
- Safi, formerly known as TrueCircle, a B2B marketplace for trading recyclable materials.
- Upway, which makes e-bikes more affordable through refurbishment and recycling.
- Waterplan, which participated in Y Combinator’s Summer 2021 batch and helps companies manage water risks.
- Watershed, which helps companies decarbonize their activity.
Unlike Helgason, none of these companies are Icelandic, but “that was never the plan,” he said. However, Running Tide uses Iceland as an R&D base, with support from an external team that Helgason helped set up. Now called Transition Labs, it helps climate technology companies leverage Iceland and its natural and societal characteristics to accelerate their development.
Shortly after launching Transition Labs, Helgason returned to his home country.
“I always wanted to live here,” he said. After spending most of his life abroad, he now resides in one of Iceland’s most expensive properties; However, this price is far from invisible in the Bay Area. The house itself is quite modest; its most striking feature is its panoramic ocean view.
For someone who spends their time worrying about global warming, the ocean is probably a powerful reminder to act.
“But even to those who say climate change isn’t real, I say it’s almost important, because there are adjacent crises that are so important,” he said. Whether it’s biodiversity or ocean health, Helgason is impressed by the caliber of founders tackling these issues. “The talent is incredible,” he added.
Although Helgason no longer considers himself an entrepreneur, he also has a new project, Cleanplay, whose stated mission is to “make games part of the solution in the fight against the climate crisis.”
The project is still secret and details will be announced at the Dice Europe conference in September, but we already know that video game great Richard Hilleman is involved, as is Benedikt Franke, CEO of Planetly, a carbon management startup acquired by OneTrust. in 2021.
It seems like a great solution for Helgason to combine gaming and investing around climate impact, but his heart now rests firmly on the latter.
“A few years ago I decided that I would only do climate from now on,” he said. Transition Ventures still has work to do on this front; it is “about halfway” through deploying its capital, seeking the answer to the question on many investors’ lips: Which climate solutions are best positioned to scale?
Disclosure: Anna Heim traveled to Iceland at an invitation from Business Iceland in the name of Reykjavik Science City.
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