Hardware’s Comeback with FORWARD.one’s Beau-Anne Chilla

Beau-Anne Chilla is a partner at FORWARD.one, an Amsterdam-based deep tech venture capital firm that invests in hardware and industrial technology companies across Europe.

What brought you from hardware to venture capital?

I have always had a passion for technology due to my background in industrial engineering. After graduating, I joined Adyen when it was still a startup before moving to the investor side. I worked for an impact investor for nearly six years, where I was responsible for all our investments related to energy access and the energy transition.

I saw many great hardware and deep tech companies that could significantly help combat climate change, but they struggled to raise funds from other funds because they were perceived as too capital-intensive or too R&D-intensive. At the same time, I realized we are not going to solve the climate crisis with software alone. 

Back then, investors shied away from hardware investments. I was talking about this one night with a friend who had just received funding from FORWARD.one. He suggested I meet the team, and I immediately fell in love with their investment thesis. That was over three years ago, I joined and became one of the partners soon thereafter.

What is FORWARD.one’s investment strategy?

We’re an early-stage investor focused on seed investments, though we occasionally participate in Series A rounds. We start with initial tickets between €1 million and €2 million, but we reserve substantial capital for follow-on investments since industrial and deep tech companies require significant ongoing funding. We can deploy up to 20 percent of our fund into a single startup, allowing us to double down on winners in our portfolio.

We continue following investments through Series C and D. We invest exclusively in industrial tech and deep tech companies, always focused on hardware or the intersection of hardware and software. Our sectors include semiconductors and quantum, industrial efficiency spanning IoT to automation and robotics, and climate and energy tech. We’re pan-European, with our main markets being the Netherlands, the DACH region (Germany, Austria and Switzerland), and the Nordics.

Why are investors now embracing hardware after years of avoiding it?

We’re seeing generalist funds move toward deep tech propositions for two main reasons. First, AI has made creating a software company significantly easier, which means interesting ideas can be replicated more readily. Hardware has patents, IP and specialized know-how that’s difficult to copy.

Second, we’ve realized globally that due to geopolitical tensions and the climate crisis, we need both software and hardware to stay competitive. The recent renewed interest in defense related startups also helps accelerate this trend.

How do you evaluate industrial startups at such early stages?

Many of our portfolio companies are spinouts from technical universities, which provides a strong foundation for technical innovations becoming companies. We’re able to invest pre-revenue and we’re comfortable taking commercial risk, and engineering risk when it comes to the technology. We accept engineering risk as long as there’s no fundamental risk to the technology anymore.

Within hardware, we specialize in technologies we believe are truly scalable. Hardware is a broad field that can range from building entire factories to licensing models to selling the software necessary to operate the hardware. Our strength lies in helping portfolio companies make that transition from technical innovation to commercially focused organization. We do so by working with venture partners with a strong sales background who can for example help in hiring the first sales employee, setting up a CRM system and in optimizing the sales process. That’s a key differentiator for FORWARD.one and really helps our portfolio companies scale.

We always require some proof that the market is waiting for the technology, whether that’s a pilot program, revenues, customer interviews, a letter of intent or a research collaboration. Technical innovation can’t just be great on paper; it needs market validation.

What’s your approach to helping technical founders commercialize?

We often see early-stage deep tech companies that are groups of engineers passionate about their technology who want to productize it. When they need to think about product-market fit and commercialization, their instinct is to hire another technical person for sales. There’s a misconception that selling technical products requires a technical background. We also come across technical founders who believe that as long as their product is the best on the market, it will sell automatically. They risk talking to customers too late to validate their assumptions. And sometimes, it is not the best tech, but the best sales team that is able to grab the market share. 

How does the European deep tech ecosystem compare to the U.S.?

European startups are significantly more capital efficient. Because we have a smaller VC ecosystem and often compete with U.S. competitors, European startups achieve impressive results with limited funding. One reason also being that hiring technical talent is cheaper in Europe. However, when you want to raise larger Series B rounds and beyond, European founders often need to look toward American VCs for sufficient capital.

The VC ecosystem in Europe is younger than in the U.S. The number of European VC firms with consistent track records capable of deploying, for example, €500 million effectively is limited because we don’t have many funds that have shown consistent performance over multiple fund cycles. It will take time, but geopolitical tensions and reports like the Draghi report are waking Europe up to the need to finance our own innovations and build our ecosystem.

In terms of company culture, European founders typically are less focused on, and see less value in storytelling, branding and marketing compared to their U.S. counterparts. In the U.S., when you raise a seed round, the first thing you do is tell everybody about it. In Europe, we see founders who keep their heads down and build. 

What’s your perspective on the future of climate tech investing?

I don’t think it matters what you call it. Whether you call it climate tech, energy resilience or energy independence, these are all innovations that help society move away from fossil fuels. That market remains strong for obvious reasons, including geopolitical independence. Besides this, much of climate tech is about making industry more resource efficient, which means cheaper production.

In the VC peak of 2021-2022, substantial climate tech capital was raised, leading to inflated valuations. Many startups without solid business models got funded, and not all those funds have performed well. That hasn’t helped climate tech’s reputation. The political landscape has shifted away from climate, but climate change is still there. The startups with solid business models that save money, save energy and increase energy resilience are still able to raise money. We still invest in climate tech, but also look at other sectors like Semicon, Quantum, Automation or Robotisation. 

How do you define deep tech?

I would say it needs to be truly transformational innovation. To be honest though, if you look at our portfolio it’s not all deep tech. Like I have pointed out before, sometimes it is not the best tech that is able to conquer a market, but the best team is. We invest both in what we call ‘tech plays’ and ‘sales plays’. All are B2B industrial innovations, but some are ‘deeper tech’ than others. 

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