Max Werny is a Venture Associate at Zero Carbon Capital, a deep tech climate fund backing founders across Europe with transformative scientific innovations that reduce costs and emissions.
Who are you and what does Zero Carbon Capital do?
My name is Max Werny. I work for a climate tech investment fund called Zero Carbon Capital. We’re based in London and Berlin and back visionary founders across Europe with pre-seed and seed investments.
I’ve been with Zero Carbon since November 2023, when I joined from another climate tech venture capital fund in Germany called Extantia. By training, I’m a chemist. I spent my research years in a few different places. I started out at the Technical University of Munich, then spent 6 months each at the National University of Singapore and at the Max Planck Institute in Berlin. I finally ended up in the Netherlands to do a PhD in catalysis, which has proven to be quite useful for what I do now – assessing climate technologies at very early stages.
After my PhD and before starting out in venture capital, I had a great year in industry at Heraeus Precious Metals, where I was working in different project management roles. Eventually, however, I wanted even more impact on what was happening in the climate tech space. Venture capital seemed like a good way of doing that since a lot of climate tech funds were emerging and were specifically looking for people with technical backgrounds to help understand what they were investing in.
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What kind of technologies and companies are you looking to back?
What really drives our investments is the ability to unlock significant CO2 reductions with the capital that we provide to founders. We want the technologies we invest in to reduce 0.5 gigatons of CO2 equivalents a year by 2050. So the bar is relatively high when it comes to emission reductions. A logical outcome of this is that we do not invest in any software related products or companies. We only invest in physical technologies or hardware that can make a real difference in terms of emissions.
Within that space, we’re quite broad. We invest in everything from baseload energy generation and direct air capture to ag tech, sustainable fuels, and battery materials. What’s really important for us is the emission-reduction potential coupled with a very high level of innovation and compelling unit economics to give a startup a clear competitive advantage.
What qualities do you look for in founders?
First of all, we look for a founding team. We don’t invest in solo founders for multiple reasons. Most of the founders we back are trying to build complex things that need a larger founding team with different skill sets.
We generally like to back scientists who are going for the entrepreneurial route. Someone who might have discovered something in the lab and now wants to commercialize it. But to do that, we also expect a certain level of charisma, a certain ability to communicate effectively, both with us as investors, but also with customers. Communication is probably one of the most important skills that you need to bring to the table.
There definitely needs to be a subject matter expert on the team. We don’t want the scientific expertise to be outside of the startup. A good amount of coachability is also important. For a lot of founders, especially in Europe, where you don’t get that many serial entrepreneurs, it is a learning journey and we are there to help. We expect them to be open for help and advice. It should be a constructive working relationship between the founder and the investor and not just a transactional relationship where we provide the capital and they do the rest.
We’re very hands on. We like to support, we like to get our hands dirty, and really help at every level of the company and value creation. A good founder also has vision, is a pioneer. Can you think outside the box and anticipate trends before they actually become trends?
How do you assess a founder’s ability to navigate the long timelines involved in deep tech and climate innovation?
A lot of the people we speak to have some form of education in STEM subjects or the natural sciences. So they’re aware of what it means to develop a physical technology. It doesn’t happen overnight. It usually needs several years and the whole scaling process needs even longer. They already have this understanding through their education.
It’s often the founders who ask us: “Are you aware of the development timelines we need? How do you handle those? What are the expectations?” So our expectations are that we invest in you and we know that your technology will probably need, more often than not, a good 8-12 years to reach the stage at which we can possibly make an exit.
There are so many variables involved with building ventures. A change in political landscape could, for example, set a company back by a couple of years. The potential tariffs that we’re seeing, they’re not exactly great. Those are significant hurdles and we just don’t know what’s around the corner. So we are aware of the timelines and are always trying to re-assess the risk when it comes to a particular technology or sector.
How does the European venture capital climate compare to the United States and what trends are you seeing?
The entire VC community is obviously a lot more mature in the United States. You have a greater number of investors, you have more capital. You see the benefits of that specifically in the climate tech space when it comes to late stage investments (series B and beyond), what people classically refer to as “the valley of death.” There’s a greater number of US investors that assist at that stage of company-building or scale-up. Europe is still developing in this area. It’s something that European founders are aware of, that it is advantageous to orient yourself toward the US when you reach that stage.
Given the somewhat stark changes in the political scene in the US, the European venture capital ecosystem is starting to realize that we need to become more independent. Hopefully this will catalyze the emergence of a greater number of funds dedicated to the growth stages. We won’t be entirely independent from the US but it will definitely initiate rethinking in Europe about how to become less dependent on other countries and other geographies politically, but also economically.
This means setting up European investment funds that cover not only the very initial stages where we see a lot of activity, but also the later stages so that we can scale European ventures successfully. Europe needs a few success stories to motivate and empower potential founders and create more momentum. Once people’s risk appetite changes, the entire ecosystem will become a lot more dense and productive, and hopefully we’ll then see a larger number of successful climate tech companies.
How does the regulatory environment in Europe impact climate tech compared with the US?
The US started out positively with the Inflation Reduction Act a couple of years ago. The macroeconomic landscape back then was actually quite favorable for climate technologies to emerge. Now that has unfortunately changed to a dramatic extent.
In Europe, we are seeing positive signals. In the UK, the Labour government is actually quite determined to enforce green policies and to get clean technologies off the ground. We’re also seeing it in some other European countries. Germany has recently pledged €100 billion to climate and energy transition projects. But we still need to do better. All this regulation, all these policies, all this support from governments is positive, but it needs to be maintained and needs to be seen through. We need to avoid empty promises. We need to make sure that the targets that we set ourselves are turned into reality.
Is this a period of opportunity?
It absolutely is. In Europe, most of the larger economies remain dedicated to reaching their climate goals. We need to be realistic, however. It’s going to be a really tough journey to reach those targets by 2050, but we need to keep doing what we’re doing because missing a target by 10 or 20 percent is still better than missing it entirely.
In Germany, we’ve got this new €500 billion infrastructure and defense fund and €100 billion of this is going to be dedicated to climate investments. This is definitely an opportunity as long as we have all the funding mechanisms in place across every stage of a startup’s journey. We need dedicated funds for the growth stages that are designed to to deal with the complexities of financing CAPEX heavy technologies. And we need to make sure that these technologies not only reduce emissions, but are also cost competitive or provide cost benefits to the people operating them and to consumers.
Green technologies might sound sexy, but at the end of the day, we need green technologies that get corporates to stop in their tracks, take a look at them and say: “This stuff is not only green, it actually will help us improve our profitability in the long term.” We’ve got everything we need to succeed in Europe. We’ve got the capital, and we’ve got the talent, for sure. There are lots of great universities here, and I think we’ve got the early stage investors. What’s missing to a certain extent is the later part of this ecosystem, investors and government-backed funds for the growth stages.
We also lack standardization across different countries. In terms of size and population, the EU and the US are not too different, but culturally, there are quite a few differences within Europe. You’ve got language barriers and a lot of administrative barriers within the EU. Hopefully, the European Union’s recent efforts to standardise and streamline the process of founding a startup will bear fruits as time passes.
What technology or policy trends for the next five to 10 years are you watching?
We invest a lot of our time into tracking everything that’s happening in the carbon removal space. At the end of the day, we not only have to reduce our emissions, we have to actively remove carbon from the environment and atmosphere. Financial penalties for carbon emissions are hugely important and impactful and will drive a lot of change. The European Emissions Trading System is worth mentioning here. The sooner the price levels for CO2 emissions increase, the larger the pressure on corporations will become to implement green technologies.
I am also curious to see how the Critical Raw Materials Act impacts Europe as a whole. It defines targets for the primary production of resources, for mineral processing (refining) and for recycling. This could catalyze an industry, which unfortunately has fallen behind in Europe. We produce and process very few minerals in Europe and that needs to change. In the last two years, we have been seeing a lot of momentum in the space of battery recycling, which represents a great opportunity to source valuable raw materials such as nickel, cobalt, lithium and graphite.
How do you define deep tech?
In most cases, deep tech is something physical and disruptive, derived from fundamental science or engineering. It comes with significant technological complexity that ultimately guarantees that the product or technology has a competitive edge.