Connecting data in our physical world to drive decarbonization

As mentioned in my post "What's the decarbonization tech investment case?", one of the themes that we focus on at SSV is the incredible explosion of data across our physical world. There are now hundreds of billions of sensors that capture operational and performance data across our buildings, cars, trucks, ships, manufacturing equipment, energy grids, supply chains, networks and other physical assets and infrastructure. These ‘physical industries’ (sometimes also called the ‘difficult-to-abate’ sectors in decarbonization parlance) represent nearly 40% of global GDP and more than 70% of global emissions.  That’s a lot of data.  And a lot of emissions.  And a ton of economic value.

And yet, much of this data is not yet used to optimize operations or sustainability.  Rather, it often sits at the sensor level, disconnected from other data and from applications that can drive business and decarbonization use cases.  Hence, at SSV, we are excited by the opportunity to connect, parse and use this data at scale.  In other words, we think horizontal platforms in edge computing, edge orchestration and blockchain will unify distributed asset-based data, and increasingly power an app layer where thousands of use cases can be solved - from predictive maintenance in power grids, to resource optimization in buildings and manufacturing plants, to energy trading between distributed energy generation points such as wind turbines, solar panels, EV charging points and buildings, to carbon credit auditing and exchanges, and much more.  We call this theme 'connecting the physical world' – and it has huge implications for emissions reduction and investment value creation.

Over the last few decades, much of software investment has focused on 'connecting the networked world'.  Trillions of dollars was created at both the infrastructure and app layer, in businesses like MuleSoft, Splunk, Snowflake and countless others that you know well.  We believe that over coming decades there will now be an explosion in value creation from companies connecting the physical world - both platforms that integrate with distributed assets to unify and parse data across the physical world, and applications that enable particular vertical use cases such as load balancing in an EV charging network. There will be software-only platforms that integrate with - or sit on top of - existing physical assets and help digitize them (like energy grids or manufacturing equipment), and vertically-integrated hardware and software technologies that capture data in hardware and connect it to software and AI. We expect that the best of these businesses will incorporate Gen AI from day one to more dynamically derive business and sustainability outcomes from the data in our physical assets.

In our first fund, we invested in a handful of businesses along this theme. Our Series B investment in Caban Energy is an example of the vertically-integrated business model.  Caban manufactures batteries that power critical infrastructure networks and long-term energy-as-service (EaaS) contracts for operators. The data captured in each battery seamlessly links to a proprietary energy management system (EMS software) with countless use cases. Our investment in Pratexo is an example of the software-only business model. Pratexo’s edge computing platform connects distributed energy and industrial data letting customers build their own applications (and leverage Pratexo’s no-code Gen AI app builder) or adopt the company’s monitoring and maintenance applications.

We believe that Europe, with our strong industrial, technical and sustainability base, is well-positioned to be a leader in this growing investment category.  At SSV, we see numerous opportunities in our pipeline to continue investing along this theme.  And, we’re eager to hear from you if you’re building a decarbonization technology leveraging distributed data across our physical world!

A brief note - You might previously know us as BCP Ventures. That's our first fund from our GP team. We're now Smart Society Ventures, based in Geneva and London.