Fernandez: Infrastructure investors in FOAK assets play for follow-on platform scale
Mario Fernandez · FOAK tales · Jan 16, 2025 · at 39:36
Mario Fernandez, head of Breakthrough Energy Catalyst, discusses what infrastructure investors look for when underwriting first-of-a-kind climate tech projects.
0:00 / 0:26exact quote · 26.9s
720p mp4 · rendered on demand · StarZero watermark
“What we've seen is most of these infrastructure investors really play for the platform, right? I'm putting X hundred million dollars in the first project. What I really want to do is put a billion dollars into your next two or three projects, and a lot of them are getting options for those projects, but because what they really, they don't want to do A one and out project. They don't want to do a 102 hundred million dollar investment. What they really want to do is see that company through that platform formation”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Mario Fernandez
Fernandez: $70B infrastructure funds hold 15-year zero-loss records across all projects
“There is 70, 60, seventy billion dollar infrastructure funds that have a 15 year track record that have never lost money on any project they've invested in.”
Fernandez: Climate Startups Succeed by Deploying Tech Directly, Not Licensing
“What we found looking at over 300 projects, 350 projects in the past couple of years, is the fact that the companies that actually deploy their own technology and follow that path
Are the ones that get to success. There are companies that have spent two or thr…”
Fernandez: Skill shortage, not capital, is the biggest FOAK bottleneck
“My, our contention is that capital is an issue, but the biggest issue is the skill set that is required to be able to help the companies see a risk and really assess the risk of that big construction operation of first of a kind.”
Fernandez: Climate tech scaling requires sequential 5-20x demonstration and FOAK steps
“The way we propose to do this is, you know, that company has to follow a path towards that de-risking, and that path in our, ah, experience is you go from a pilot to a five to 20 x demonstration project, and then you go to another 10, 10, 20 times, ah, first o…”
Fernandez: FOAK Project Investors Require at Least Six Months of Demo Data
“What we know is at the end of the day, the investors that come in at the Series C, Series D, you know, most of the time funding or partially funding first of a kind projects, they really want to see six months or more, or performance because things degrade if …”
Fernandez: Startups lock in offtake prices before engineering reveals 2x CapEx
“We find that many times off-takes are priced in a way before engineering, you know, failed one, failed two, engineering have been done, and it's based on optimistic CapEx assumptions. Now, when the companies go through the engineering process and they actually…”