1. Could you give us an update on M&A activity/capital raises and trends you see?
Superficially, Apricum’s job became easier, but doing it well got harder.
The noisy change is that 2021 smashed all records for cleantech financing with numerous, previously unimaginable, billion-dollar fund announcements. New forces unexpectedly emerged via hedge funds or SPACs, and dynamics shifted. Frankly, available capital now exceeds experience or expertise. Any competent firm has been flat out this year. We closed several landmark transactions this year, often for marquee new global clients (with stringent NDAs!). We successfully rebuilt Meyer Burger, advised 40% of the world’s ten largest auto manufacturers, and transformed some company share registers by adding cleantech’s biggest names.
But these dynamics risk the poor allocation of capital and that’s how we judge ourselves. For young cleantechs, our challenge is no longer to find the capital, but to find the right capital. Capital is fungible, but heterogeneous – it behaves differently because its owners have diverse priorities, cultures and timelines. So yes, Apricum had another record year in 2021, but we will judge our success by seeing these investments and companies prosper over the long term. For investors, we have to separate the promising from the promises, to grow their capital so they have more firepower to effect change.
The subtle change, which may be more enduring, is that cleantech’s industries are shifting: VC funding shifted. Energy dwindled from 60% share of cleantech VC in 2011 to just 18% in 2020 as mobility, materials, environment and agriculture surged. Go deeper still, and these boundaries actually blurred: energy storage is not just batteries but software, mobility, heavy industry, materials and infrastructure. So it takes breadth of vision AND depth of knowledge to derisk investments. This plays to our strengths.
2. Why is Apricum opening an office in London and not in a different European capital?
Obviously due to demand. But let’s look beyond that.
First, European capital is commonly seed and Series A, and its valley of death is growth capital: Anglo-Saxon capital is often later-stage, it helps commercialise technologies and deliver growth. So London expansion helps us pull companies through the valley of death.
Second, London remains Europe’s centre for asset management. Cleantech was historically dominated by geographically-diversified corporate VC: its 45% share is almost double that of other venture industries. But with financial investors opening new and larger funds, often concentrated here, the mix is shifting. If our expertise isn’t on hand for them, capital will be burned during the energy transition: poor returns and a poor outcome for the planet. That’s been a rising risk through 2021.
Third, more demand for Apricum’s services requires more human capital. Berlin’s elite cleantech consulting human capital isn’t infinite, so to meet demand we have two options: lower recruitment standards, or expand the available talent pool: international expansion enables us to do that without compromising our standards.
Those factors are more important than any UK leadership in energy storage or merchant financing.
3. Will the London office focus only on corporate finance mandates?
Apricum is about clients, not products. Hybrid working makes location less relevant and we deploy agile teams to solve client needs. If a UK corporate requires consulting insight, London is just the conduit to our industry expertise whether in Berlin, Dubai or here. Yes, London will be our corporate finance centre, but Apricum is unique in blending technological, commercial and financial expertise to solve client problems so that won’t change. The energy transition is often about solving new problems and we do that collectively across borders. As mentioned, London will also add cleantech consulting excellence here as we find it.
4. How will the profile of the London team differ to that of the Berlin team?
Shorter, fatter, wiser! Actually Apricum is already bewilderingly international and diverse – like London. London focuses more on M&A and on equity capital raising, with strategy consulting or project finance expertise remaining where it is now: Berlin and Dubai. We’re recruiting different skills, relationships or product expertise, but the same diversity, high standards and client focus.
Apricum’s new London office is in Mayfair set just off St. James’ Square. It is located in the central London borough of the City of Westminster.
To find out more about Apricum’s corporate finance services or if you have interest in joining the team, please contact Apricum Partner Charles Lesser.