Some retired CEOs go to space, others move to Hawaii, but David Helgason, co-founder of game engine company Unity, chose a different path after 12 years leading the company that went public in 2020 at a valuation of $13.7 billion.
Helgason stepped down as CEO in 2014 but remains a director of the publicly listed company he co-founded in Copenhagen in 2004. But he spends most of his time working on Transition Ventures, an early-stage venture capital firm he launched in 2021 to focus on climate issues.
The fund is also uniquely called “Transition” rather than “Endgame” or anything like that, in part because Helgason is confident that old, typically environmentally harmful industries will eventually be trumped by more sustainable solutions, and in part because of his personality: “My friends describe me as a 'one-tenth' optimist,” he told TechCrunch.
In an interview at his home near Reykjavik, the entrepreneur-turned-venture capitalist talked about his business, his journey from Unity to climate tech, and his homecoming of sorts. “It's kind of embarrassing how much fun I'm having working on the climate crisis,” he said.
The long way home
Unity's IPO made Helgason a billionaire, at least on paper, and while its market capitalization has fallen since then, the point remains: He made a lot of money from the company, and that money has become more liquid over the years.
This allowed him to satisfy a natural penchant for spending time with entrepreneurs and become a prolific angel investor, but climate concerns had to wait: As a self-described software guy, he had no clear way in.
That all changed when one of his brothers, Ingvar, founded a company called VitroLabs Inc. that made synthetic leather in a lab, which led Helgason to get involved with the startup and synthetic biology more broadly, and eventually with climate-focused deep tech startups.
In addition to his angel investments, Helgason has also become a limited partner in a number of climate funds. “I've argued for a while that I'm probably the most broadly invested limited partner in climate,” he said.
Both activities provided the kind of learning he craved. “I always wanted to be a scientist,” he recalls. But he realized that in his current situation, he could add more value as an early-stage investor. And thus, Transition Ventures was born. Helgason already had (and still has) a family office called Foobar. Transition Ventures is a separate entity, not just for its mission of climate action.
Adequate funding
It would be a mistake to think of Transition Ventures as a family business — Helgason and Ingvar's brother, Ari, is one of the firm's four partners — but Ari's pedigree speaks for itself: His startup, Fabricly, was part of Y Combinator's winter 2010 batch before he became an investor at Dawn Capital and Index Ventures.
A third partner, London-based Atomico alum Christian Branaes, was on board from day one, and the trio quickly hired New York-based Mona Al-Sbaei, who cut her venture capital teeth at Union Square Ventures and its climate fund. The investment team also includes Clara Rickard, a principal who was recently named to Forbes' 2024 Europe 30 Under 30 list.
Helgason's assets allowed Transition to start investing immediately, but the partners also focused on finding limited partners. “We never considered doing this as a proper commercial venture fund,” he said. This would mean joining other climate funds such as Climate Capital and Chris Sacca's Lower Carbon Capital. Although Transition has limited partners, it has not disclosed the size of the fund, how much it has invested so far, or what its future investment plans are.
Although Helgason was able to anchor the fund himself, raising capital wasn't easy: By the time the paperwork was ready, market conditions had shifted.
“Before we could start fundraising properly, the war [in Ukraine] “It's been a pretty challenging process because shortly after the market opened we went from one of the busiest markets I can remember to one of the coolest markets we've seen in a long time,” he said.
Once the fundraising was finished, Transition Ventures had landed on what Helgason considers a pretty healthy LP mix: some backers aligned with the mission, others without a climate mandate and more financially motivated. In other words, they're in it for the profits. That's the commitment of a commercial venture fund.
Having an LP means it has to generate profits, and do so within a limited time frame, but Helgason is OK with that.
“We've been pretty disciplined about focusing on timelines, but the climate crisis also demands that of us,” he said. “We don't have time to just hang around and explore. … We're in the business of finding companies that are ready to go … and then helping them accelerate significantly.”
Project Portfolio
Transition Ventures views climate as a theme rather than a sector, so the 12 companies in its portfolio are highly diverse.
Electricity Maps calculates the carbon intensity of electricity consumption and optimizes its use at scale. FabricNano aims to make cell-free biomanufacturing cheaper and more efficient at scale. Heat Geek gives independent installers the support they need to accelerate heat pump adoption. Odyssey is an online marketplace and software platform that connects investors with developers of renewable energy projects. Phase Biolabs is a synthetic biology startup that upcycles CO2 into ethanol and other chemicals. Reel is a renewable electricity supplier where companies can buy power purchase agreements. Revoy is a swappable battery solution and charging network that turns trucks into hybrid and electric vehicles. Running Tide removes carbon by growing kelp in hatcheries and sinking it into the deep ocean. Safi, formerly known as TrueCircle, is a B2B marketplace that trades recyclables. Upway makes electric bikes more affordable through refurbishment and recycling. Waterplan joined Y Combinator's summer 2021 batch to help companies manage water risk. Watershed supports companies in decarbonizing.
Unlike Helgason, none of these companies are Icelandic—“that wasn’t the original plan,” he says—but Running Tide, backed by an external team that Helgason helped set up, is using Iceland as an R&D hub. Now called the Transition Lab, it helps climate tech companies leverage Iceland and its natural and social attributes to accelerate their expansion.
Shortly after launching Transition Lab, Helgason returned to his home country.
“I've always wanted to live here,” he says. After living abroad for most of his life, he now lives in one of the most expensive properties in Iceland, though at a price not unheard of in the Bay Area. The house itself is fairly modest, but what's most impressive is the beautiful view over the ocean.
For those concerned about global warming, the ocean serves as a powerful wake-up call to action.
“But for those who say climate change isn't real, I say it almost matters, because there are adjacent crises that are so much bigger,” Helgason said. Whether it's biodiversity or ocean health, Helgason is impressed with the founders' ability to tackle these issues. “The talent is incredible,” he added.
While Helgason no longer considers himself an entrepreneur, he has launched a new project called CleanPlay, whose mission is to “make gaming part of the solution in the fight against the climate crisis.”
The project is still being kept under wraps, with details due to be announced at the Dice Europe conference in September, but we already know that it involves video game mogul Richard Hillman and Benedikt Franke, CEO of carbon management startup Planetly, which was acquired by OneTrust in 2021.
For Helgason, combining gaming and climate impact investing seems like a good fit, but his heart is currently firmly in the latter.
“A few years ago, I decided that I was going to just work on climate change,” he said. Transition Ventures still has work to do in that area: The firm is “about halfway” to deploying capital, seeking to answer a question on many investors' minds: Which climate solutions are most scalable?
Disclosure: Anna Heim visited Iceland at the invitation of Business Iceland on behalf of Reykjavik Science City.