Some retired CEOs go to space. Others move to Hawaii. But Unity co-founder David Helgason chose a different path after 12 years at the helm of the game engine company, which went public in 2020 at a $13.7 billion valuation.
Having stepped out as CEO in 2014, Helgason still sits on the board of the now-listed company he co-founded in Copenhagen in 2004; but most of his time is dedicated to Transition Ventures, an early stage venture capital firm he launched in 2021 to focus on the climate.
It’s a tell that the fund is called “transition” and not, say, “apocalypse.” That’s partly because Helgason is convinced that legacy industries — typically harmful to the environment — will eventually be outcompeted by more sustainable solutions and partly because of his personality. “Friends of mine describe me as a ‘glass one-tenth full’ optimist,” he told TechCrunch.
In an interview at his home near Reykjavík, the entrepreneur-turned-VC shared thoughts on his ventures and the journey that led him from Unity to climate tech, a homecoming of sorts. “It’s kind of embarrassing how fun the climate crisis is to work on,” he said.
A long way home
Unity’s public debut turned Helgason into a billionaire, at least on paper. Market cap has declined since then, but the gist remains: He made lots of money from the company, and this capital became increasingly liquid over the years.
This made it possible for him to become a prolific angel investor, fulfilling his natural penchant for spending time with entrepreneurs. But his climate worries had to wait: As a self-described software guy, he had no clear way in.
That changed when one of his siblings, Ingvar, started a lab-grown leather company, VitroLabs Inc. This led Helgason to get involved with the startup and with synthetic biology more broadly. Eventually, that led him to climate-minded deep tech startups.
Besides his angel investments, Helgason also became a limited partner in many climate-focused funds. “For a while, I was claiming I was probably the most broadly invested LP in climate,” he said.
Both activities brought him the kind of learning he craved. “I always wanted to be a scientist,” he recalled. In his current state, though, he realized he had more value to add as an early-stage investor. Thus, Transition Ventures was born as a venture firm. Helgason already had (and has) a family office called Foobar. Transition Ventures is a different beast, and not just because of its climate mandate.
A proper fund
It would be a mistake to think of Transition Ventures as a family affair. Sure, Helgason and Ingvar’s brother Ari is one of its four partners, but Ari’s résumé speaks for itself. His startup, Fabricly, took part in Y Combinator’s Winter 2010 batch before he became an investor at Dawn Capital and Index Ventures.
The third partner, Kristian Branaes, a London-based Atomico alum, was on board from day one, with the trio shortly hiring New York-based Mona Alsubaei, who learned the ropes of VC at Union Square Ventures and its climate fund. The investment team also includes principal Clara Ricard, who recently made the Forbes 30 Under 30 Europe 2024 list.
While Helgason’s wealth made it possible for Transition to start investing immediately, the partners also made a point of looking for limited partners. “We never really considered not doing it as a proper commercial venture fund,” he said. This meant joining the ranks of other climate funds such as Climate Capital and Chris Sacca’s Lowercarbon Capital. Although it has LPs, Transition does not disclose set fund sizes nor how much it has invested to date and plans to invest.
Despite the fact that Helgason was able to anchor the fund himself, fundraising wasn’t easy. By the time paperwork was ready, market conditions had changed.
“Before we could start fundraising properly, the war [in Ukraine] had started and we went from the hottest market in memory to the coldest market in quite a while, so it was quite a lot of work,” he said.
Once fundraising was done, Transition Ventures ended up with an LP mix that Helgason thinks is quite healthy: some mission-aligned backers, but also more financially driven ones without a climate mandate. In other words, they are there for the returns, which is the commitment of any commercial venture fund.
Having LPs means having to generate returns, and doing so within a limited timeframe, but Helgason is fine with that.
“We’re quite disciplined about focusing on timelines, but the climate crisis also requires that of us,” he said. “We don’t have time for just lingering around and exploring. … We’re in the business of finding companies that are primed to go … and then we help them accelerate a lot.”
A portfolio of projects
Because Transition Ventures sees climate as a theme, not a sector, the 12 companies in its portfolio are quite varied:
Electricity Maps, which calculates the carbon intensity of electricity consumption to optimize usage at scale.
FabricNano, which hopes to make cell-free biomanufacturing cheaper and more efficient at scale.
Heat Geek, which provides independent installers with the support needed to accelerate the adoption of heat pumps.
Odyssey, an online marketplace and software platform connecting investors to developers of renewable energy projects.
Phase Biolabs, a synthetic biology startup upcycling CO2 into ethanol and other chemicals.
Reel, a renewable electricity supplier that lets companies buy power purchase agreements.
Revoy, a swappable battery solution and charging network to turn trucks into hybrid and electric vehicles.
Running Tide, which removes carbon through growing kelp in hatcheries and sinking it into the deep ocean.
Safi, formerly known as TrueCircle, a B2B marketplace for trading recyclables.
Upway, which makes electric bikes more affordable through refurbishment and recycling.
Waterplan, which took part in Y Combinator’s summer 2021 batch and helps companies manage water risk.
Watershed, which helps companies decarbonize their business.
Unlike Helgason, none of these companies is Icelandic, but “that was never the plan,” he said. However, Running Tide uses Iceland as an R&D base, with support from an external team that Helgason helped set up. Now called Transition Labs, it helps climate tech companies leverage Iceland and its natural and societal characteristics to accelerate their scaling up.
Not long after initiating Transition Labs, Helgason moved back to his home country.
“I always wanted to live here,” he said. After spending most of his life abroad, he now resides in one of Iceland’s most expensive properties; although, that price tag is far from unseen in the Bay Area. The house itself is fairly unassuming; its most striking feature is its scenic view of the ocean.
For someone who spends his time worrying about global warming, the ocean is likely a powerful reminder to take action.
“But even to people who say climate change isn’t real, I say, well, it almost does matter, because there are adjacent crises that are so big,” he said. Whether it’s biodiversity or ocean health, Helgason is impressed with the caliber of founders tackling these issues. “The talent is incredible,” he added.
While Helgason no longer fancies himself as an entrepreneur, he also has a new project, Cleanplay, whose stated mission is to “make games a part of the solution in the fight against the climate crisis.”
The project is still under wraps, with details to be announced at the Dice Europe conference in September, but we already know that video game hotshot Richard Hilleman is involved, as is Benedikt Franke, the CEO of Planetly, a carbon management startup acquired by OneTrust in 2021.
It sounds like a great fit for Helgason to combine gaming with investing around climate impact, but his heart now sits firmly with the latter.
“A few years ago, I decided I will only do climate from now on,” he said. Transition Ventures still has work to do on that front; it is “roughly halfway” through deploying its capital, in pursuit of the answer to the question on many investors’ lips: Which climate solutions are best positioned to scale?
Disclosure: Anna Heim traveled to Iceland on an invitation from Business Iceland on behalf of Reykjavík Science City.
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