Meet the investor who is helping Canadian startups break into the Southeast Asian market

Michael Gryseels co-founded Antares Ventures last year, to help scale innovative deep-tech solutions. To date, he’s invested in four “truly exceptional” MaRS ventures.

Michael Gryseels isn’t interested in funding the latest buzzy app. The researcher turned consultant and tech investor has bigger things in mind. For the past dozen years, Gryseels has been working in Singapore, “figuring out how technology can transform industries, economies and society.” Last year, he co-founded Antares Ventures to help promising startups from around the world break into the Southeast Asian market, “where they can drive commercial and social impact.”

Gryseels and his team scour the globe for deep-tech startups working to solve big, intractable problems such as climate change, food security, healthcare and energy. And they’ve found a rich ecosystem here in this country. “Canada has been our go-to place to look for companies, particularly in cleantech,” he says. “The founders and cohesive ecosystem are so strong.” To date, Gryseels has invested in four startups, all of which are graduates from the MaRS Women in Cleantech program: Summit Nanotech, Open Ocean Robotics, Ayrton and Genesis.

Here, Gryseels shares what he looks for in startups, the secret to breaking into the South Asian market, and what he likes most about Canadian entrepreneurs.

Tell me about Antares — what type of companies do you like to invest in?

Our intention is to bring world-class deep-tech companies to Asia and scale them commercially. But to do that, they need to have a product that is commercially ready, and so if they’re too early-stage, we can’t really help them. We care less about revenue, because we think that it’s not a very insightful predictor in deep tech. We look more at the quality of feedback we hear from the startups’ customers. So we always talk to the customers, and we try to understand how relevant a solution is for them. How far have they gone in testing the product? What’s the feedback? Are they ready to buy more?

What problems in Southeast Asia are you looking to solve?

This region has massive sustainability challenges. Climate change is a very urgent problem — there have been a lot of extreme weather events here. Population growth and a rising middle class are intensifying food security issues, and there’s a problem with productivity in agriculture. It may seem strange because the region is very fertile, but countries like Indonesia are importing rice because their own productivity is not enough. Energy transition is difficult here. The region’s energy demand is skyrocketing, but most of the region is still powered by coal. None of these countries have nuclear power. There’s not enough wind around the equator, so wind is not an economical option. It’s also very hot, humid and cloudy, which means that solar radiation is not that high. It makes the renewable transition more challenging. Healthcare is also a challenge, particularly with access to care. Cities here are expanding massively: in 10 years, the population is expected to grow by approximately 50 percent, but urban planning is not keeping up. And so many of these cities are, from a livability point of view, a challenge. On one hand, this region is growing faster than the rest of the world, but it has a number of big issues that are unresolved. But I believe technology is part of the solution.

What’s your method for finding solutions?

It’s not easy. In the pre-investment stage, we invest significant resources in research. We have a team in Vietnam that takes three to four problem statements every month. And then we have informal research collaborations with some of the large consulting companies like McKinsey and BCG. We also have a group of advisors that are deep in healthcare and energy. We have a research collaboration with the Cleantech Group. We leverage these relationships to understand the micro perspective on a problem and what is missing. We spend time customizing the reports for our region. Once we understand the context, we go out and look for companies. When we engage companies, we use the research to make sure that there’s a fit ahead of our investment.

So how did you spot the opportunity with Calgary-based startup Ayrton Energy?

Our investment with Ayrton was a result of a three-month effort in which we mapped the entire hydrogen value chain. The research gave us an insight as to where hydrogen solutions are being implemented. While it’s not necessarily being used in Southeast Asia, it is there in India and Australia from a production point of view and in Korea and Japan from a consumption point of view. While scanning the value chain, we realized that there are very few people working on the problem of transport and storage. When we spoke to project developers, they all highlighted that the main thing that they needed to make their projects more economical and practical was a solution for hydrogen storage and transport. Then we looked at all the existing solutions and tried to understand why these do not work and what alternatives could work. We came up with liquid organic hydrogen carriers (LOHC) as a promising category. We then scanned all the LOHC companies in the world and found Ayrton. I’m convinced their solution is more economical, more practical and more scalable than anything else in the market.

Aside from a promising solution, what do you look for in a founder?

We believe in the concept of founder-market fit. You can refine a product and make it better to fit a market but you cannot fix founder-market fit. Julie Angus [Open Ocean Robotics], Amanda Hall [Summit Nanotech] and Natasha Kostenuk [Ayrton Energy] are perfect examples of founder-market fit. They understand the market because they have been in it and have depth in that domain. We look at the experience of that founder over the last 10 to 15 years and how that helps drive a distinctive solution. Then, we look at leadership skills. We look at how committed they are. Are they open-minded? Do they listen? Are they curious? Are they flexible? Are they resourceful?

Once you invest, how do you help startups expand into Southeast Asia?

This is not a region where you come and set up a sales office, hire some people and just go on selling. The way into this region is to partner with players that have existing access. That’s what we try to do.

We start in Singapore, because that’s where we are based. We’ll then replicate the process in Malaysia, Indonesia and the Philippines. Within each of the markets, we would have one or two in-country advisors. Typically, these are retired executives with deep networks who can help our founders with additional connections. And then we have a number of resources, like people who can help with business development and marketing. If they want to attend a local conference or trade exhibition, we have a resource that can help them.

You invested in Open Ocean Robotics earlier this year. What has your work with them been like so far?

We scanned the region to see which market is the best fit and receptive for autonomous data monitoring. So we’ve been introducing Julie to the government agencies in Singapore and working with her to find distribution partners here. Their technology can be used differently in each market. There are challenges in the South China Sea where their technology has applications. The Philippines has a massive security challenge and needs additional boats. Indonesia has a big offshore oil and gas industry for which seabed mapping is a relevant application. We are making the right introductions to our network in Malaysia and Indonesia. We opened the doors and managed to connect her with very senior people. And now, we’re doing the same on the private sector side, trying to find who could be relevant commercial partners for her in Singapore.

A substantial portion of your investment portfolio consists of Canadian companies. What is it about Canadian entrepreneurs?

All of the Canadian companies we’ve invested in are truly exceptional. For example, Julie and Amanda didn’t wake up one day and say let me start a company. No, they came from that background. Julie is an adventurist who has been on the oceans. She understands the oceans inside out. Amanda is a geophysicist from the mining and the oil and gas industry. Both of them put their own money to start their company. They’re also extremely resourceful. They have this charisma that attracts a lot of people who want to help them, whether it’s government, private sector or from other individuals.

The Canadian ecosystem is very supportive — more than any other country in terms of R&D support, demand generation support and organizations that are building up the ecosystem. We invest globally so we can compare. I think it’s one of the most integrated ecosystems. Somehow in Canada, it feels fairly coherent and it helps companies. For example, the Trade Commission brings Canadian companies to Asia. I’ve seen the Trade Commissioner several times here in Singapore. I don’t see the U.S. doing that. So there is an ecosystem approach to making your companies successful.

And this might sound counterintuitive but, the Canadian ecosystem is not as developed as the U.S., which leads to companies that are actually more robust. At the early stages, it’s unlikely that a company will get a seed cheque of $10 million, which happens in the U.S. In Canada, founders have to work very hard for $2-million cheques. I had to lead, as a Singaporean investor, a pre-Series A for Open Ocean Robotics and Summit Nanotech. It tells you that there’s a lack of private capital in Canada. There was no institutional investor. That means these startups have become exceptional companies with no VCs backing them in the seed stage. The companies that survive take longer from inception to series A, but the companies they build are more resilient and resourceful. That’s good for us.

Are you a climate tech investor interested in getting connected to the MaRS Climate team? Reach out to Leah Perry, senior manager in cleantech at MaRS, to learn more.

Photo courtesy of Michael Gryseels; Image source iStock