Investor Insights: Hans Maenhout on Betting Right in the Raw Materials Revolution

EIT RawMaterials: What current trends in the raw materials industry excite you the most, and where are you seeing the biggest potential for investment?

Hans Maenhout: Historically, new materials development has been driven by sustainability or performance, both of which remain critical today. Recently, sovereignty has been added more prominently to the list, due to obvious geopolitical reasons. Ideally, a technology should address at least two, if not all three, of these areas.

A fourth, often overlooked aspect is techno-economics of new materials and technologies. Even if a product is more sustainable, higher-performing, or enhances supply security, customers are all too often unwilling to pay a premium for it. For instance, a ‘green premium’ typically only materialises in B2C markets, where brands can capitalise on it in their marketing.

Finindus is heavily embedded in the metals industry, given our funding by ArcelorMittal and our affiliation with our sister company OCAS, a Belgian steel research lab within ArcelorMittal’s global R&D network. This strongly influences our appetite for the types of technologies and materials we invest in. We get less excited about pure chemical or semiconductor investment opportunities unless there is a strong link back to the steel and metals industry. We’ve backed companies like Expanite (stainless steel and titanium surface hardening), MagREEsource (recycling of permanent magnets), and Rein4ced (thermoplastic composites including metal fibre), to name a few.

EIT RawMaterials: What are the key criteria you use to evaluate raw materials startups and projects before investing?

Maenhout: As we are a very technology-oriented investor, it all starts with the basic science: Can this even work? We need to understand the remaining technology risks, both in terms of the material’s integration into end applications (performance) as well as its manufacturability (scalability and cost).

The second question is: Does this solve a significant problem for a sizable customer base in a unique way? The target market needs to be big enough to justify a venture capital investment. We look closely at market dynamics, including customer segmentation as well as competing solutions and companies.

A key requirement is protecting the claimed Unique Selling Point (USP) through either formal (patents) or informal (know-how, trade secrets) IP rights. Otherwise, it becomes a pure time-to-market race, often won by whoever has the deepest pockets.

Last but not least, we look at the team. It should have the execution capabilities or at least an understanding of what competencies and resources (including financial) it’ll need. None of this is ‘rocket science’, but these factors are crucial for turning a venture into an ultimate success.

EIT RawMaterials: What makes the Investor Day at the EIT RawMaterials Summit particularly valuable to you?

Maenhout: From an investor perspective, there are not too many events that focus exclusively on materials. In the past, as a materials-oriented investor, you were considered a real ‘stepchild’. Now the world has woken up to the importance of a secure, sustainable and cost-effective supply of materials. The topic is hotter than ever. The EIT RawMaterials Summit is a great place to meet like-minded experts—both from the investor and the corporate sides.

EIT RawMaterials: What advice would you give to startups pitching their innovations at the Investor Day? What makes a pitch really stand out to you?

Maenhout: A good pitch, in my humble opinion, addresses in a short and compelling way most of the elements mentioned above: show that there is a large ‘problem’ to solve, prove that you have a competitive, market-and customer-validated solution, and communicate clearly your vision, roadmap, and how you (will) build the capabilities and resources needed to succeed.

About Hans Maenhout

Hans Maenhout has served as an investment director and partner at Finindus since 2013. Prior to that, he was the CEO of a materials startup company co-financed by Finindus. Passionate about technology, sustainability and entrepreneurship, he scouts for investment opportunities within Finindus' key focus areas and takes active board roles in portfolio companies. Hans also connects tech companies with the right people at ArcelorMittal, one of the world’s largest steel groups.

Explore the full Investor Day programme 

Investment and financing will be further discussed on the main stage of the EIT RawMaterials Summit, 13-15 May in Brussels. Don't miss key sessions such as "Unlocking Capital for Europe's Raw Materials Future" and "Crossing the Valley of Death: Europe's Raw Materials Start-up Ecosystem."