Global Risks

Resiliency is the key to strong investments in a chaotic world

A land clearance at a Malaysian palm oil plantation.

A Malaysian palm oil plantation … but proprietary fermentation processes offer an alternative to such intensive agriculture practices. Image: REUTERS/Edgar Su

Zachary Bogue
Managing partner and co-founder, DCVC
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This article is part of: Annual Meeting of the New Champions

Perhaps it’s ironic, but as the severity of issues such as climate change, deforestation and declining water quality increases, so does our ability to apply emerging technologies to help address them. That’s good, because we are facing potentially cataclysmic changes that could make the earth uninhabitable without swift actions.

Our best dreams can overcome the worst nightmares, and venture capital is a mechanism to lessen and possibly overcome seemingly intractable problems such as climate change. In doing so, it can help to achieve improved living conditions across the globe.

Venture capital has fostered some of our greatest innovations, from the railroads to the microchip to the smartphone, and it is a primary driver of the technologies creating the Fourth Industrial Revolution. Our current computational capabilities were the stuff of science fiction only 10 or 15 years ago. While these new capabilities generate many great ideas for investment, we should be passionate about their applications to science and technology. specifically, in this era of large data sets, cloud computing and artificial intelligence, DCVC backs teams with a defensible algorithmic advantage in solving hard, real-world problems, typically disrupting a moribund industry.

Many of our portfolio companies are on their way to increasing global resiliency. Pivot Bio, for example, is addressing a major problem caused by synthetic fertilizers. At least half of the world’s food supply is dependent on synthetic nitrogen fertilizer, which has deeply negative environmental impacts. Synthetic fertilizer production consumes at least 3% of the world’s energy. Its runoff contributes to about 500 ocean dead zones (including two current dead zones the size of Florida and Massachusetts), and it degrades into long-lasting nitrous oxide which is responsible for about 5% of global greenhouse gas warming.


Using biology, machine learning and computational modeling, Pivot Bio awakens microbes’ natural ability to convert nitrogen from the air to meet the nitrogen needs of crops. The company still has a lot of work to do, but they are on the way to eliminating the need for synthetic fertilizer for major row crops.

By leveraging neural nets coupled with massive pharmacological data sets, Atomwise has patented the first deep-learning technology for structure-based, small-molecule drug discovery. This AI and big data technology harnesses millions of data points and thousands of protein structures to solve problems that a human chemist would take many lifetimes to solve. Their software analyzes simulations of molecules, reducing the time researchers need to spend synthesizing and testing compounds. The company screens more than 10 million compounds each day with a goal to simulate hundreds of millions of chemical interactions per day to predict how they might act in the human body, vastly speeding up the traditional drug discovery process. This dramatically increases drug exploration for the many diseases, including Ebola and malaria, that urgently need new treatments to keep the world's growing population healthy.

Many people don’t realize that palm oil is ubiquitous: it’s in our food, clothes, shampoo and even the biodiesel that powers cars and trucks. But this $88 billion industry has drastic environmental and societal costs. Citing NASA scientists, the New York Times reported that cutting down forests in Borneo for the purposes of palm oil production created the world's largest single-year increase in carbon emissions in two millennia. Palm oil acreage worldwide increased from 15 million acres in 1990 to more than 46 million acres in 2014, concentrated in former tropical forests, releasing carbon dioxide into the atmosphere and destroying habitats for endangered wildlife such as orangutans. But palm oil doesn't have to be a problem. C16 Biosciences uses microbes to produce sustainable (and often superior) alternatives to palm oil. While still at an early stage, C16’s proprietary fermentation processes appear to be able to replace a material amount of global palm oil, while also reducing the shipping footprint by producing the oil closer to its end use.

There are many more examples, ranging from harnessing safe and scalable nuclear energy to power our economy, to producing industrial chemicals our economy relies upon from plants and not petroleum. A final example is Planet, which photographs every square inch of the earth every day from space to help track climate change, one of many valuable uses for this truly novel data set. They downlink, process and manage 6+ terabytes of data every day, and make it easy to build tools, ingest imagery and run analytics at scale. One application includes participation with NASA on a project to create a dashboard of what are called “essential climate variables”. According to an article in The Atlantic, these core clues to planetary health – which include figures tracking the size of leaves, the health of Arctic permafrost and the extent of groundwater reservoirs – could function as a kind of early-warning system for environmental upheaval. Other researchers have used Planet imagery to monitor Arctic lakes, track ships and tally the biomass of forests.

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The goal with our resiliency investments is to build and preserve a world that can support a prosperous, high-quality life for 8 to 10 billion people. While we obviously need significant policy-driven solutions to fully address many of these problems, policy takes a long time, and venture capital can step in to quickly bring innovation to market by leveraging cutting-edge technologies. Fortunately, recent advances show that technology advances could outpace our problems. Given the severity of environmental issues facing society, there’s no time to waste.

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Related topics:
Global RisksClimate ActionIndustries in DepthNature and BiodiversityHealth and Healthcare SystemsEmerging Technologies
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