TO DO this job, you must be an optimist first and foremost, says Steve Mahon, founder of Low Carbon Accelerator, the venture capital firm that specialises in green technology investment.
Set up in October 2006, it was the first green technology fund to list on Aim. Attracting institutional investors was a lengthy battle: “The investment community likes to follow a trend and we couldn’t offer that because the companies we invested in were so new,” says Mahon from his office just off Oxford Street.
Investors were worried that green technology firms would meet the same fate as IT companies did in 2001, but Mahon, two business partners and two members of staff persevered. They even invested some of their own money to win confidence. The fund has grown to more than £50m, after having attracted investors such as pension funds. This is due to a shift in attitudes towards climate change and an acceptance of the need for renewables, Mahon says.
A PhD in geophysics who graduated in 1994 from Newcastle, Mahon has always had an interest in technology and the environment. His first job was for Qinetiq, the business solutions provider. In 2001 he moved to Sentec, who produced the first generation of energy smart meters. After a hiatus from work– he took a three month trip to Australia and New Zealand–Mahon returned to Britain, and worked for a government-run technology development agency before deciding there was a gap in the market to provide financing for green technology companies. The Low Carbon Accelerator fund was born.
The UK’s energy regulator, Ofgem, recently suggested a minimum price for alternative energies to encourage investment in green technology. “Regulation changes have been great for us,” he says.
Even with government help, low carbon technology firms require lots of nurturing to become successful. Mahon’s investments usually have a five-year horizon and he expects only half to be successful. Good investments have included Proven, a UK-based manufacturer of mini wind turbines – popular as they are less intrusive – and Sterling Planet, a renewable energy producer based in the US. Mahon has big hopes for Sterling Planet. He wants to help the owners to develop the business and grow revenues to over $500m in the next three to five years.
Mahon’s plan to deepen the investment landscape for low carbon technology is slowly coming to fruition. If Sterling Planet becomes the success that Mahon expects, Low Carbon Accelerator will cement its reputation as a trailblazer in green investment.
CV | STEVE MAHON
Family: Married with two children
Home: London during the week and Newcastle at the weekends.
Drives: A nine-year-old Ford Mondeo: “It still works so I see no reason to get rid of it,” says Mahon.
Reading: Critical Mass, by Philip Ball. It takes physics to another level and argues that insights into the behaviour of particle matter can be transferred to the mass behaviour of human beings.
Hobbies: Running. “I run around the site of the Olympic Village two to three times a week,” Mahon says. He averages six miles a run.
Mahon used to be a middle distance champion cross country runner and played for Millwall football club’s youth team. He says excelling at sport as a youngster helped him to become an entrepreneur, making him disciplined, single-minded and determined.