Zouk's Views
Insight into technology and sustainability


  • May 2017
    Online education: set to deliver a massive sustainability windfall
  • Online education: set to deliver a massive sustainability windfall
    May 2017

    When I mention in conversation that I am considering an online high school for my preschool twins, I sense the reaction I receive isn’t always based on a full understanding of the facts.

    What is clear however is that the global education system into which my children are about to enter, is one of the largest industries to face disruption through technology advances and change is affecting all areas therein.

    Today lifelong learning overlaps traditional education and training and requires a much more blended approach than we were previously set up to implement. A market of over $5.5 trillion globally, education is split into a series of sectors from K-12 - the sum of primary and secondary education, to graduate and then postgraduate study and on to professional development and finally training and languages. So-called MOOCS (massively open online courses) offer a supermarket approach of delivery and enable access to vast selections of online courses in subjects as diverse as Design Thinking of Innovation to Medical Neuroscience and multiple variations in between and spread across all the education sectors. Today global academic institutions such as Harvard, MIT, Karolinska Institut and Kyoto University as well as companies such as Facebook and Google have opened up their content to a worldwide audience, something previously inconceivable to anyone other than very rich, very privileged or very connected.

    Running in parallel with the advances made in delivering education online, are the challenges facing the workplace. A recent World Economic Forum’s Future of Jobs report predicted that artificial intelligence, robotics, nanotechnology and other socio-economic factors that impact the need for human workers will result in as many as 5 million jobs being lost before 2020. Traditional jobs will be replaced with many new jobs but they will be in more specialist sectors that will require a huge retraining and retooling of the workforce.

    This re-tooling of a workforce marginalised by technological advances, and the educational sector supporting it, is an area we at Zouk are particularly interested in. Institutions in their current format are constrained by curriculum, structures and physical presence and are frankly not in a position to address the requirements of this ever-growing base of students.
    Specifically aimed at the professional development market at executives aiming to reskill themselves and prepare for a future marketplace, is South Africa based company GetSmarter.  Offering specialist online short courses from Universities such as Cambridge and MIT as well as local South African institutions, GetSmarter boasts a 90% course completion rate with students interestingly coming from a split of US, Europe, and the rest of the world.  What makes GetSmarter so exciting in my view is that its high touch business model offers more levels of engagement and global collaboration than most traditional MOOCs.  This is exactly where the businesses that have recognised the importance of creating proper depth and breadth of interaction between students are on a path to real success.

    Alongside the massive social benefits afforded by this shift to democratising content and making it available to anyone globally with an Internet connection, there is also clear evidence of a significant sustainability effect. The obvious sustainability benefits of moving education online are not difficult to detect. Savings made simply though fewer journeys to and from bricks and mortar institutions or reduced requirements for electricity or paper are fairly obvious sustainable benefits and are sizeable.

    However, the area we believe will have most impact is the second level benefits through the vast efficiencies created by opening content and opportunity up to a global audience at the same time as enabling a generation of reskilling for new jobs to take place. We believe that this effect is so huge, that it will have a more significant impact on the planet than either renewable energy or electric cars. Indeed, we would go as far as to say that there is no other sector more core to sustainability and efficiency than online education.

    It remains however that the perceived lack of social interaction provided by online education is where the largest misconceptions lie and where eyebrows are raised when I suggest it. This is simply not an issue. Today increasingly, online collaboration is forming a much more significant part of online courses and so powerful is the opportunity this affords, that MIT for example is in the midst researching this topic in detail in order to ensure a far better online learning experience for their students ensuring social interaction is at its heart.

    So going back to my point about an online high school, it is for all these reasons that I am considering the option for my twins. I recognise the significant benefit they would have with the literal opening of their world, the recreation of the old school classroom and the opportunity to engage with children based all around the world. But I can also see clearly that this is where the future of education - from primary to retooling a changing workforce - is heading unequivocally.
    It is up to us, the investors, to support this expanding sector and facilitate the creation of dynamic new opportunities for education and employment in this evolving Fourth Industrial Revolution.

    This article appeared in Business Green in May 2017




  • January 2017
    Internet of Things: connecting to a sustainable future
  • Internet of Things: connecting to a sustainable future
    January 2017

    From smart fridges, to wearable health monitoring devices, connected energy grids and networked thermostats, a great deal has been reported over the past few years on the potential of digitising the physical world. Today it is clear that ‘the internet of things’ (IoT) is connecting ever more devices over the internet - using sensors and microchips – for machines to talk to each other, to other applications and to talk to us. Our view at Zouk is that IoT is enabling a sustainability revolution with two levels of efficiency at its core – improving energy efficiency in the first order, and generating significant productivity gains through connectivity in the second.

    To put this efficiency gains in context, we can take lighting as an example. A traditional energy efficiency goal would be to design a better lightbulb, which might improve its energy consumption by 10%. In a digital efficiency context, in a ‘smart city’ if every streetlight in a city uses sensors and is connected to the Internet, lighting can be fully optimised across the entire city lighting system – saving energy but also saving time, resources and reducing downtime. By applying analytics to sensors and location data in real time, the improvements are fully automated, take little additional equipment and are highly scalable in nature.

    In fact, there is a quiet revolution underway in our lives and much of this, is made possible by IoT. Everywhere we look, its influence is in our lives - reaching into factories and shops, improving operating efficiencies as well as creating systems in vehicles such as autonomous cars or in flight navigation or in engine efficiency. It is core to human devices that monitor our health, it helps us in the home where systems connected to the internet control our heating or security.

    The improvements in energy efficiency alone are notable. A 2016 AT&T report predicted that a boom in these machine-to-machine technologies could even cut greenhouse gas emissions by almost a fifth in the coming decade – as much as 9.1 billion tonnes by 2020 equivalent to 18.6% of global greenhouse emissions in 2011.

    It is the connectivity improvements that take efficiency benefits to another level.  Alarm systems, city lighting, pallet tracking, water monitoring and pipeline monitoring are all business areas benefiting hugely from IoT providing much optimised processes. Imagine a security system or network of pipelines able to anticipate an outage or fault, well before it becomes an issue. But with the explosive growth in data traffic globally as well as the massive expected ramp up in connected devices, significant improvements in telecommunications network infrastructures will be needed in order to enable the full potential of IoT.

    SIGFOX, a French company and a global leader in IoT, is addressing these demands. By deploying a low-cost, wide area, low-power network operating on unlicensed spectrum, it is able to provide the most affordable and energy-efficient connectivity solution to date, enabling the IoT for billions of new devices. Its innovative business model means that end customers don’t need to roll out their own network and can connect their devices seamlessly anywhere in the world, making it extremely efficient and very cost effective. These improvements promoted by the likes of SIGFOX, we believe will in turn catalyse efficiency gains across other sectors of the economy. Recent McKinsey analysis of the breadth and magnitude of these opportunities puts estimates of the value of IoT at no less than between $3.9 and $11.1 trillion by 2025 with Gartner estimating that 26 billion devices will be connected to the internet by 2020.

    So in conclusion, the combination of saving ‘old’ first order resources such as energy with ‘second order’ connectivity benefits puts the digital world at the core of all efficiency gains. For us at Zouk therefore, there is no doubt that IoT is key to delivering on the sustainability and resource efficiency promises of digital technology.



    This piece appeared in Environmental Finance in December 2016
  • May 2016
    Fintech: liberating capital for SMEs, efficiently
  • Fintech: liberating capital for SMEs, efficiently
    May 2016

    Today’s evolution in sustainable investing of using technology to go beyond the traditional mandate of cleaner and greener, is nowhere more apparent than in the rapidly emerging sector of fintech - a sector we believe to be at the heart of resource efficient investing.

    Fintech has undoubtedly taken the world of financial services by storm, creating new categories such as peer-to-peer lending, mobile payments, virtual currencies, smart money transfer to name a few. Sustainability within the sector comes in two guises. First order resource efficiency in fintech is the carbon abatement effect – the reduction of paper or even power or replacing hardware altogether. Second order savings go beyond traditional sustainability and regard capital as a resource. Fintech companies are disintermediating banks and enabling a mechanism to allocate capital in a highly efficient manner. Inefficiencies are widespread in the financial services sector, and it is poised for technological disruption.

    SMEs have more choice today

    One area for significant resource efficiency lies in addressing the financial needs of small and medium-sized enterprises (SMEs). SMEs are a significant driver for the global economy, representing over half of global GDP and employing nearly two thirds of the global work force. And yet they have been historically underserved due to incumbent banks’ ineffectiveness in dealing with the sector’s high complexity. Today SMEs have real choice when it comes to financial services, and there has never been such an efficient system for completing financial transactions. Companies like Lending Club, the world’s largest online marketplace offer crowdsourcing and bring lenders and borrowers together for a fraction of time, money and effort required previously. Ditto for money transfer, which, until now this was an extremely complicated and costly business for SMEs. The business has now been transformed by peer-to-peer money services like Transferwise, backed by Richard Branson.
    There are other financial technology companies such as mobile payments firm iZettle and financial supply chain company Taulia that are advancing efficiency disruptions in financial services, as recognised by a recent World Economic Forum report. By leveraging combinations of mobile technology, enterprise software and big data analytics, whilst both very different, these companies are able to streamline business processes, such as payments and invoicing, and offer highly competitive products based on a much deeper understanding of the needs of their customers. iZettle, for example, enables even the smallest of market traders to take payments in the same way as larger companies by turning phones into effective POS terminals. This has a huge and positive impact on their businesses. Indeed, evidence has shown that simply having the ability to take card payments can transform a business and lead to significant increase in sales.

    Fintech firms deliver tangible, sustainable savings

    Furthermore, many fintech companies are also delivering multiple orders of resource efficiency. For instance, we see many companies that are displacing legacy carbon-intensive transaction processes, such as paperwork or dedicated terminals – the so called ‘first order efficiencies’. The first order savings of carbon demonstrated by iZettle are through its low paper usage, ie emailed receipts - and reduction in hardware because merchants can use their mobiles - means that iZettle will be saving carbon emissions of 1,100 tonnes per annum by the end of 2016, the equivalent of 1,009 rooftop solar PV systems. These are tangible, sustainable savings.
    Second order savings are those that empower SMEs to streamline their businesses and provide them with access to highly cost-effective financing, effectively helping to accelerate the way they use their cash and stimulating the local economy.  These are extraordinarily powerful. Taulia recognised the huge inefficiencies within the invoicing process. Its invoice discounting offer simplifies this manual process, providing an automated invoicing, which does away with physical paper invoices and relies on digital invoices instead. This e-invoicing is not remarkable in itself but it enables Taulia to offer ‘dynamic discounting’, where a supplier can opt for early payment in return for a discount - a simple idea, with dramatic upside. Many of the beneficiaries of this service are the long tail of small suppliers of large corporations. Taulia has revolutionised their invoicing and cash management processes, ensuring far more business efficiency. Not forgetting Taulia’s first order savings - large amounts of paper are displaced and time is saved in processing invoices the old fashioned, manual way.  We estimate that Taulia could avoid 681 tonnes of CO2 and 48,000 kgs of land waste from 2015-2018 based on the paper saved through e-invoicing.

    Opportunities in fintech are growing exponentially

    The magnitude of opportunities in fintech companies has not gone unnoticed. According to an Accenture report in 2015, global investment in fintech companies grew by 201% globally in 2014, compared to 63% growth in overall venture capital investments. Total invested in 2014 was US$12.21bn, three times the amount quoted for 2013. These trends have been acknowledged by prominent industry leaders such as JPMorgan’s CEO Jamie Dimon, who famously stated “Silicon Valley wants to eat our lunch”.
    So in conclusion, fintech companies take sustainability far beyond saving paper or hardware. The biggest savings made are the bottom line opportunities created by the highly efficient way they liberate capital from the previous constriction of the banking industry. Today’s SMEs can now take part in global business with the same tools as their bigger counterparts. The playing field has been levelled - this is resource efficiency at its most compelling.



    This article appeared in Business Green in May 2016
  • March 2016
    Cybersecurity: winning the battle on two fronts
  • Cybersecurity: winning the battle on two fronts
    March 2016

    Cybersecurity is a sector at centre of a sustainability revolution. It is one, which brings the huge risks created by cybercrime together with a solution that puts two levels of efficiency at its core – improving energy efficiency in the first order as well as saving business resources in the second.

    Cybersecurity critical to fulfilling potential of digitisation

    Cybersecurity, in general, is a must-have for delivering on the sustainability and resource efficiency promise of digital technology. This is because cybersecurity protects critical assets from harm and those assets are becoming more and more digitised and interconnected. According to some estimates, over 40 billion devices are expected to be connected to the Internet by 2020 (ABI research). This includes resource-intensive assets in energy, utilities, agriculture, manufacturing etc. This trend is driven by the promise of huge efficiencies delivered by the bridging of the physical and digital worlds. However the flip side is that these connected assets are also becoming increasingly vulnerable and exposed to cyberattacks, which sabotage the frictionless operation of the assets and hence undermine the efficiency of these technologies. It is for this reason that cybersecurity is a must-have to tap the full efficiency potential brought by digitisation and connectivity.

    Massive cost of cybercrime

    This vulnerability is highlighted by the high profile security breaches that are rarely out of the news these days. Not only are they highly damaging and disruptive to international businesses, they are unimaginably costly. Research by accountants Grant Thornton in 2015 revealed that the total cost of attacks globally was estimated to be at least US$315bn over the past 12 months, a figure they based on estimates of total business lost. McAfee, one of the leaders in cyber security, quotes at the very least a similar figure in a 2014 report on the global impact of cybercrime. These are huge numbers, meaningful for any economy, and there appears to be no slowing in the exponential growth of these crimes.
    Whilst the cost of implementing a comprehensive cyberdefence strategy can be significant, this pales into insignificance when you compare it to the cost of loss of business including lost reputation, a loss of trust and permanently damaged relationships with your customers? There is no doubt that US retailer Target’s catastrophic 2013 cyberattack, which led to customers’ credit card details being made public, had a far more lasting effect than simply the immediate cost of corrective and restorative action. The benefits behind effective cyberdefence become glaringly obvious when comparing the cost to Target of installing FireEye malware detection appliances at US$1.6m with the cost of the subsequent breach, highlighted in a 2014 Bloomberg article. In 2015, Target revealed the data breach cost it US$262m.

    Successful cyberdefence requires a resource efficient philosophy

    However, simply implementing a cyberdefence plan is not enough on its own. FireEye had detected the 2013 attack, however, Target’s internal reporting systems failed to pick up the alert. The bottom line is that for cybersecurity to be successful it needs to be implemented with resource efficiency at the heart of a business philosophy. Otherwise even if the attacks are detected, they will not always be properly identified. Effective cyberdefence requires a blanket attitude to efficiency in the organisation as a whole, one that encompasses internal reporting procedures, governance and processes ensuring that the way the business is run is efficient to its core.
    At Zouk, we see the cybersecurity sector as one that clearly benefits from a resource efficient approach. New companies in cybercrime-detection have been designed in an era where efficiency considerations were front of mind and where the fundamental design of the business architecture has leapfrogged similar businesses where efficiency was of secondary importance. This is where first order, physical efficiencies i.e. those that save energy, also start making a difference.

    Cyphort offers energy and business efficiency

    Cyphort is one such company. Cyphort’s cloud-based, software-only architecture is de facto less carbon intensive than physical appliance-based solutions and therefore enables the company to offer energy efficiency as an additional benefit. This goes beyond simply a desire to be ‘green’ because being more energy efficient basically also means cheaper and more scalable to run. Cyphort’s approach means sizeable energy savings of up to 70-80% compared to existing solutions - also saving similar amounts of energy required for air conditioning of the data centres. From a second order perspective, Cyphort’s software-based approach represents a step change in efficiency, moving to an even more efficient level within the cybersecurity space. Cyphort has a fully virtualised solution that unlike many more traditional cybersecurity firms does not rely on installing dedicated physical appliances. Cyphort’s software based model offers much better scalability and flexibility of deployment, resulting in significantly higher resource efficiency. The bottom line is that this next generation approach to efficiency helps Cyphort’s clients to mitigate massive cyber threats in a truly efficient manner, which saves time, cost and ultimately risk to reputation and future growth.

    Second order savings go beyond clean and green

    So in conclusion, resource efficiency has become more than simply saving ‘old’ first order resources such as energy or water. Today it looks at what ‘second order’ savings can be made within business models, or digital resources, reputation or even time – all of which lead to successful, effective businesses. For us at Zouk, there is no doubt therefore, that cybersecurity is already an area where massive business savings are being made when an efficient cybersecurity solution is employed. When you consider the scale and impact of cybercrime today, an approach that helps companies defend themselves from attack, whilst delivering efficiency savings across the board, has never been so essential. 



    This article appeared on cleantech.com in March 2016.
  • January 2016
    Technology is pivotal to today’s sustainable investing
  • Technology is pivotal to today’s sustainable investing
    January 2016

    Technology is pivotal to today’s sustainable investing 

    For years economists and scientists have been telling us of the impending doom of diminishing global resources and the ensuing catastrophic impact on business. Without doubt, this scarcity has meant we have had no choice but to find more sustainable ways of doing business. In contrast, digital resources have exploded - created by the abundance of information generated in our online age. This has led to a new approach in technology investing, one which addresses the impact of shrinking resources and that creates the means to manage the profusion of new digital resources. By actively managing both, we create better and more sustainable businesses. This is what we call resource efficiency.

    New efficiencies improve resource consumption

    So as investors today, we should be looking for ‘efficiencies’ at the core of every investment – efficiencies in ‘old’ resources such as energy, water or materials and efficiencies in ‘new’ ones, such as data, computing power, networks. Efficiency is not only about ‘doing more with less’; it is about using technology to uncover improvements in resource consumption. Take Google as an example.  According to the company, its data centre servers are now able to generate three and a half times the computing power at the same cost and with less electricity than they did five years ago. Information technology is THE critical enabler for efficiency gains and is the next generation approach to cleantech investing.  As far back as 2010, Accenture wrote a report on the cloud’s unprecedented efficiencies and subsequent environmental impact. Today investors are beginning to recognise that resource efficiency makes not only good sustainable sense but also good business sense. In fact, when you stop to consider this further, it is clear that there are whole swathes of the technology industry that have resource savings and improved efficiencies at their core. Document storage, payment services, security, online education and the sharing economy all have elements of resource efficiencies within. There are some big trends emerging from within a raft of different industries – and we believe there are unprecedented opportunities for investors.

    Fintech benefits from streamlined processes

    The world of financial technology is ideally suited to take advantage of the revolution within resource efficiency. Applepay, launched this summer in the UK, and a timely illustration of advanced efficiency in payment systems. What could be more efficient than being able to pay with your mobile phone? And with these efficiencies provided for making payments, in order to maximise efficiency, the same approach is surely required for receiving payments. iZettle, a provider of mobile payment services and apps, allows an entrepreneur or micro merchant to streamline their entire payment system, and is now the number one provider in Europe. By making this process so easy and painless, the resulting effect is more time for small businesses to concentrate on running their company and doing more business.

    Taking a corporate rather than consumer perspective is Taulia, the supply chain finance company has revolutionized invoice management, by eliminating cash crunches for companies with slow-paying customers. Taulia not only saves ‘old’ resources by saving paper and transport for example, its cloud-based solution creates huge efficiencies by harnessing and channeling massive quantities of data - another classic example of a resource efficient investment.

    Intelligent collaboration streamlines information overload

    Collaboration software on the other hand helps to solve one of the modern day resource problems – that of too much information and how to manage this. Collaboration software is reaping the benefits of a resource efficient approach. Huddle, whose cloud-based content collaboration platform, is delivered via a SaaS-model to enterprise clients, and is disrupting the enterprise technology space and transforming the way that teams and companies work together. Today’s workforce doesn't need just cloud storage, but intelligent collaboration tools that help teams get their jobs done.

    Finally, in today’s new world of devices linking up to talk to each other – so called Internet of Things, this is precisely where the vision of connectivity between traditional industries and enabling technologies becomes a reality. SIGFOX, is one of the most exciting providers of dedicated connectivity for Internet of Things and Machine to Machine communications. It is a pioneer of cost effective and energy efficient two-way connectivity to billions of objects.

    Green is only one answer

    In conclusion, whilst resource scarcity will long remain a critical issue, it is no longer only a ‘green’ approach that addresses the dilemma. Technology is filling the void and creating highly efficient sustainable businesses – efficient in resources and efficient in business model. It is our job as investors to support the growth and development of these companies. Next time you look to make an investment, consider it through the efficiency lens. Today technology indeed plays a central role in ensuring a sustainable approach to investing.



    This article appeared in Alt Assets in January 2016.
  • March 2015
    Sustainability, the new pillar of technology investing
  • Sustainability, the new pillar of technology investing
    March 2015

    Last week I ordered an Uber taxi. It was very efficient, arrived when I asked, took me where I wanted to go and it didn’t cost a fortune. It got me thinking about how today’s efficiency is at the core of every technology investment, just as technology is at the core of every sustainable investment.

    Sustainability is more than greener and cleaner

    But what is sustainability these days? What is clear is that sustainability is no longer simply about greener or cleaner or even about energy savings alone. It can be applied across the board and we have seen a marked shift from what used to be energy efficiency to resource efficiency – doing more with less – and this shift is continuous. So why is it that investing in growth capital in technology markets has become driven by resource efficiency? Well, going back to Uber, a technology investment on one level, but a game changer from a resource perspective from another. It is no longer only about a reduction in cost of going between A and B, or how efficient taxis can be, but a service like Uber goes as far as being able to change the way we use our cars. So much so that we begin to ask ourselves, why do we even need to keep one parked? Ditto for Tesla. Not only do Tesla cars not use a fossil fuel – sustainability in its purest form - but because of that they also use fewer pipes or plugs, there is no need for the type of maintenance we are used to. A sea change, I would say, in the whole way we approach our cars and the entire industry around them.
    If you take this theme a step further and start to look at what most would see as pure technology companies, the blend of sustainability and technology becomes even more evident. Take Huddle, a company which provides large scale document storage, on the one hand a pure technology investment, but on the other, one which effects real savings in resources - in the space, materials, energy - required in storage and collaboration. Can a technology investor afford to ignore resource efficiencies when deciding on an investment? And equally would it be foolish for a cleantech investor to ignore technology investment opportunities?

    Technology is driving a revolution in sustainability

    Technology has no doubt become integral to what many would see as pureplay ‘cleantech’. Take Tanzanian ‘solar-as-a-service’ company, Off Grid Electric as a prime example of how technology is key to its success.  Not only is it providing affordable solar to homes across Tanzania, it is technology that allows Off Grid Electric to be the world’s first massively scalable solar service. It is the way the system works, managed through IT and mobile payments, that makes this business so disruptive. It is not simply about light, and yes the solar power offers 100x illumination for one kerosene lamp, but it is much more about how the internet of things is lighting up Africa with a possible 50 million homes gaining access to light and electricity through this revolutionary approach to technology.
    What we must not forget however, is that these savings in resources will also have an impact on human resources and that jobs are at risk in the efficiency revolution. It is up to investors to create new opportunities for employment through our expertise and understanding of technology. And correspondingly the rise of online education is leading to a positive effect on today’s workplace.
    So even for those investors who don’t consider themselves motivated by sustainability, it can be found at the heart of almost every technology investment. You may discover that your next investment could even be classed as old school ‘cleantech’. Technology and sustainability have become the pillars for successful business models and with the convergence of technology markets, investing with both in mind has become synonymous.



    This article appear in Private Equity News in March 2015