Alan Chang On Raising $78 Million To Accelerate Renewable Energy Adoption Globally

After leading another great startup to scale and become profitable as their CRO, Alan Chang has raised tens of millions of dollars to take on what is perhaps the largest and most impactful industry on the planet. His startup, Tesseract, has attracted funding from top-tier investors like Woorton, Accel, Balderton Capital, and LeadBlock Partners.

In this episode, you will learn:

• The state of the energy industry
• How Tesseract is setting out to change things
• Alan Chang’s top advice before launching a business

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About Alan Chang:

Alan Chang served as Board Member at Agrica, and served as Chief Investment Officer at Builders Vision. He also served as Board Member at NOWDiagnostics.

Alan served as Partner and Managing Director at Capricorn Investment Group. He oversees Capricorn’s multi-asset class portfolio of investments in Asia and emerging markets, as well as Capricorn’s global venture portfolio.

Alan served as Board Member at Suminter India Organics. Prior to Capricorn, Alan worked at DFJ New England with early-stage venture investments and at Montgomery Securities (now Banc of America Securities), advising technology companies on corporate finance.

Alan is a CFA charter holder and received an M.B.A. from Harvard Business School and a B.S.E. from Duke University, graduating cum laude with a triple major in Electrical Engineering, Computer Science, and Art History.

Connect with Alan Chang:

• Crunchbase
• LinkedIn
• Forbes
• PitchBook

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So we have a very exciting founder today. You know we’re gonna be talking a lot about growth. We’re gonna be talking about. You know the differences in the landscap in Europe in in the Us. But I find that we’re gonna find the interview today. Very inspiring so without far ado let’s welcome our guests today Alan Chang welcome to the show. So originally born in Hong Kong so how was live growing up there. Give us a little file walk through memory lane.

Alan Chang: Um, thank you for having me.

Alan Chang: Um, yeah, ah, very yeah is a great city. very very very very busy everything you need is within you know like a one mile radius but yes I’m buy but ah, but yes, it’s it’s. And also so you can you can certainly can. You can do water sports you can hike and you can you know poddy all within a 15 minute drive so yeah pretty pretty fun.

Alejandro Cremades: That’s amazing and and and I guess you know in your case, Why or how did you get into physics and and things like that.

Alan Chang: Yeah, So yeah I I chose physics at University because at the time it was the hardest thing I knew right? So and I just wanted to yeah, push myself and see Yeah. So I like to solve problem I like to solve complex Problems. So physics. The hardest thing I knew and that’s why I chose it.

Alejandro Cremades: And you and and also you moved so even you doubled up the the challenge because you went from Hong Kong to um to London so why? why not staying around you know in in Hong Kong why why why going to London.

Alan Chang: Yeah, so I went to London chose London because for if I get better with trines. So Hong Kong’s coach is quite traditional. Um, there isn’t that many that that many entrepreneurship startups going on there like people let’s per say there.

Alan Chang: Unless you’re a doctor lawyer or working in investment banking or you work in Mckinsey you’re not very well respected. So if you’re starting up people will see what you do? what do of like um yeah, that’s that’s that’s one of the main reason why i’ll.

Alejandro Cremades: Now for you when you move to London and you studied physics eventually you know like 1 thing is pretty interesting here because rather than going into the traditional careers. You know that you would go after um university especially going to imperial. Ah, college which is one of the best universities when it comes to to engineering science and other you know stuff you know in the world but they’re based there in in London you chose the startup world. So how did you come across? you know the whole startup you know venture world and. And why did you think that was a ah good idea you know right? after where after school.

Alan Chang: Um, actually I always wanted to and stops so I decided that you know Stlos was my what I wanted to do when I was a kid. Um so a lot of people offft university they they tell me the same thing I’m interested star then they will end up I ph.

Alan Chang: Invent some ba or something like that. So I you know I just ask myself if if I if a like start so much and I’ll just do that straight away I don’t have to go for more steps just to do that.

Alejandro Cremades: And how did that law for startups develop I mean at what point you know you’re like this is really where I want to you know, be participating in.

Alan Chang: Yeah, So I think really helped that my dad was also like um so I had a love exposure from him about Entrepreneurship. So I Just found the whole whole startups. Very very exciting. Like gets me up gets me going.

Alejandro Cremades: And what were some of the things that you learned from seeing your father being an entrepreneur entrepreneur himself and and also through him going through the ups and downs and the ups swings and downsrings that you experience when you are building something from nothing.

Alan Chang: Yeah I think ah I think it’s probably you know on an emotional level like high is it very high right? Sometimes you fitt feel like you’re a king in the world and then lots are very low right? You feel like you made the biggest mistake in your life. Um. But then I think what’s exciting is growinging something from scratch and then yeah make an impact. Yes, That’s probably what draw draw draw me to it.

Alejandro Cremades: So then in this case for you Why going and working at ah, another startup versus building your own right after school.

Alan Chang: Yeah, so I actually tried doing at school and then I realized actually I know nothing about this I’m I’m very bad at this. So then the next best next best option was to you know work in a startup from you know from founders and know what they doing right. Um, So yeah, just how I accidentally met. Yeah met my rev.

Alejandro Cremades: So then let’s talk about Rebellu Why rebellute And how does rebellute coming to the picture.

Alan Chang: Yeah, so I’ll say I came came across world by accident. Obviously at the time it was very very small company. Very very early stage I think for memory this yeah only for for for people working there back then? Um, so. Yeah, the first I met Nicola who was like super super smart. It just came across a very very small way. Um, and yeah, also I think what won me over was he after the interview he asked First of all, he asked me a very tough problem to solve. It told me a lot but then I eventually got it and then second is that he offered me a role. Me g off interview right? So I’ve never experienced such speed right? So I I basically said yes now what kept what kept make kept me sick. What? what What made me stick around was is actually quite simple right? Um I think Nick and flat day like. I don’t I don’t think I’ve met any other fund that works as hard as they do right there they’re they’ you know, very early in the morning really early in night. Um, and basically seven days a week in the office um and at the time we work in this coworking space where there’s like you know, like couple of hundred other startups right out there. And after 7 pm the whole core space is dead apart from apart from Rev and whole weekend was also dead apart from Rev that’s how I knew revel was something special and I just sticked around.

Alejandro Cremades: So and let’s talk about rebellu you know you enter there when they were just you know 4 people and they I mean rebel loot I mean right now is a billion multiple billion dollar company ah but I guess how was how were the early days of working at rebellute.

Alan Chang: Um, yeah was super fun, right? I think yeah, there was loads of problems. Um, there was not a lot of people to solve it so being able to solve different types of problems. Although. Um, yeah, wasre. Super super fun, right? Um, and yeah doing also doing things that you’ qualified to do right? Um, yeah know I wo multiple hats and you know every almost every day There’s a new problem that I’m definitely not Poor. Qualifie to do well would not be laughed do in a big but bigger company see that I’ll say yeah.

Alejandro Cremades: Because because for the people that are listening to really understand it. What was what was rebel What was what is rebel and what is the business model of rebel.

Alan Chang: So yeah, So Rebels ah affected global neobank and a financial super app right? So It’s basically everything money in a single app right? So with it’s fx stocks crypto insurance and and and credit right. Or in a single app. But yeah, 10 times cheaper and 10 times better.

Alejandro Cremades: Now rebelute. Ah what you were saying there is that you were wearing multiple hats. So how would you say that your role changed as the company you know was maturing because I mean the company has you were there for about 7 years I mean 7 years in startup. World in dark years I mean it’s like insane what you can do and what you can learn so how would you say that your role matured from time to time over the course of those 7 years

Alan Chang: Yeah, so like I saw as the individual contributor right? And then I ended up running customer service then I took on operations and then I ran international expansion and then I helped scale. The. Operations team to over hundred people um and operations is you know, essentially ah, kind of general problem solv that we throw into different areas of the business to either firefight or or just know solve more different problem different problems in the area in the. Business and then and then you know and then covid hit and then profitability was a really really big problem and then the Ceo asked me to take the company profitable. So we yeah we did that in in seven months from losing 40% revenues because of lockdowns to in seven months data we we hit net income zero which was a you know public pilot milestone and then and they’re obviously going top line right? Um, so yeah so I’ll say

Alan Chang: I I put myself in different problems when when the different when it needs are the best to change over time.

Alejandro Cremades: A rebel you know a company that has raised over one point seven billion you know valued at about thirty three billion what what kind of exposure did you get to to the financing rounds and and how those expectations matured from round to round.

Alan Chang: Yeah, so I had some exposure um you know from from meeting rebels investors to yeah, had a chance to I yeah, ah, yeah, go go for the due diligence process and somehow that works. Um, yeah, and and yeah, the. And obviously the expectation right? Um, yeah I think you know obviously exploit expectation of early stage or midstage or late stage is very very different but I’ll say like Rev was quite disciplined in the sense. Um, it was like. But knew you know what was important at what time. Um, so I’ll say you know. For example I think probability was important but now everyone’s talking about probability but rev was talking about possibility much earlier like and there’s a achieved possibility for for for while already. Um, so I think selfreization of. What is important as opposed to what investor expects is why investors work is very Marketd driven way whereas I think having this self-awareness of when what what is important and when um is very important and I think were able to have that.

Alejandro Cremades: So after 7 years you decide it’s time to turn page. Why.

Alan Chang: Um, yeah, so I I feel like you know there’s a lot of smart people working fintech already and also revellets in the very good position. It’s Jerekin a lot of cash. It’s ah you know it’s going.

Alan Chang: Quickly. Um, and it’s almost turned to a machine right? if machine just you know just compound every year. Um, so I decided to you know move to energy because there’s not that many ah players and energy that’s helping to you know. Having us to transition and accelerate to into renewable energy. Um, so that’s that’s really the main reason.

Alejandro Cremades: So then tell us about that transition out of all things. Why energy I mean all you know were was fintech. So why energy is quite a big shift so out of all things why energy.

Alan Chang: Yeah, so I think it’s probably the number 1 problem in the world right right now um I think that’s a number 1 reason number 2 is I would say I I consider myself a problem solver rather than rather than you know by domain. Before Rev I didn’t know anything about finance either or technology for that matter. Um, so but you know I learned right? So I would say I’m I’m pretty confident my learning skills. You know I spent I myself in routine spend you a lot of. Time learning about the space. Um I wouldn’t say we we’re energy experts yet. But I would say we’re probably learning much faster than than um, than incumbence right now.

Alejandro Cremades: So then for people that are listening to us why’t that up being the business model of the company.

Alan Chang: Um, yeah, so effectively we are building a vertically integrated energy company right? And essentially it’s um, a classic story I think which is yeah.

Alan Chang: Build everything in-house integrate everything improve margins build a customer-centric product improve Nps. Um I think this is ah you know I think this is just a playbook I think any consumer company should do in a low nps. Low Nps fragmented industry right? We’re seeing rebel do it. We’ve seen you know Tesla do it. We’ve seen Amazon do it right? Um, so obviously’ll see the business model bugwater is not novel right? We we have seen men made different examples in different industries but I would say it’s It’s quite simple. Really um, though the best product you have integrate everything improve margins pass some savings back to the customer and then go build.

Alejandro Cremades: Now now 1 thing that that is very interesting here too is that I mean being part of rebellute and and helping it to grow so fast you know over the course of those 7 years I mean obviously rebellu today you know it has like. Over like 7000 employees or something crazy like that. What are your thoughts around culture and also around building the team especially since you guys you know recently got started with a company. How have you guys thought about really building the team especially the. The initial players that are coming in and that are going to be setting the standards for the culture of the business.

Alan Chang: Um, yeah, so um, you know I I think Revler had 7 cultural values for memory. Um I brought one over right? which is affecting that settle right. So we want to what that means is you know we’re never set up for anything but top quality. We’re never set up for anything but number 1 um and this is also reflected in hiring philosophy where we’re trying to hire effectively a top top professional football team.

Alan Chang: You know, completing the world cup. Um, and we’re trying to win the world cup so we basically hi you know individuals that have you know, very very high Ti individuals that going to sacrifice effectively. Their. You know other commitments to achieve in all goals right.

Alejandro Cremades: So so in this case I mean for you guys. How much capital have you guys raised.

Alan Chang: Um, we raise approximately seventeen mo sent Seventy Centi eight

Alejandro Cremades: $70,000,000 seven zero seventy eight 78 okay, got it and the how has been that process like because I mean you didn’t wait. You did you typically would go through different financing cycles and in this case I mean so early I mean we’re talking about. Ah, company that literally you know got started. You know last year. So it’s almost no time. So how were you able to get all this money in such a short period of time.

Alan Chang: Um, yeah, so I think I think several reasons number 1 is um I think a t try record course. Um I don’t think there is a lot of fonders of that I would um have ah you know? Ah, ah. Ah, try to look treor rock I oz in the team. The number 2 is lola investors are very very excited about what we’re building. Um I’ll say suddenly from my experience like we scanned the whole energy market and there’s not a lot of innovation going on. Um. Like it’s a huge space. It’s a very hot topic but not of not of you know players trying to bring no sophistication and a customer-centric approach to solving this problem. Um, so I say this combination of these things. Um. That helped us raise a large round and also ah we do need a lot of capital to get started right? That’s ah i’ a third reason we would raise money if we don’t need it but we didn’t know we didn’t we do need a lot of capital to get started. So I said these are top 3 reasons.

Alejandro Cremades: And what was that process like of being able to source also all these investors to make sure that you had the right people for the right reasons.

Alan Chang: Yeah, so I mean luckily you know we we knew some of the vses beforehand right from from from our days at rubook um, and and ah says number 1 number 2 was we were very careful in choosing.

Alan Chang: Who I partner with um and yeah we we we we got to know the partners that they invest in us but beforehand so I’ll say yeah these are 2 main avenue strength. Um.

Alejandro Cremades: And how different is the funding environment in in Europe.

Alan Chang: Um, obviously I don’t know because I haven’t really raised from the Us. But we do have some american investors on our on our investment list but I would say you know there’s there’s.

Alan Chang: Like there is there’s plenty of capital in Europe um, and there is like there’s plenty times the real I’ll say this the fundamental problem and I think there’s not enough entrepreneurs. There’s more capital than pub entrepreneurs right? Um, even for myself like I also you know. Enjoy invest in the site and I would say I have more money can deploy than than you know, successful like what I consider top entrepreneurs I can invest in right? Um, so yeah I so I think for so first for sure that there’s more capital than than than then. And companies I can take capital a good quality companies at least so I’ll say the funding runs pretty good right? Um, even despite the the downtime we’ve seen.

Alejandro Cremades: So in terms of um, you know basicibility here into the vision because obviously to all those investors that you’ve onboarded. You know you’ve sold them on a vision. So Let’s say you were to go to sleep tonight and you wake up in a world where the vision of tesser act is. Fully realized what does that world look like.

Alan Chang: Yeah, ah, it’s great. Question. Um I think first of all ah energy will be cheap, right? It’ll be price like water. So think about right? if we if we think plus principles so renewables is really. Like with all renewables. We talk about really many soly so solar in wind and wind is basically indirectly solar energy and solar energy. We talk about like huge nuclear fusion react in the sky. Um, that can power the 2000. So if you look at if you if you look at all the if you look all the solar energy like that the earth so earth surface gas gets if you even if you get yeah basically that if you take that energy convert electricity. You can power the earth effectively approximate 1000 times over what the earth needs. Um, so. Effectively, it’s really about the roleer of you know solar and you know storage. So you think first principles then you know once we achieve that um you know and there’s areunds of energy right? effectively then energy’s price like water you no longer have to think about. Worry about whether and your your your next month’s energy will go up I’ll say that’s number 1 number 2 is it’s quite simple. One. Ah I want I want a grape I want I want a great user experience with.

Alan Chang: With with my with my utility right now right now, right? Well how most people interact with utility is I set up a recurring payment I forget about it. Don’t bother me again but in ah, other occasional occasional um, an occasion you need to? For example. Ah, get a utility bill to ah do a proof of address to your bank. But then like if you think about it. Let this this process makes 0 sense right? because what we’re doing is we’re translating machine readable data to human readable data and then some companies. And then usually human turn into the human readable data into machine readable data and some companies like computer vision companies or machine learning companies are try and turn that Pdf right into back to machine code. Um, whereas if you think about it. There’s no reason why utility can’t open up api. Like ah you know like Api authentication type service to allow you to press a button and then say okay allow my financial service company to get access to my utility data here. You go right? I don’t have to download some pd so like simple things like this right is I can I can name you like a hundred more examples where there’s fundamental like. Ux is very very bad with utilities right? So a good ux I want to see ah just like you know I want to see great uworks and utilities now just like right now I can press a button I get cab I want to press a button to get solar panels right? and have it.

Alan Chang: Finance completely like Amazon hast prime touch service right? It arrives next day if all installed I just press a button and that’s it and I get all the government subsidies automatically applied I get all the financing just go button right today that doesn’t exist. So I think ah, yeah. Basically to summarize um you know, very cheap energy fully renewable. Great customer experience and everything I need to save me money and energy help me electrify 1 in 1 place.

Alejandro Cremades: So It sounds like it’s a massive market so you were alluding to it earlier that day. There is a lack of innovation around it. You know why?? why? the lack of innovation. Why the lack of perhaps you know awareness or consciousness you know From. Maybe other people that could jump in and and help why is that the case.

Alan Chang: Ah, yeah, that’s a good question um to run us I I’m not too sure why I think ah I think in general in general have some hypothesis right. I think number one to really solve the electrification problem right? You have to you have to deal hard with right? you have to deal with physical work and I think and therefore you have to have to have cabinets. Um I think that puts a lot of entrepreneurs off I think for good reason right. Um, you know if you can if you can solve a problem with just so sas mean that’s that’s great that’s very easy that’s great right but unfortunately you can also solve this problem with justos Sas right? You can’t solve that with software you have to not software alone at least you have to solve the hardware as well. So I think a lot of entrepreneurs are. Ah, scared away from that. Um, however, you know companies such as Tesla and Amazon have shown actually even with capex you can build a very successful business and make a lot of money right? Um, so that’s I say that’s number 1 reason. Um, number two is I think this is really a new challenge right? So effectively if you think about fundamentally if if you look at how we used to do energy generation. Not so long ago so we used to have a big coal plant. Um, you know.

Alan Chang: Usually in a meant mega gigwats range serving about million houses like somewhere middle of nowhere next to a coal mine you send electricity down a very very long cable right? and then to serve the metropolitan area that’s really it like now if you think about it that’s quite you know. Quite simple and usually this big coalli is owned by 1 big company could be state backed right? and then they charge you a monthly but and the good thing of a coal plant is the energy production is pretty steady right? So now you think and know thing I think about the. The energy profile of a co plant right? It kind of produces a pretty flat baseload type profile. Um and and a good thing about co plant is is almost like is basically internal combustion. Engine. You can effective rev right? You can rev a co plant. So let’s see there’s ah, a surgeon demand in like and in energy. Right? So let’s say there’s ah, a football game going on or something like that right? and there’s a certain search in the mind and people turn on Tvs or people you know turning on the kettles or people cooking right? when they go from work. You can basically grab the engine to get more m from it pretty but otherwise pretty simple right? But now we want to trans your renewables. And so good thing about Renews is very few. However, the bad thing is it’s not dispatchable I can’t control how much solar energy I get I can’t control how much wind energy I get right? and also obviously there’s no solar night so you have this like very very fluctuating. You know, energy energy generation profile and also can generate it anywhere right.

Alan Chang: You to be able to only put coalline next to coal mines now it can put solar or wind almost anywhere right? So it’s more become more decentralized but also less predictable and because of this right? It basically creates a lot more challenges in engine right? So historically like. You know there’s not much to it in electricity. It’s pretty simple right? It’s a very simple circuit you have big generator. You have long cables connected every home right? That’s about it. But now you have much more complex circuit right? That requires you know a lot more sophistication right? So I think. It’s a combination of you know capex as well as a changing environment especially around policy because basically and almost every government I’ll say at least in the western world is pushing for your know net 0 right? Um, and they pushing pushing pretty hard. So I think combination of that and income that’s moving slow capex all this I think makes it you know that there for normal players. Um, but at the same time That’s why it excites me right? because because it’s novel players. Um, like okay if no one’s gonna do it then you know why out us right? Someone has to do it.

Alejandro Cremades: Hey, someone has to do it. Someone has to do the work. So Why? that’s it. That’s it. So now imagine I was to give you the opportunity of getting into a time machine and I bring you back in time to that moment where maybe you were still in school at Imperial College and you were wondering about. Really getting into the startup World. You know, maybe building something of your own because at that point you were you were even thinking about doing it on your own imagine if you had the opportunity of having a chat with your younger self at that point and giving that younger alan one piece of advice before launching a business but would that be and why given what you know now.

Alan Chang: I Think my advice would be don’t do it. Don’t don’t do it later. Don’t do it now startingling a business is very very tough like like a lot lot of things like. A lot of things that you don’t think can go wrong. Will go wrong. Um, and yeah, don’t do it unless you’re very racial I’ll see that’s that’s definitely what I with my vice I get to myself.

Alejandro Cremades: I love it I love it now for the people that are listening Ellen that will love to reach out and say hi. What is the best way for them to do so.

Alan Chang: Um, yeah, um, you know feel free to reach me on Linkedin or you know yeah, have like just yeah, have happy chat.

Alejandro Cremades: Amazing, well easy enough Linkedin so Allen thank you? So so much for being on the deal maker show today. It has been an honor to have you with all of us. Thank you.

Alan Chang: Thank you Thanks for having me.

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