Unlocking the Future: G2 Venture Partners' Vision for Sustainable Industrial Transformation

Blog
Written By Greg Toroosian

For decades, the world's foundational industries — spanning sprawling logistics networks, colossal manufacturing plants, and the systems that power our homes — have largely operated outside the realm of rapid technological disruption. They were the silent giants, evolving slowly, if at all. But what happens when climate urgency meets a new wave of innovation? What kind of future emerges when the bedrock of our economy is infused with the agility of deep tech?

On Episode 92 of the Machine Minds Show, host Greg Toroosian, founder of Samson Rose, dove into this transformative intersection with Neel Mehta, a Partner at G2 Venture Partners. His firm is not just funding the next big app; they are strategically investing in the profound, sustainable overhaul of the industries that build and move our world.

From Kleiner Perkins to G2: A Legacy of Green Growth

Every great company has an origin story, and G2 Venture Partners' roots trace back to the pioneering days of climate tech investing. Founded in 2016, G2 spun out of Kleiner Perkins, where its founding partners, namely Ben Kortlang, Brook Porter, David Mount, and Daniel Oros, had invested together for about a decade. Around 2005 onwards, they spearheaded Kleiner Perkins' "Green Growth Fund," a significant initiative during the "clean tech 1.0 era" when sustainability investing was largely uncharted territory for venture firms.

Their initial thesis, which remains G2's core philosophy, was to target "hard to abate sectors" – traditional, often resource-intensive industries like energy, manufacturing, logistics, transportation, and agriculture. The goal was not just incremental improvements; it was to invest in transformative technology that would make these industries not only dramatically more efficient in their operations but also profoundly more sustainable. This early success included prescient investments in now-household names like Enphase, Uber, and Turo. Carrying this proven philosophy forward, G2 Venture Partners continues its mission to bring centuries-old industries into the digital, climate-friendly era, recognizing that these sectors represent over half of the global economy.

Neel Mehta's Journey: Witnessing Disruption from the Front Row

Before joining G2 Venture Partners in 2021, Neel Mehta garnered significant experience at the forefront of industry transformation. He began his career at Morgan Stanley, where he gained invaluable insights covering the automotive sector alongside renowned analyst Adam Jonas. This early exposure to disruptive trends in mobility, including the rise of Tesla in its nascent stages, profoundly shaped his understanding of how foundational industries can be revolutionized by technology.

Subsequently, Neel took on an "early operator" role at Zoox, the autonomous vehicle company eventually acquired by Amazon. His time there, contributing to strategy, go-to-market, and corporate development, further deepened his expertise in bringing cutting-edge software and hardware to complex physical environments. This unique blend of financial analysis and hands-on operational experience positioned him perfectly for his role at G2, where he helps identify and scale companies driving sustainable change in real-world applications.

The G2 Difference: Investing in the "Missing Middle"

G2 Venture Partners operates as a growth-stage investor, focusing on the "missing middle"—the crucial bridge between early and very late-stage companies. They target companies at their "commercial inflection point" (typically Series B or C), addressing a capital gap where few firms offer the specialized expertise needed for this critical growth phase.

Beyond their unique stage focus, G2 differentiates itself through several key factors:

  • Pioneering Experience & Deep Sector Expertise: With nearly two decades investing in climate tech since 2005, G2's team members are seasoned pioneers. They offer founders a unique, practical perspective, leveraging their insights from navigating market cycles to identify truly transformative deep tech solutions for traditional industries.

  • "Do More With Less" Philosophy in Action: Central to G2's approach, they fund technologies that boost efficiency in industries like manufacturing and logistics by using fewer resources, less energy, and reduced waste. This directly translates to significant climate impact, for example, through robotics in warehouses, reducing logistics' footprint.

  • Unparalleled Network & Hands-on Entrepreneurial Support: Leveraging their deep sector engagement, G2 connects portfolio companies with key industrial players and customers. They provide comprehensive, hands-on support and rigorous processes, essential for navigating the long development cycles of deep tech ventures.

  • Comprehensive View of Sustainability: Beyond financial metrics, G2 rigorously underwrites every investment based on its quantifiable climate impact. They project long-term CO2 savings and environmental benefits, aligning financial returns with significant sustainability goals.

The Quest for Decacorns: Spotting Transformative Potential

G2's investment philosophy centers on finding companies with "decacorn potential"—those capable of growing to $10 billion-plus in value. Achieving this demands a meticulous approach and a specific type of partnership:

  • Rigorous Market Sizing: G2 performs rigorous, bottom-up market sizing, looking beyond immediate projections to quantify a technology's true addressable market if widely adopted. A market under $1 billion, without a clear expansion roadmap, makes decacorn status unlikely.

  • Differentiated, Step-Change Technology: G2 seeks "much bigger step changes" in technology—truly differentiated, defensible innovation that can fundamentally reshape a market. This increases the likelihood of picking the "winner," exemplified by autonomous mobile robots (like Locus Robotics) or sustainable manufacturing processes.

  • Long-Term, Committed Partnership: Achieving decacorn status in deep tech and industrial transformation is a 10-year-plus journey. G2 acts as an enduring, hands-on partner, actively shaping outcomes and guiding companies through the complex, multi-year product development and market adoption cycles necessary for massive 

Market Dynamics and the Rise of AI in Physical Industries

Neel witnessed the peak of climate tech funding before experiencing the subsequent slowdown as interest rates shifted. While the broader market saw a pullback, he notes a significant rebound, albeit with capital now more concentrated in areas like "physical AI" and the re-shoring of manufacturing. This reflects a growing recognition of the strategic importance of domestic production and advanced automation.

The conversation also delved into the pervasive influence of AI. While nearly every firm is now considering AI, Neel emphasized the distinct and often greater commercial viability challenges in traditional, "physical" industries compared to pure software. These sectors move at a much slower pace, requiring real commercial traction beyond mere pilots or proofs of concept. Deployment in these industries is inherently complex, involving extensive on-site work, seamless integration with entrenched legacy systems, and lengthy sales cycles. This stands in stark contrast to the rapid adoption curves seen in software, demanding significant patience and capital.

The Humanoid Debate: Form Factor vs. Brain Power

A particularly engaging part of the discussion revolved around humanoid robots. Neel, drawing from his background in autonomous vehicle technology, offered a nuanced perspective. He differentiates between the "hardware/form factor" and the "brain" (the generalizable AI). While specialized bots excel in structured environments like factories, humanoids' true potential lies in unstructured environments designed for humans, such as homes or even general workplaces, where their versatile form factor becomes advantageous.

Greg, the host, appreciated the flexibility argument for humanoids – their ability to plug into existing human-centric workflows without costly retrofitting of the environment. However, both Neel and Greg strongly emphasized the paramount importance of safety. They drew parallels to the early days of self-driving technology, noting that while technical demonstrations excite, the true maturity of an industry comes when a robust safety framework and regulatory considerations (like OSHA for humanoids) are paramount. This remains a significant hurdle for widespread public adoption of humanoids, requiring careful ethical development and extensive testing.

Impact and the Underrated Traits of Founders

G2 Venture Partners' ultimate impact goal is to identify and empower the few, truly massive companies that will emerge as leaders in transforming traditional, physical sectors over the next two decades. They envision a future where some of the largest companies globally are sustainability-focused energy or industrial entities, building upon the foundations laid by this new wave of innovation.

When it comes to the founders and teams they back, Neel highlighted several critical traits he looks for:

  • Grit and Tenacity: Essential for navigating the highly unstructured, uncertain, and often challenging environment of deep tech startups, where failure potential is high.

  • Versatility: The ability to wear many hats, adapt quickly, and figure things out beyond a narrow job description in dynamic situations.

  • Prior Experience: An often underrated asset, bringing invaluable context and the wisdom to know when to course correct. This experience, born from past failures and successes, provides a crucial advantage in avoiding common pitfalls.

  • Awareness: (added by Greg) This encompasses both self-awareness (of one's abilities, limitations, and areas needing help) and an acute market awareness (understanding the company's positioning, competitive landscape, and the levers to pull for growth). Delusional thinking, particularly from founders, can quickly become a bottleneck.

Neel's advice for budding entrepreneurs underscored the power of execution and consistency. Companies that meticulously deliver on their promises, set realistic goals, and consistently execute their plans—even small, incremental steps—build invaluable trust and a solid track record that attracts later-stage growth capital. Building and maintaining authentic relationships with potential investors, even if they are not investing immediately, is also crucial for future rounds when larger capital injections are needed.

G2 Venture Partners, with its seasoned team and sharp focus on sustainable industrial transformation, is not just investing in the future; they are actively shaping it, one impactful innovation at a time.

Take Action Now!

Prepare to rethink where the most impactful innovation is truly happening. 

Greg Toroosian
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