In conversation with Stephan Heller on funding a greener future

In this interview, Stephan Heller, Founding Partner at AlphaQ, talks about the energy-focused or energy-related funds they’re investing in. He also discusses challenges in VC investment in the Middle East energy sector and how they can be addressed.

Acknowledging the need to utilise clean energy is one thing. Funding the entities that help accelerate the use of it is another. This is where venture capitalists come in. By providing essential funding and support, they play a pivotal role in turning bold ideas into scalable solutions.

In 2023, however, global VC investment in clean energy startups declined for the first time since alternative energy technologies began attracting significant VC funding in 2015. While the 6% drop to $11.6 billion reflects broader economic pressures, it’s a modest dip compared to the 38% plunge in total global VC funding across all sectors.
Despite the recent decline, opportunities abound for investors willing to prioritise long-term impact over short-term returns. As a fund of funds, AlphaQ Venture Capital takes a diversified approach, investing in VC funds and directly backing transformative companies across sectors, including clean energy.

In this interview, Stephan Heller, Founding Partner at AlphaQ, talks about the energy-focused or energy-related funds they’re investing in. He also discusses challenges in VC investment in the Middle East energy sector and how they can be addressed.

Interviewer: At AlphaQ Venture Capital, your mission is to democratise diversified access to venture capital. Can you share some energy-focused or energy-related funds you’re currently investing in or exploring? How do these funds support global efforts to attain a more sustainable future?

Stephan Heller: At AlphaQ Venture Capital, we prioritise investing in funds that are tackling the most pressing challenges of our time, including climate change and the transition to sustainable energy. Two funds we’re particularly proud to support are Nucleus Capital and Pale Blue Dot, both of which have a clear focus on funding climate and energy innovations. These funds are investing in groundbreaking startups working on solutions that range from carbon removal to scalable renewable energy systems, contributing significantly to global sustainability goals.

On a personal level, I am also actively involved with Marvel Fusion, a deep-tech company developing laser-driven nuclear fusion technology. Fusion, in my view, is one of the most promising long-term solutions to meet our exponentially growing energy demands. While it’s not an immediate fix, its potential to provide virtually limitless, clean energy underscores the need to invest early in transformative technologies.

The intersection of venture capital and climate-focused innovation is where we can have the greatest impact — supporting the visionary teams and startups that are not just building products but reshaping entire industries to ensure a sustainable future.

Interviewer: With decades of experience under your belt, can you share how you identify and prioritise investment opportunities in the energy sector, particularly in the Middle East?

Stephan Heller: Our approach is to focus on future technologies where there’s a clear gap between the region’s ambitions and its current capabilities or risk appetite. In the Middle East, we see an undeniable push for leadership in clean energy and sustainability. However, the region often invests too late in cutting-edge solutions, paying a premium to adopt technologies developed elsewhere.

We believe there’s a significant opportunity to invest earlier, bringing transformative companies to the region for proof-of-concept (POC) projects and local development. This approach ensures the Middle East becomes not just a consumer or fundraiser for these technologies but an active contributor to their creation and industrialisation.
By aligning investments with GDP contribution goals and prioritising localising talent and innovation, we can bridge the gap between ambition and execution. The key is to identify companies that not only align with global sustainability trends but also have the potential to make the Middle East a hub for energy innovation, rather than simply a sales or deployment market.

Interviewer: Energy investments are quite delicate in the sense that they require balancing long-term sustainability with short-term profitability. How does your firm navigate this challenge while supporting sustainable and green energy initiatives?

Stephan Heller: At AlphaQ Venture Capital, we exclusively focus on the long term. By investing in venture capital funds and startups, our attention is on the big vision — the kind of solutions that can transform industries over decades, not just generate quick returns.

For us, short-term profitability is not a deciding factor. What matters is whether the team behind the technology has the expertise, resilience, and stamina to execute their vision. Investing in green energy and sustainable initiatives requires patience and conviction, and we believe that those who can look beyond short-term challenges are the ones who create generational impact. Our role is to back these visionary founders, giving them the capital and network they need to succeed.

Interviewer: What unique challenges do you see for venture capital investment in the Middle East energy sector, and how can they be addressed?

Stephan Heller: One of the biggest challenges is that the most groundbreaking energy innovation still comes from Europe and the US, while the Middle East predominantly acts as a market for sales or fundraising. To truly lead in this space, we need to invest more in local R&D and build out the startup ecosystems that nurture these innovations. Programs like Hub71’s climate tech accelerator in Abu Dhabi are excellent examples of how this can be done effectively.

That said, there is a real competitive advantage the Middle East can leverage: corporate partnerships and POC opportunities. Startups are increasingly willing to build and invest from the region if they find the right support, such as corporate collaborators, access to resources, and pilot programs. This is where the region can outperform Europe and the US — through streamlined processes and a willingness to partner with startups early to accelerate innovation.

By doubling down on these efforts, the Middle East has the chance to evolve from being just a consumer to becoming a global hub for energy innovation and industrialisation.
 

Stephan Heller is one of the speakers at the 49th Middle East Energy, happening from April 7 to 9, 2025, at the Dubai World Trade Centre. 

The event, held under the patronage of the UAE Ministry of Energy and Infrastructure, convenes leading energy experts, innovators, and key players from around the globe to spark innovation, foster collaboration, and shape the future of energy. It’s a premier international trade event for the power industry, covering various topics, such as energy generation, transmission, distribution, and storage. Register now!