Steel, who spoke to SustainableBiz in an interview, said the opportunity to lead Deep Sky was a chance he could not turn down considering its business potential, his respect for its co-founder and chairman Frederic Lalonde and its role tackling global warming.
“The only thing I knew for sure is that in 10 years if I didn’t do this, I would look back with serious regret.”
Montreal-based Deep Sky intends to build carbon removal sites at scale using technology from providers around the world such as Captura and Exterra Carbon Solutions. It has offered a testing ground for teams submitting to XPRIZE Carbon Removal and formed a partnership with Canada's Svante to study the feasibility of carbon dioxide sequestration in southern Québec.
OMERS Ventures is the venture capital arm of the Ontario Municipal Employees Retirement System, one of Canada’s largest pension funds. It participated in a $15-million seed round for Deep Sky, along with Brightspark Ventures and the Québec government, and will consider joining a larger fundraise later this year.
Why Steel joined Deep Sky
Steel, a veteran entrepreneur and investor, joined OMERS Ventures in 2011 and took on the leadership role in 2018. He expanded its coverage to Europe and San Francisco while tripling its portfolio to $2.5 billion in assets.
Under Steel, OMERS Ventures invested in Toronto-based climate-tech company Manifest Climate and travel app Hopper, which Lalonde co-founded and leads as CEO. Steel grew to admire Lalonde over the almost eight years he sat on Hopper’s board.
“Over the years I joked that Fred has long been one of the only founders that I’d ever consider working for.”
Steel was initially surprised when Lalonde asked if he was interested in being Deep Sky's CEO, but was convinced to take the helm by its ambition, roster of talent and Lalonde’s involvement. He also cited the visible impacts of climate change this summer that are a reminder of the need for rapid action.
Before he said yes to Lalonde, Steel talked to OMERS’s CEO Blake Hutcheson for his support. After some initial attempts to retain him, Hutcheson relented, and asked how he and OMERS could support the new role.
It was easier to make him budge, Steel believes, because OMERS “cares about the climate.” What better way for OMERS to back public statements about its climate commitment than by giving its blessing for an executive to take on the challenge, Steel recounted Hutcheson saying.
Steel will remain a senior advisor to OMERS Ventures – but have no involvement in its Deep Sky investment.
As OMERS Ventures is invested in Deep Sky and Hopper, Steel addressed the possible conflict of interest. Though he led seed investment into Deep Sky, Steel said he passed on the Deep Sky file and board seat to another partner once he was approached by Lalonde for the CEO position.
As for the upcoming Series A round OMERS Ventures may participate in, Steel said he recused himself from its investment committee.
His priorities as CEO
Steel said he is bringing to the CEO position his abilities in signing and backing talent to help achieve “incredibly ambitious goals.”
“I lead due diligence of new technologies and then into new markets that don’t yet exist.”
Carbon removal is such a field. In a previous interview, Lalonde said tackling climate change will require swiftly building up a multi-trillion-dollar carbon removal industry.
Deep Sky seeks to build sites around Canada to capture and sequester carbon dioxide from the air or sea, which would be sold to buyers as carbon removal credits.
Despite his lack of expertise in the field, Steel said he is learning. The skills he brings to the position include problem solving using technology and building businesses.
Deep Sky is modelling itself after software businesses – moving and scaling quickly to solve problems fast.
“The opportunity here is not to build a company over 20 years. We need this thing to scale really, really quickly at the speed at which I’m used to in the software world.”
The CEO’s goal is to get Deep Sky off the ground. This means setting up the carbon capture and removal technologies, selling the removal credits “immediately” and leveraging its success to launch projects like Deep Sky One, the company’s proposed site in Québec to remove carbon at an industrial scale.
He must navigate Deep Sky through a turbulent market for venture capital. Steel said it is currently one of the most difficult VC markets he’s witnessed, but Deep Sky is closing a Series A round of $50 million or more, proving the company’s strengths.
There is also the challenge of directing the company in a political environment that turns global warming into a polarized issue. For Steel, this is a matter above politics or parties.
It is “the ultimate challenge,” he said, which makes it so exciting.
He plans to settle in Montreal, Deep Sky’s headquarters, and polish up his French as he takes on his new role.