The Nichole Wischoff Podcast
01:01:56 · Nichole Wischoff, Alan Chang
[01:01:56] S0: so Yeah. I know this is off the cuff here, but in terms of nuclear, I think we were years out in terms of commercialization, especially in The US market where everyone associates it with something negative. Do you have a take on the future of nuclear and making an impact here? [01:02:12] S1: I I assume you mean fission. Yes. So right now, there there are several issues with nuclear. Alright? There is... Right now the biggest bottleneck for nuclear is regulation. I'll say this is true not just in The U. S, but lot of Western economies. There is an overregulation of nuclear and I'll say excessive regulation that basically makes it uneconomical. So for example, if you look at lot of nuclear in The U. S, there has been effectively been subsidized. So even if the CapEx is paid out or they pay back, there has been a lot of subsidies from utilities, effectively from rate payers, to ensure existing nuclear plants can keep open. So it cannot, as of today, stand as a, you know, cannot be profitable on a standalone basis. [01:03:18] S0: Yeah. It's been fascinating to at least see this from a US perspective, then you've got SMRs, and I'm just so curious, like, where... And then it just feels like this rapid experience of AI.
01:03:18 · Nichole Wischoff, Alan Chang
[01:03:18] S0: Yeah. It's been fascinating to at least see this from a US perspective, then you've got SMRs, and I'm just so curious, like, where... And then it just feels like this rapid experience of AI. [01:03:28] S1: Yeah. So in SMRs, we actually did a deep dive in SMRs as well. It's actually public, you know, on on if you scroll down enough on my x feed. So the problem with SMRs is the cost of regulation doesn't scale down. So if you're trying to build a, let's say a normal nuclear power plant and compared to let's say SMR, the cost of regulations is a fixed cost. So actually on a percentage basis, the cost of regulation actually goes up as you build a smaller nuclear power plant. So SMRs right now doesn't make sense unless there's major regulation reform. Which we hear all the time, right, in the news. There's major nuclear reform coming. But until I I see that happen, know, right now our view is, like, we're so bearish in nuclear until that happens.
01:03:28 · Alan Chang, Nichole Wischoff
[01:03:28] S1: Yeah. So in SMRs, we actually did a deep dive in SMRs as well. It's actually public, you know, on on if you scroll down enough on my x feed. So the problem with SMRs is the cost of regulation doesn't scale down. So if you're trying to build a, let's say a normal nuclear power plant and compared to let's say SMR, the cost of regulations is a fixed cost. So actually on a percentage basis, the cost of regulation actually goes up as you build a smaller nuclear power plant. So SMRs right now doesn't make sense unless there's major regulation reform. Which we hear all the time, right, in the news. There's major nuclear reform coming. But until I I see that happen, know, right now our view is, like, we're so bearish in nuclear until that happens. [01:04:23] S0: Yeah. There's... I was at Valor Atomics also recently down in LA, and I mean, I think the amount of time you have to spend in DC, at least here in The US, is is astronomical. I think folks are obviously bullish in the new administration from this perspective, but to your point, who knows? And so it's a big risk and a big cost. Speaking of CapEx, though, so you've raised a 170,000,000 so far from great funds. What do you think in terms of capital intensity it requires to really, like, reach escape velocity? I mean, you guys are already valued at 5,000,000,000, but that could be a trillion. So, like, how much more capital do you think this requires?
01:04:23 · Nichole Wischoff, Alan Chang
[01:04:23] S0: Yeah. There's... I was at Valor Atomics also recently down in LA, and I mean, I think the amount of time you have to spend in DC, at least here in The US, is is astronomical. I think folks are obviously bullish in the new administration from this perspective, but to your point, who knows? And so it's a big risk and a big cost. Speaking of CapEx, though, so you've raised a 170,000,000 so far from great funds. What do you think in terms of capital intensity it requires to really, like, reach escape velocity? I mean, you guys are already valued at 5,000,000,000, but that could be a trillion. So, like, how much more capital do you think this requires? [01:04:57] S1: Yeah. So I think I think it's important to distinguish between, like, equity and and and debts Yep. As well as, like, crypto markets. So there are pros and cons to each capital type, right? And for example, equity is great for zero to one type capital, right? So if you try and get to zero to one and you try and prove, let's say, business model, x is [01:05:29] S0: When you probably can't even get a debt facility yet because there's not much
01:05:29 · Nichole Wischoff, Alan Chang
[01:05:29] S0: When you probably can't even get a debt facility yet because there's not much [01:05:32] S1: Exactly, exactly. However, if we try to go from one to n, debt is great for that. Frankly that's how we distinguish. So for example, the first few utility scale projects was completely equity funded. And now we're going to raise our first debt facility for future projects. So yes, capital intensive, but people tend to forget venture capital is actually just a very, very tiny percentage of capital allocation for the big... From the big, you know, LPs. Right? You know, ultimately, infrastructure is, you know, infrastructure is a large portion portion of that. [01:06:22] S0: Yes. No. Absolutely. It's like building a data center. Like, it's like most of it is. I guess for your first project, you'll probably be 50% equity, but then that can go down dramatically to maybe 20, 10, and then it's entirely debt. So not great venture investments, I'd say, even though some funds are are dabbling there. In terms of your growth over the next one or two years, so do you plan on having full scale offices in Ireland and Spain and The US? Do you want to be... I know you've got a small New York one, but do you want to be centralized in The UK? Or what are your plans for that as you scale the team? [01:06:53] S1: So we hire where the talent wants to wants to stay. So we we have no dogma in, you know, where we wanna build. Okay. So right now, just to give you an idea, we have roughly 40% of the team is in The UK. Mhmm. 60% is distributed across Europe and [01:07:12] S0: Oh, wow. Okay.
01:07:12 · Nichole Wischoff, Alan Chang
[01:07:12] S0: Oh, wow. Okay. [01:07:13] S1: The The States. So we hire... Like, when we make an offer, we always offer someone to either relocate, right, you, or you can stay where you are. [01:07:26] S0: That feels very anti Silicon Valley at this current moment. I'm curious. Was this the Revolut way, or is it just like something personal to you where you're like, this is a part of our culture? Like, we don't wanna make you uproot your entire life and family to come work here, and we can still [01:07:39] S1: do things. It's a pragmatic way. [01:07:42] S0: Fair. [01:07:42] S1: Right? Not not everyone wants to move. Like, it it is not up to me to decide where you wanna stay. Right? [01:07:48] S0: Yeah. Yes. [01:07:50] S1: Are you to... Like, we will never never... Like, I think it's very dumb to... You know, imagine you meet a talented engineer. Right? And talented engineer say, okay. I I don't wanna move. It'd be very dumb to say, oh, no. You can't join us because you don't wanna move. [01:08:04] S0: Yeah. You you would hate 90% of what's going on in San Francisco at this moment, but everyone's very, gotta be in the office, 100% of the team. If you won't move, no job. And it's pretty extreme, but this comes in waves. I think everyone's so excited about the AI opportunities that that's just the case currently. And I mean, I just moved [01:08:21] S1: back as well. Maybe for those engineers, they can jump to use.