Investing in "Return on Atoms"
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At Equal Ventures, we invest in the transformation of legacy industries, many of which run on physical assets (think power grids, warehouses, truck fleets, and storefronts). This means bridging “Bits” (technology-driven solutions) with “Atoms” (real-world infrastructure). Across our focus areas, Insurance, Energy, Retail and Supply Chain, we’re seeing a surge in data that has the potential to enhance how these assets are managed, utilized, and monetized. Even small improvements in return on assets (ROA) can generate meaningful enterprise value, but fully capturing that value requires a deep understanding of how these assets operate within capital markets.
My background in real asset investing at Brookfield taught me that physical assets create market value through their dual roles as steady cash-flow engines and strategic inflation hedges. Physical infrastructure isn't valued with the same simplicity of revenue multiples (as venture-backed companies often are), creating a different set of investment considerations for companies operating in asset-heavy industries, particularly when scaling technology solutions for “atoms” based customers.
Ultimately, ROA is influenced by four fundamental drivers:
Generating predictable and quality cash flow streams
Driving operational efficiencies and asset utilization
Adapting to macroeconomic and regulatory shifts
Leveraging technology for performance enhancement
To put this into context (though at the risk of oversimplification): in commercial real estate, value often comes from securing high-credit tenants under favorable lease structures; in logistics, through maximizing fleet utilization and optimizing routes; and in energy, from long-term contracted Power Purchase Agreements (PPAs) that lock in revenue stability. In our other sectors, factors like insurance premiums can significantly impact the net operating income on real estate assets, something I have firsthand experience with. Together, these fundamentals reduce risk premiums and position assets as inflation-resistant, long-term, high-value investments.
Through this lens, we invest in companies that use technology to unlock new value from physical assets across our focus industries. A strong digital experience alone isn’t enough. Successful solutions must align with how real asset investors evaluate risk, efficiency, and returns. This requires understanding not just the technology itself, but how it translates into measurable improvements in asset utilization, cost management, and long-term value creation.
Insurance: Restoring Insurability In A Climate-Challenged World
The stability of real assets relies heavily on stable insurance coverage, and without it, the foundation of property-based value can quickly erode. Climate-driven risks, from wildfires to coastal flooding, are pushing premiums to unprecedented levels, threatening not just individual properties but entire communities as coverage becomes increasingly unaffordable or unavailable. This dynamic undermines real estate markets by compromising cash-flow stability and rendering critical regions effectively uninsurable. When insurance becomes unattainable, lenders are unwilling to underwrite these properties, creating a financing gap that makes new development and investment increasingly difficult.
Stand Insurance addresses this crisis by combining AI-driven risk modeling with physics-based, proactive mitigations (e.g. replacing fire-prone landscaping with gravel), helping homeowners and property managers restore insurability and control costs while preserving long-term asset value. This model not only safeguards investor returns but also ensures communities can maintain and protect their real estate markets in a volatile climate era. When insurance rates accurately reflect a property’s actual exposure, owners avoid unpredictable cost hikes and coverage gaps that can disrupt cash streams, supporting stable and predictable cash flow even as climate volatility grows.
Energy: Unlocking Distributed Asset Value
The rapid rise of distributed energy resources (DERs) such as rooftop solar, home batteries, electric vehicle chargers, and smart appliances is transforming the energy grid from a centralized infrastructure into a dynamic, distributed network. However, the current energy system struggles with integrating and utilizing these decentralized assets effectively. Traditional grid management tools (like DERMS) often target specific asset types, require lengthy deployments, and create fragmented, inaccessible data silos. This lack of real-time integration and interoperability prevents utilities and asset owners from maximizing their operational and financial returns, ultimately limiting the potential value of these hardware investments.
Texture directly addresses this challenge by providing a neutral, device-agnostic "operating system" designed explicitly for energy networks. Texture integrates data from a wide variety of DER devices and third-party sources into a single, actionable platform. By offering immediate visibility into asset performance and enabling automated, real-time operational control, Texture empowers energy asset owners and utilities to significantly enhance asset utilization and profitability. Its intuitive, rapid deployment and robust automation capabilities reduce complexity, enabling asset managers to optimize energy assets swiftly and confidently. As a result, Texture transforms disparate energy resources into cohesive, profitable, and resilient components of the grid, directly increasing their return on investment.
Retail: Making Brick And Mortar As Scalable As Shopify
For years, retail landlords have measured success through occupancy rates, but in today’s market, the true metric is store performance. Rising rents and limited supply often create the illusion of cash-flow stability in retail real estate, but tenant performance, not lease pricing alone, sustains a property’s value. As anticipated store closures and bankruptcies rise, landlords must rethink how retail space is monetized. While traditional long-term leases provide predictability, modern retailers struggle with the long-term liabilities associated with those leases. Consumer demand is notoriously fickle, and many once-dominant brands have struggled under the weight of excessive lease liabilities when consumer interest wanes. This challenge is further compounded by the capital expenditures required to build out new stores, making it difficult for brands to achieve a sustainable return on investment, despite the fact that 85% of retail sales still happen offline.
Leap solves this with a turnkey platform for fully managed retail spaces, allowing brands to launch and scale their brick-and-mortar presence with minimal investment or risk. By handling operations, staffing, and financing, Leap removes many of the barriers that have traditionally made physical expansion costly and inflexible. For landlords, this means steady occupancy with proven retail concepts, reducing reliance on speculative tenants and mitigating the risks associated with those long-term vacancies..
This model shifts retail real estate from a static leasing approach to an active performance-driven strategy, ensuring space is filled by brands positioned to thrive, not just those willing to commit to the longest lease. By aligning landlord incentives with brand performance, Leap helps create a more stable and creditworthy tenant base while supporting emerging brands in establishing their omnichannel footprints. As a result, some of the largest retail landlords are now partnering with Leap to adapt their portfolios to the evolving retail landscape.
Supply Chain: Optimizing Asset Utilization
Trucking is a highly fragmented industry, with 95.5% of carriers operating 10 or fewer trucks and 99.6% operating fewer than 100 power units. This structure puts smaller carriers at a systemic disadvantage: they often earn lower per-mile rates and shoulder disproportionately higher costs for fuel, insurance, and financing. Already razor-thin margins are further strained by rising deadhead miles, driver shortages, and volatile spot markets, leaving many small carriers facing existential risk.
SmartHop addresses these systemic challenges by automating the decision-making process for small and mid-sized fleets, optimizing every aspect of freight selection, booking, and routing. Its AI-powered platform continuously analyzes hundreds of thousands of loads a day, intelligently matching carriers with high-margin freight while minimizing empty miles. By leveraging dynamic pricing and route optimization, SmartHop helps stabilize revenue volatility, often boosting rate-per-mile by 5–15%, while cutting deadhead miles by nearly a third. The result is a dramatic uplift in ROA: more predictable cash flow, higher asset utilization, agility in the face of macro shifts, and a technology backbone that transforms data-driven insights into tangible performance gains.
Investing in “Return on Atoms”
To drive meaningful improvement in these industries, we need to find ways to enhance the performance, adaptability, and resilience of physical assets. Technology is the key to unlocking that value, whether that’s through restoring insurability to at-risk properties, deploying distributed energy resources profitably and responsibly, optimizing retail operations as consumer behaviors change, or maximizing efficiency across the supply chain.
While many investors shy away from “atoms”, I see them as an opportunity. We have been fortunate to engage with some of the world’s largest physical asset owners and operators, and when you take the time to understand their businesses and priorities, technology can become a powerful tool to drive real value.
Over the past decade, the data available on physical assets has exploded. Bits and atoms are converging in ways that go beyond theoretical innovation to create real, measurable impact to their bottom-line. Our goal is to help real asset owners and operators leverage technology to maximize their “return on atoms.”
If you’re a founder redefining how technology integrates with physical assets or an industry leader looking to unlock more value from your real assets, I’d love to connect.
📩 sophia@equal.vc