The world is repricing.
AI is accelerating change across every sector. It is also commoditising the asset class venture capital was built for. The categories that drove the last decade's extraordinary returns, software, application-layer technology, platform plays, are facing structural headwinds as foundation-model capability expands and intelligence itself becomes a commodity input. The same companies that produced 156 percent of S&P 500 returns between 2023 and 2024 are now down 4.9 percent in 2026, while capital is rotating toward energy (up 23 percent), materials (up 18 percent), and industrials (up 14 percent). The rotation is structural, not cyclical.
At the same time, the systems the world actually depends on are underfunded, fragmented, and breaking down. Food. Energy. Health. Water. Waste. The infrastructure of life itself, the systems that keep eight billion people alive, has been starved of investment by a generation of capital that preferred software margins to physical reality.
That is where value is moving. That is where MAD invests.
The world is not short of opportunity. It is short of alignment.
From MAD: What the World Needs Now Is a Little Madness, Mark Falzon, 2025
The three-part thesis
MAD invests across three categories. Together they form the architecture of where capital is rotating to and where the platform is positioned to back it.
Restoration: repairing damaged systems
Decades of extraction have left the systems life depends on in measurable disrepair. Soil carbon stocks have collapsed across most agricultural land. Water systems leak, contaminate, and run dry. Waste accumulates faster than the planet processes it. Coastal ecosystems, forests, and watersheds are stressed past the threshold of natural recovery.
Restoration is the work of repairing those systems. It is also the work of building the businesses that do that repairing. Soil regeneration ventures using new biological inputs. Waste conversion businesses turning what is currently landfill into circular feedstock. Water systems that capture, clean, and redistribute at industrial scale. Coastal and ecological restoration that operates as enterprise, not as charity.
These are not philanthropic exercises. They are companies with paying customers, recurring revenue, and competitive economics. The customers exist because the regulatory framework has shifted (water utilities required to meet new standards, councils required to divert waste from landfill, agricultural buyers requiring traceable regenerative inputs). The revenue is recurring because the underlying demand is structural rather than cyclical. The competitive economics are emerging because the technology has crossed the threshold where doing things the regenerative way is now cheaper than doing them the extractive way.
Restoration is where capital is moving because Restoration is where margin is forming.
Transition: upgrading existing systems to more efficient models
Most of the world's critical infrastructure was designed for an economy that no longer exists. Energy grids built around centralised fossil generation. Supply chains built around just-in-time logistics that fail at the first geopolitical shock. Manufacturing systems built around cheap labour and cheap freight in a world that has neither. Health systems built for episodic care in a population that increasingly needs continuous management.
Transition is the work of upgrading those systems. Distributed energy infrastructure that turns rooftops into power stations and homes into participants in the grid. Supply chains rebuilt around resilience rather than only around cost. Manufacturing reshored, automated, and electrified. Health systems redesigned around continuous data and remote monitoring.
The companies doing this work share a profile. They sit on top of existing infrastructure rather than replacing it from scratch. They generate recurring revenue from operating the upgraded layer. They benefit from regulatory tailwinds that price-in the externalities the old infrastructure ignored. They are capital-intensive at the deployment stage and capital-efficient at scale. They look like industrial businesses with technology multipliers, because that is what they are.
Transition is the largest of the three categories by capital required. It is also the most directly investable, because the customers exist, the contracts are signed, and the unit economics work today.
Transformation: new ways of producing what the world needs
The third category is the one that is hardest to see and easiest to underestimate. Transformation is the work of producing what the world needs in fundamentally new ways. Not optimising existing systems but replacing them with systems that did not exist a decade ago.
Precision fermentation that produces proteins, fats, and complex molecules without animal agriculture. New materials, structural, electronic, biological, that do at room temperature what previous materials did only at industrial extremes. Clinical breakthroughs that move from one-size-fits-all pharmacology to precision interventions targeted at individual biology. Manufacturing techniques that print buildings, vehicles, and components from raw inputs without the supply chains the old systems required.
These are the companies that will define the next twenty years. They are also the companies that traditional venture capital has struggled to fund well, because they do not behave like software businesses. They have physical capital requirements. They have regulatory pathways that take years rather than months. They scale through manufacturing rather than through user acquisition. They look more like biotech, cleantech, or industrial technology than like the SaaS companies the venture model was optimised for.
Transformation is where the asymmetric outcomes will sit. It is also where the architecture of capital matters most.
What these three have in common
Restoration, Transition, and Transformation are not arbitrary categories. They are three views of the same underlying shift.
Each backs companies that solve real problems for paying customers. Each operates at the intersection of physical reality and intelligent systems. Each is positioned in sectors where structural demand is growing rather than where speculative narratives are being constructed. Each rewards capital efficiency, recurring revenue, operational maturity, and alignment with planetary and community boundaries. Each is enhanced by AI and robotics rather than replaced by them.
And each requires a kind of capital that the standard venture model is not built to supply. Capital that is patient enough to ride the longer development curves of physical and biological systems. Structured enough to generate income during the life of the deployment rather than only at exit. Aligned enough to keep founders building at sustainable pace rather than chasing the next round. Catalytic enough, where appropriate, to absorb the first-loss risk that brings larger pools of senior capital into the structure.
That is the kind of capital MAD is built to supply.
Designed around transformation, not speculation. Momentum based, not fantasy based. Resilience based, not volatility based. Regenerative, not extractive.
From MAD: What the World Needs Now Is a Little Madness, Mark Falzon, 2025, Chapter 8
Why now
The case for this thesis is partly cyclical and partly structural.
Cyclically, capital is rotating. The categories that drove the last decade are repricing. Allocators are looking for places to redeploy. Real-economy categories with credible cash flows and structural tailwinds are now competing successfully for institutional capital that previously went to speculative growth.
Structurally, the underlying drivers are not going away. Climate stress is increasing demand for restoration. Energy transition is reshaping every grid on earth. Demographic shifts are reshaping health and food systems. AI is reorganising labour, productivity, and value across the economy in ways that make the underlying physical systems more important, not less. The companies that solve these problems will operate for decades, not for one fund cycle.
And philosophically, there is a reckoning underway. The capital architecture that produced extraordinary outcomes for some over the last forty years also produced the systemic fragility we are now living through. A growing share of investors, family offices, and institutions are looking for capital instruments that align with the world they want to leave behind, not just with the returns they want to extract before doing so.
Restoration, Transition, and Transformation is the answer to that question, expressed as a deployment thesis.
What it looks like in practice
The companies the platform evaluates against this thesis share a common profile. Post-revenue with proven business models. Australian-headquartered with global ambitions, consistent with ESVCLP requirements. Sectors aligned to food security, environmental resilience as primary, with health and education as secondary. Sustainable recurring or subscription revenue. Founders with industry expertise and prior high-growth track record. Credible exit pathway within the fund's term. Applying new science, engineering, or processes to a system the world depends on. Enhanced by AI and robotics, not replaced by them.
What they look like, concretely: companies running distributed renewable assets at scale. Companies converting industrial waste streams into commodity feedstock. Companies producing food and materials through fermentation rather than through extraction. Companies operating sensor networks across agriculture, logistics, or health that deliver continuous data instead of episodic measurement. Companies that build, operate, and improve real-world systems and use AI as the layer that makes them more effective.
They are not the companies that dominated venture portfolios in the last decade. They are the companies that will dominate the next.
A closing note on alignment
The deepest reason for this thesis is also the simplest. The world is short of alignment between what capital chases and what humanity needs. The systems that sustain life are starving for investment while speculative categories absorb capital they do not productively use. Mark Falzon's MAD book frames it directly: capital is not neutral. Every civilisation expresses itself through the way it allocates resources. The capital architecture of the last forty years expressed one set of priorities. The next architecture will express another.
Restoration, Transition, and Transformation is what alignment looks like as a deployment thesis. It is the answer to a question allocators are increasingly asking, and the systems the world depends on are increasingly demanding.
Read more about the architecture in the MAD book in our Books library. Wholesale-qualified investors interested in the Information Memorandum for MAD Fund 1 are welcome to enter the Investor Room.
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