New York-listed industrial conglomerate GE has agreed to fund half of a $200m corporate venturing fund and launch an open innovation competition for companies seeking to improve the electric grid.
The fund is the third in a series GE has rolled out across media, healthcare and clean technology in recent years, although the bulk of its corporate venturing activities have been part of its GE Capital, Equity division.
The fund and competition are called the GE ecomagination Challenge: Powering the Grid and the conglomerate is working alongside four venture capital firms and Chris Anderson, editor-in-chief of Wired magazine, to run the challenge.
The VCs are Switzerland-based Emerald Technology Ventures, and three in the US: Foundation Capital, Kleiner Perkins Caufield & Byers and RockPort Capital. One corporate venturer that is a limited partner (LP) in Emerald’s second fund said: "Of all VC funds around Europe, Emerald is probably the one with the most active interactions with a broad range of corporates. The nature of the relationships between Emerald and the corporates can be as LPs, providers of deal flow, co-investors, advisors, portfolio company customers or collaborators."
Jeff Immelt, executive chairman of GE, said: "Innovation is the engine of the global effort to transform the way we create, connect and use power. We want to work with our partners to make sure we have a comprehensive digital energy offering. This challenge is about collaboration and we are inviting others to help accelerate progress in creating a cleaner, more efficient and economically viable grid. We want to jump-start new ideas and deploy them on a scale that will modernize the electrical grid around the world."
The fund and competition has been launched five years after GE started its ecomagination strategy. Since 2005, the conglomerate has brought more than 90 ecomagination-approved products to market with revenues reaching $18bn last year and invested $5bn in research and development. The company will invest $10bn in R&D over five years and double operational energy efficiency while reducing greenhouse gas emissions and water consumption, it said.
Proposals for the new fund and competition are sought in three categories: renewable energy, grid, and ecological homes and buildings.
GE said winners of its competition would potentially gain investment from the fund, validation and development of their business strategy and products from GE’s technical and commercial teams as well as its technical infrastructure and research centres, distribution from GE’s global network and the use of GE as a customer for products.
Over the course of 10 weeks, entrants will be able to submit their ideas via www.ecomagination.com. Entries will be evaluated as candidates for both a potential future commercial relationship and a $100,000 innovation challenge award acknowledging their entry as an example of outstanding entrepreneurship and innovation.