Over the past 12 months Global Corporate Venturing has tracked 38 deals involving corporate investors from the energy and natural resources sector. The majority of this modest number of deals took place in the US. Unsurprisingly most of the commitments (30) went to emerging enterprises from the energy and industrial sectors.
Geert van de Wouw, managing director of Shell Technology Ventures, the venturing unit of the oil and gas company, told GCV: “We see several trends in energy, which we follow with great interest and are selectively investing in. First, connected cars and customers – the innovation around autonomously driving cars, load and road optimisation as well as sharing and building new customer communities.
“Second, distributed power generation and storage for home owners, commercial and industrial customers, especially new business models around energy management and software, and data-driven energy efficiency services as well as entries into developing countries, particularly Africa and Asia. Third, we see the emerging re-entry of hydrogen opportunities into the VC market, especially electrolysis, compact reforming and hydrogen separation and pressurisation.”
Given the sparse number of deals, it is interesting to put the investments in perspective. Historically, deals by corporate investors peaked in 2014, in both number and total capital raised – 74 reported deals, totalling $949m. However, investments have declined drastically since then – less than half that level of activity was registered in 2015, just 36 deals estimated at $324m. This year there has been a slight rebound – by the end of August, we had already tracked 25 deals totalling an estimated $345m.
The oil and gas area of the energy sector is also worth mentioning, as oil and gas companies have been battered by low oil prices for some time. Shell’s Van de Wouw said: “In oil and gas there is a strong need and interest for technologies and innovations that can drive down costs in exploration, drilling, wells completion, production and processing of oil and gas; non-intrusive pipeline inspection tools allowing us to detect corrosion, fouling and scaling, and novel anti-corrosion and fouling materials such as coatings; propositions that support the digital oilfield – data analytics, robotics, and so on.”
Despite the inevitable impact of low oil prices, Konrad Augistin, head of Eon Strategic Co-Investments, remains optimistic about corporate venturing from and in the sector. “The interest in clean energy and renewables is not driven solely by economic reasons, so while low oil prices are bound to have an impact, there are plenty of areas to invest in, as people are still interested in having a more sustainable future.” See the whole interview.
When taking a closer look at the types of energy enterprises which have raised rounds over the past year, we see that most of the deals were in several interrelated categories – solar energy, energy storage and management, and grid and power supply enterprises. The great untapped potential of solar energy and the possibility to power the planet appears to be well on the radar of corporate investors. Along with it comes the issue of energy storage and efficient new power grids, so it is no surprise that those categories have also drawn considerable investments.
Deals
The top investors from the sector were France-based petroleum supplier Total, energy utility Eon, and oil companies Chevron and Saudi Aramco – with 9, 7, 5 and 5 deals respectively. Eon and Total were also the top corporate investors, involved in the largest reported and disclosed rounds, along with Constellation Energy, a subsidiary of energy company Exelon.
The top 10 deals corporate VC investors from the energy sectors committed featured energy software and analytics enterprises in addition to solar, storage and power grid technologies.
ChargePoint, a US-based operator of a vast network of electric vehicle charging stations, raised $50m from investors including Constellation Energy. The round was led by energy-focused late-stage investment firm Linse Capital and also featured venture capital firm Braemar Energy Ventures. Constellation’s participation comes in the wake of a strategic partnership it formed with ChargePoint in September 2015.
US-based internet of things (IoT) platform provider Greenwave Systems raised $45m in a two-tranche series C round. It featured Eon, the Singaporean government’s Economic Development Board, Singapore Technologies Telemedia, a subsidiary of Temasek, and venture capital firm Westly Group. Founded in 2008, Greenwave produces software to manage entire ecosystems of IoT devices.
US-based energy storage and management technology provider Sunverge Energy raised $36.5m in a series C round featuring Siemens Venture Capital and Total Energy Ventures. The corporate venturing arms of Siemens and Total were joined by power provider AGL Energy, venture capital firm SoftBank China VC and the Australian Renewable Energy Agency. Founded in 2009, Sunverge produces intelligent energy storage systems that enable utilities to deploy demand response initiatives.
Renmatix, a US-based biochemical technology provider backed by petroleum company Total, chemicals producer BASF and waste services provider Waste Management, raised $31.2m in new funding, according to a regulatory filing. Founded in 2007, Renmatix’s Plantrose technology converts biomass such as wood waste and agricultural residue into cellulosic sugar for use as an alternative to petroleum in biochemicals and biofuels.
Saudi Aramco Energy Ventures, the strategic investment arm of oil and gas company Saudi Aramco, led a $26m series B round for US-based big data analytics technology developer Maana. The round included Shell Technology Ventures, Chevron Technology Ventures, GE Ventures and Intel Capital as well as venture capital firm Frost Data Capital. Maana’s Emergent Semantic Graph is an advanced analytics platform that helps businesses optimise their assets by collecting information on operations and business processes.
Germany-based digital heating installation service Thermondo secured €23.5m ($26m) in a series C round from existing shareholders. The round included Eon, Holtzbrinck Ventures, the VC firm spun out of publishing company Georg von Holtzbrinck, Global Founders Capital, Rocket Internet, financial services firm IBB Berlin and Picus Capital. Founded in 2012, Thermondo’s platform connects heating equipment makers and wholesalers with consumers.
Powerhive, a US-based company building microgrids in developing nations, raised $20m in a series A round featuring corporate venturing vehicles Total Energy Ventures and Caterpillar Ventures, venture capital firm Prelude Ventures, Tao Capital Partners, Pi Investments and undisclosed private investors. Founded in 2011, Powerhive builds microgrid systems for developing nations in Africa and the Asia-Pacific region.
US-based solar and energy efficiency services provider PosiGen raised $20m from investors including Constellation Technology Ventures, the corporate venturing subsidiary of energy company Exelon. Constellation was joined in the round by private equity firm NewWorld Capital Group. Founded in 2011, PosiGen offers residential solar and energy efficiency installations that can be purchased or leased by low-to-medium income households.
Eon Venture Partners, the corporate venturing arm of the energy utility, was among the investors in a $20m round closed by US-based energy management technology developer AutoGrid Systems. AutoGrid provides software that enables utilities, electricity retailers, renewable energy power providers and energy service providers to manage the resources of a distributed grid to supply cleaner and more cost-effective energy.
US-based industrial collaboration technology developer Parsable secured $20m in a round led by petroleum company Saudi Aramco Energy Ventures. The investor consortium also featured aerospace firm Airbus and oil and gas technology provider Schlumberger. Parsable provides technology that enables companies to replace paper-based workflow with digital collaboration technology designed for the oil and gas, construction and manufacturing industries.
The number of deals in emerging energy and cleantech enterprises over the past year was not large – 45 in total. The majority of top investors were either corporate VCs from the energy sector or from closely related industrial fields, such as General Electric, 3M, oilfield equipment provider Schlumberger, General Motors and Siemens.
Enerkem, a Canada-based biofuel producer backed by waste services provider Waste Management, raised C$152.6m ($115m) in debt and equity financing, with the equity coming from existing investors. Founded in 2000, Enerkem converts waste into biofuel and renewable chemicals.
US-based energy storage technology provider Younicos obtained a $50m growth equity investment from solar power producer First Solar, private equity firm Grupo Ecos and an unnamed strategic lead investor in September last year. Founded in Germany in 2005, Younicos produces grid-scale batteries used to store energy generated by solar plants and wind farms.
US-based home solar system installer Sungevity raised $50m in equity funding from investors including GE Ventures, industrial product maker General Electric’s corporate venturing unit. Investment firm Apollo Investment Corporation and speciality finance provider Hercules Technology Growth Capital also contributed. Sungevity provides solar power systems to homeowners across various US states, the Netherlands, Germany and the UK.
Presidio Ventures, an investment arm of conglomerate Sumitomo, participated in a $30m series C round for US-based battery technology developer Enevate. The round was co-led by Tsing Capital, Mission Ventures and Infinite Potential Technologies. Enevate is developing rechargeable lithium-ion batteries aimed at mobile devices that extend energy density by up to 50% compared with current technology.
China-based electrical transmission equipment maker Pearl Electric closed a RMB200m ($30m) series C round with backing from power producer China General Nuclear Power Group, as reported by China Money Network. The round included contributions from an investment subsidiary of Hongta Tobacco Group and undisclosed additional investors. Founded in 1958, Pearl Electric supplies power transformation and transmission equipment.
US-based waste-heat-to-power technology developer Alphabet Energy completed a $23.5m series C round led by Schlumberger. GM Ventures, the corporate venturing subsidiary of carmaker General Motors, also took part in the round, as did Osceola Capital Management, TPG, Claremont Creek Ventures and California Clean Energy Angel Fund. Alphabet Energy uses nanotechnology-equipped thermoelectric material to convert exhaust waste heat to electricity.
Only one notable exit took place over the past year. Panoramic Power, a US-based energy efficiency technology producer backed by wireless technology company Qualcomm and design software developer Autodesk, was acquired by utility Direct Energy for $60m. Founded in 2009, Panoramic Power develops wireless sensors and cloud-based analytics software to help companies gain insights into their energy use and reduce costs.
Funds and other initiatives
Over the past year, we tracked 19 funding initiatives targeting emerging enterprises from the energy and cleantech sectors, including VC funds, incubators and a new venturing units.
Norway-based energy company Statoil launched corporate venturing unit Statoil Energy Ventures in February. The unit is to invest $200m over the next four to seven years in renewable energy and low-carbon technology, with areas set to include offshore and onshore wind, solar energy, energy storage, low-carbon transportation, energy efficiency and smart grid technology. The unit will also consider making investments in funds. Managing director Gareth Burns said it would seek to build a portfolio of 15 to 25 companies.
Applied Ventures, the corporate venturing subsidiary of semiconductor technology provider Applied Materials, is opening an office in Singapore to identify opportunities across the region. The unit is to invest up to $50m a year, in sectors such as genomics, robotics, energy storage, IoT and 3D printing.
Denmark-based biotechnology developer Novozymes formed not-for-profit incubator Diva, which will invest alongside large corporations, as reported by the Guardian. The incubator was formed with World Business Council for Sustainable Development and pro bono assistance from legal firm Pillsbury Law. Diva will co-invest in impact ventures with corporates while also utilising philanthropic and concessional capital to reduce the risk for its commercial partners.
Canada-based alternative asset management firm Kensington Capital Partners revealed a C$306m ($228m) final close of its corporate-backed fund of funds following commitments from wealth managers, private foundations and private individuals. Kensington Venture Fund’s limited partners include media company Torstar Corporation, which supported a second close of C$193m in June 2015, and enterprise software developer OpenText, which contributed to a first close of C$160m in 2014.
Robert Bosch Venture Capital (RBVC), the strategic investment arm of the Germany-based industrial product and appliance manufacturer, established its third fund, committing €150m. RBVC now has about $480m of assets under management. Ingo Ramesohl, managing director of RBVC, said: “The new fund will continue focusing on disruptive startups in the areas of automation and electrification, energy efficiency, enabling technologies and healthcare systems.”
Netherlands-based venture capital firm Set Ventures raised €60m for its Set Fund II, securing commitments from energy utilities Essent and Delta, and petroleum supplier Shell, which invested through Shell Technology Ventures. Other investors included family office Korys, the European Investment Fund, Finnish state-backed fund Sitra and Brabant Development Agency, which represents the Dutch province of Brabant.
Shell Technology Ventures also provided an undisclosed amount to GRC SinoGreen Fund III, a China-based fund investing in companies that develop energy and resource efficiency, cleaner transportation, sustainability and climate change mitigation technologies. Earlier it was announced that the venturing unit of Germany-based chemical producer Evonik had also invested an undisclosed amount in the fund.
Canada-based energy companies Cenovus Energy and Suncor Energy committed up to $100m to Evok Innovations, a fund that will support developers of innovative oil and gas technology. Cenovus and Suncor will each provide up to $50m for the fund over the next 10 years, investing in early-stage companies working on technology to improve the scale, diversity and quality of innovation in the oil and gas industry.
Germany-based energy utility RWE announced plans to establish a corporate venturing fund of up to €130m as part of a company-wide innovation drive, according to RWE chief executive Peter Terium, who announced the plans following a visit to the company’s Silicon Valley-based RWE New Ventures unit.
Germany’s Federal Ministry for Economic Affairs and Energy launched fundraising efforts for High-Tech Gründerfonds (HTGF) III with a target size of €300m. HTGF is a public-private seed-stage venture capital fund of which the ministry is its cornerstone investor. It was established in 2005 and focuses on domestic startups less than a year old.
People
Inga Mueller became an investment manager at EnBW New Ventures, the corporate venturing arm of Germany-based energy utility Energie Baden-Württemberg. Mueller joins from I Am Consulting, where she had been an interim manager since December 2015.
In June, Sigrun Daireaux left her position of investment manager at Statoil, where she had worked since 2004.
In the same month, Michael Lübbehusen joined the board of Innogy Venture Capital, the venturing unit of RWE. He will co-head the fund with Frank Starrmann.
Issam Dairanieh left corporate venturing unit BP Ventures in April to be CEO of carbon capture research and development organisation Global CO2 Initiative. Dairanieh joined oil and gas company BP in 1998 and had been managing director of BP Ventures since 2011.
Julia Rebholz, founder and head of Ignite, the UK’s first energy-based corporate impact investment fund, left to join a consultancy encouraging other companies to set up similar funds. Rebholz joined Corporate Impact-X to work with its founder, Charmian Love. The move follows Ignite’s first exit in mid-2015, two years after it was set up in 2013.
In January, Edouard Bulteau was promoted to investment manager at Total Energy Ventures, the strategic investment arm of Total. Bulteau joined Total in 2012 as a cleantech analyst focusing on biofuels, biochemicals, water solutions and energy storage technology.
In March, George Coyle, manager of technology venture investments at oil and gas company Conoco-Phillips for over five years, left the firm to form Energy Innovation Capital. A regulatory filing indicates he has raised $42.8m.
In October last year, Coyle’s colleague Chad Gardner also left as a director at ConocoPhillips to become vice-president of finance at Modumetal, a maker of nanolaminated alloys. Gardner had headed technology venture investment at ConocoPhillips since 2011.
Khalil Alnammari left his position of investment associate at Saudi Aramco Energy Ventures in February this year to take a consultant position at Saudi Arabia’s Ministry of Economy and Planning. Alnammari had worked at Saudi Aramco since 2013.
Fabien Mondini left Sabic Ventures, the corporate venturing arm of Saudi Arabia-based chemical and materials manufacturer Sabic, where he was a senior investment manager. Sabic Ventures was founded in the Netherlands to invest in areas as advanced materials, alternative energy and feedstocks, energy efficiency, providing funding at series B stage or later.
Alexander Rozenfeld, former president of Shell Technology Ventures, formed his own venture capital firm, Climate Impact Capital, which plans to make between six and eight investments over its first two years of operation, targeting early-stage companies developing disruptive technology mitigating climate change. Rozenfeld aims to raise $30m for the first fund.
Interview: Konrad Augustin, Eon Strategic Co-Investments
Kaloyan Andonov spoke with Konrad Augustin, head of US scouting and co-investments at Eon Innovation/Strategic Co-Investments (SCI)
What is Eon SCI’s overall investment thesis?
In brief, Eon Strategic Co-Investments is looking to invest in companies that help Eon strive in its three main activity fields – customer solutions, renewables and energy networks
How do some of your recent investments fit into Eon SCI’s overall strategy?
The most recent investment in Greensmith Energy Storage addresses the growing market for energy storage solutions and also leverages the existing renewables business – the solar and storage field.
How has SCI’s investment strategy evolved over time?
At the very beginning we used be more focused, as other cleantech investors, on hardware. However, we quickly moved towards software solutions and customer-oriented products and business models.
What is Eon SCI’s ideal investment case? What is it that you look for in a startup?
The ideal investment case is where we bring into Eon a technology and business model that our business needs, and that we manage to create a close commercial collaboration to scale that solution in our markets where both sides benefit.
What is your focus in terms of stage of development in portfolio companies?
SCI invests in series A onwards, although there are certain exceptions – the portfolio company needs to have a product or solution that is deployable or usable in a pilot. Strategic fit is a must, of course.
You have team members in both Germany and the US. What is the geographical focus and orientation of your investments?
It is important to have the team in Europe, as 70% of our focus is on bringing those technologies to Eon – hence, we need to be very close geographically to the business. However, we recognise that the US, and Silicon Valley in particular, is a great innovation hub and place to source startups. That is why we are growing our team there as well.
And how does Eon SCI align in practice with other corporate divisions specialising in innovation?
Eon SCI is part of Eon Innovation and as such is continuously in touch with every other division specialising in innovation in any way. Beyond that, we are also intensively liaising with global and regional units that are driving Eon’s business forward. This ongoing exchange allows for quick testing of new ideas and taking into consideration their particular needs in our scouting process.
What do you believe are the most exciting new technologies being developed?
We believe that energy storage will be transformational for renewable energy generation as a whole and distributed generation. Software solutions will also have a tremendous impact on the development of distributed energy resources, microgrids and grid edge solutions. Applying internet-of-things, artificial intelligence or virtual reality technology can create entirely new products and experiences for end-consumers in the energy sector. There is also a large potential for new customer solutions by transferring technologies from e-commerce, mobile or omnichannel services which are already state of the art in other industries, when compared with the energy space.
Solar energy could be a major source of energy. How far away do you believe we are from that point? What is your take on it as a corporate venturer?
We believe the potential is immense. However, our role is not to be a manufacturer of solar panels but to find solutions and business models to help the deployment and commercialisation of photovoltaics on rooftops and ground-mounted plants, and then to integrate these systems into the overall energy system.
There are developments in the automobile industry disrupting the transportation sector and how we consume energy for transport purposes. What are the challenges and opportunities you see?
We believe the impact of electric vehicles on the energy business will be profound over the next few years, not only from the system point of view in coping with the changing demand patterns but also with respect to the new technologies and business models needed to deliver the infrastructure and services around electric vehicles – all of this presents a great opportunity for Eon to grow new business and to develop a new channel of engagement with our customers.
What has been the impact of low oil prices on energy startups and innovation over the past two years? What do you think is going to be the impact on corporate venturing investors, their strategies and their funding in the short and long term?
Low oil prices have had an impact on energy startups without a doubt, especially those whose business model was based on cost savings. Those that aim at different angles – for example, customer engagement or predictive maintenance – are less affected by the ups and downs of crude oil prices. However, energy startups are running on a different timescale in general, which is not working for a lot of VC investors. Corporate VCs can fill that funding gap and help energy startups both as investors and customers. In addition to this, the interest in clean energy and renewables is not driven solely by economic reasons, so while low oil prices are bound to have an impact, there are plenty of areas to invest in, as people are still interested in having a more sustainable future.
What kind of investments should we expect to see from Eon SCI in the near future?
We will continue to look for scalable businesses that can have a strategic impact on Eon while helping startups grow.
Case study: Heliatek shines with recent round
James Mawson, editor-in-chief
There are few markets as large as the construction and energy markets, so finding a disruptive technology to impact both offers an opportunity for an entrepreneur – however, a slice of luck also goes a long way in helping.
Thibaud Le Séguillon, CEO of Germany-based Heliatek, said his company had experienced such luck when the right floorspace became available just as the company was raising an €80m ($90m) round last month – the new 1 million square metre factory will be able to produce the wider Heliafilm that can be applied to windows, where it will generate electricity from sunlight. He said: “Better luck than good.”
The new plant is about 50 metres behind the pilot so this should make it easier to scale up, and Le Séguillon was confident Heliatek would be cashflow positive and profitable in the next 18 to 24 months.
Heliatek has already spent a decade proving its technology since spinning out of Technical University of Dresden and University of Ulm in 2006 – for which it won a Global Corporate Venturing award in January – so this milestone is cause for celebration, especially as Germany’s cleantech industry has been affected by changing fortunes in the solar industry and acquisition of former stars, such as Q Cells, by state-supported China-based peers.
Jan Michael Hess, founder of EcoSummit, called Heliatek’s D round “a very big achievement” as “capital-intensive smart green startups in Europe aiming at building their own hardware factories have a hard time fundraising”.
He said: “Financially motivated VCs require capital efficiency and prefer hardware startups that outsource manufacturing and the necessary capital expenditure. Financing new photovoltaics (PV) factories in Europe is even more difficult due to China’s hegemony. It turns out it can only be done if you develop the next generation of PV technology, continuously improve efficiency and work diligently on building a co-investor syndicate of family offices, corporates and governments.
“Keep in mind that it was the Chinese government that backed a myriad of Chinese manufacturers to hijack the global PV industry. After a very long fundraising journey, 10-year-old organic photovoltaics (OPV) pioneer Heliatek finally found the capital to build its second solar factory in Dresden, Germany’s epicentre of photonics and organic semiconductors.”
CEO at Heliatek for the past five years, Le Séguillon said his advice to others looking to follow in its footsteps from spinout to scale-up was to find an area that could be defended – what investor Warren Buffett calls a moat. Le Séguillon said: “Every situation is unique but you need clear differentiators that can be defended and the right team, which makes a huge difference. A project might have the technology and market but without the team it will fail.”
And the right investors, he added. Advised by Rosthchild, Le Séguillon said the company had now raised $140m in total, with Germany-based utility Innogy as its largest shareholder with 20%, and France-based peer Engie joining the latest round as a new investor.
He added: “Engie and Innogy are typical European utilities and have made a 90-degree turn in strategy, and Heliatek falls right into their path of decarbonised and distributed electricity production.
“It has been a long story of new technology, manufacturing process and markets that requires extremely patient investors. VCs with 10-year-life funds would have caused all kinds of stress on top of finding the money, whereas corporations and others, such as High-Tech Gründerfonds (HTGF), have been with us every step of the way.”
Benjamin Erhart, investment director at HTGF, said: “Having supported Heliatek as one of its first investors since 2006, we are proud to see what Heliatek’s team has achieved in the last 10 years.”
Lucille Bonnet, his investment management colleague at HTGF, added: “With the first-of-its-kind industrial OPV production plant, Heliatek will shape the future of building integrated PV and will open up a new range of possibilities for tomorrow’s cities.”
That market could be large, given the construction industry, currently a $9.5 trillion market, is expected to nearly double by 2030, according to the Global Construction 2030 Report by Global Construction Perspectives and Oxford Economics.
And energy expert Ramez Naam, in his latest blog post, noted the financial advantage in solar.
Naam said: “The latest record is an incredibly low bid of 2.42 [US] cents per kilowatt hour (kWh) solar electricity in Abu Dhabi. That is an unsubsidised price. Let me put that in perspective. The cost of electricity from a new natural gas powerplant in the US is now estimated at 5.6 cents per kWh. That is with historically low natural gas prices in the US, which are far lower than the price of natural gas in the rest of the world.”
Low energy prices might help industrial users but the processes developed can benefit businesses in other ways. However, they require time and capital. Claus Hackmann, partner at BASF Venture Capital, another of Heliatek’s investors that led the B round, said this collaborative syndicate had helped by stepping and leading at different stages.
Peter Terium, CEO of Innogy, which led this D round, said: “I am really pleased that Heliatek is a true success story. We have continually invested in Heliatek since 2009. Thanks to our early engagement, we have the opportunity to participate in creating the market for one of the most exciting innovations in the area of renewable energies.”
Other investors in the round were French bank BNP Paribas and CEE Group, an investment company of Lampe Equity Management specialising in renewable energy, BMW owner Stefan Quandt’s Aqton family office, ECapital, Tudag and Wellington Partners.
The round had €42m in equity from these investors, €20m in debt and about €18m in subsidies through the newly developed Key Enabling Technologies Pilot Lines project technology and innovation funding grant scheme offered by the German state of Saxony and financed by the European Regional Development Fund.
The European Investment Bank (EIB), under the InnovFin–EU Finance for Innovators program, granted the loan to Heliatek. Ambroise Fayolle, EIB vice-president responsible for the bank’s business in Germany, said: “The EIB is committed to support innovation in Europe. Loans to innovative midcaps like Heliatek are key to drive Europe’s knowledge economy.”
Le Séguillon explained why it had leveraged the equity. “Debt is non-dilutive and debt markets are extremely attractive, not far from negative yields. The EIB lends at market conditions to support innovation. We are one of the first startups to enjoy this facility.”
“When I look at the façade of a glass office building, I see an area that is totally passive,” Le Séguillon said for the company’s profile on winning the GCV award in January. “What our technology does is activate these buildings to generate electricity.”
He might well have added that, with luck, its achievement casts a positive light on university tech transfer and cleantech, two parts of the investment market that had been negatively received in recent years.
Profile: Energy Innovation Capital goes against the flow
James Mawson, editor-in-chief
Oil prices might have risen in the past two months but, at less than half their peak two years ago, setting up an energy-focused venture capital firm could be a challenging proposition even for a group of former corporate venturers.
Instead, with six deals Energy Innovation Capital (EIC) has been one of the most active investors in the energy sector this year after its cornerstone backing for its first fund by WestRiver Group, an investment vehicle backed in turn by hedge funds Two Sigma Investments and Tudor Investment, and George Kaiser Family Foundation. A regulatory filing indicates EIC has so far raised $42.8m, although the firm declined to comment on fundraising.
Five of the deals are public – Biota, which applies DNA sequencing and data science to explore the earth’s subsurface for oil, ConXtech, a prefabricated structural steel building system, Comitt Well Solutions, a technology company to refresh existing well holes, Flowcastings, which helps design turbine castings, and Fracture ID, which helps improve fracking.
George Coyle, one of the founders of EIC and former head of technology venture investments for oil and gas company ConocoPhillips for more than five years, said: “It is the most advantageous time to invest in modern oil and gas, such as next-generation fracking, as the oil price is not going to move, which catalyses interest in some and the feotal position in others.
“Themes we invest in are reduction in cost, getting more from less, unconventional fracking technology, such as natural gas to reduce CO2 compared to coal and in which North America is at the leading edge, data, robotics and industrial biotech, in which the team with its deep energy and Silicon Valley roots really understands, water stress, natural gas, deep sea and heavy oil, and sustainable and environmental safety issues that are ripe for innovation.
“Renewables are not going to hit the scale required in the next 20 to 25 years through population growth and industrialisation and electricity needs.
“It is very liberating to be at EIC as it has the best of synergies of corporate venturing but with freedom to operate and move and press the accelerator in an investment.”
His colleagues at EIC include two other managing partners, Jeffrey Clark, former CEO of Veracity Innovation, a joint venture with the Gas Technology Institute commercialising natural gas-related technologies, and Kevin Skillern, who previously led General Electric’s program investing in emerging technology companies in the energy industry from 2005 to 2013 and led a joint $300m fund with ConocoPhillips and NRG Energy.
This $300m fund, Energy Technology Ventures, was where Coyle and Skillern “learned the hard way that tech must meet the needs of customers, but we as a team are experienced and work together”, Coyle said.
Coyle’s other team members are Paul Dickerson, a former chief operating officer for the US Department of Energy’s Office of Energy Efficiency and Renewable Energy, as managing director at EIC, and Benjamin Stanzl, principal. EIC also has two operating partners, Vikki Dunn and John Hanten, a retired executive from Chevron Tech.
