How does it feel going back to China after so long in the UK?
I have been living happily in the London-centric “global citizenship bubble” for the past 16 years. The UK is very international and BP is very inclusive and diverse. China is, of course, no less global in its outlook but it has a different feel and a very different tempo. For non-Chinese corporates to venture there, it requires adaptation to the local culture. And yes, even though I was born in China, I feel that I now have to adapt or perhaps readapt. I am walking this journey with a BP Ventures hat on.
What is BP Ventures’ approach to China?
BP is known in the energy sector in China and enjoys a good reputation. So it is not as if we have a standing start. Globally, BP Ventures has a reputation for creating strategic value as a corporate VC but we need to demonstrate our value to China. This is true for any corporate VC operating in any part of the world, but it is particularly true in China because the local VCs are so active and it is so difficult for non-Chinese investors to get to the table to see the best deals. One of our first investments was in Nio Capital, a Chinese venture company that shares our focus on mobility and advanced energy transition. This is an important step for us.
What is the rationale for your investment in Nio Capital, and what strategic value do you bring?
Nio Capital’s roots are very interesting. First, there was Nio, a very successful Chinese car company that was backed by leading Chinese VCs. Nio’s founder, William Li, had previously built a successful internet company, which he took to IPO in the US. So he brings a fresh perspective to mobility. And now he has founded a venture firm, Nio Capital, which I believe extends this fresh approach to investing in startups.
I am not saying that the traditional original equipment manufacturers have less to offer. They have plenty to offer, and we hope also to collaborate with them.
Right now there is a good fit for us with Nio Capital. It shares the same focus on the new-energy vehicle ecosystem, including advanced mobility and smart energy. Their management team includes individuals with strong experience and background. We can be an effective partner to them. In addition to capital, we bring knowledge and experience of energy and advanced mobility from around the world. We can also give Chinese businesses a platform to expand outside China.
Are you looking at direct investment opportunities?
Of course. We are filling our pipeline and are working on a number of deals we expect to close soon. Our first investments are likely to be in early-stage companies in the new-energy value chain rather than in completely new ground-breaking technologies. We will also be supporting incubators, so we can get an early view on potential investments.
This year, we sponsored the 2018 China Cleantech competition run by TusStar, one of the best-known networks rooted in Tsinghua University, together with ADB Bank. Besides its financial sponsorship, BP Ventures also brought a new set of exciting startups and Chinese VCs to the launch event. Overall, our venturing in China will be like the approach that BP has taken in other parts of the world, where we have developed relationships with great local venture and incubator partners, and where we make direct investments.
Why is BP ventures now prioritising China?
There is a lot of passion and energy in China and new firms can really turn the impossible into the possible, which I guess is what venturing is all about. Chinese consumers are very receptive to new ideas. Entrepreneurs can quickly test technologies and business models and move forward. And the Chinese government is very supportive of innovation, particularly in our priority areas, low-carbon energy and advanced mobility. In my opinion, China is also the best market to trial new technologies from anywhere in the world. Europe and the US are less open to disruption through rapid adoption and scale-up. Of course, I could be biased.
China tends to divide opinions in the venturing world. Many are still wary. Why is this?
Opinions on China are changing. I heard some VCs describe how easy it is in China for entrepreneurs as it is a lot easier to access money, while others see it as a very difficult environment. The truth is that some VCs came here and did not spend enough time learning and adjusting to the local culture and environment. BP is not going to make this mistake.
What are the long-term plans? You are BP’s first venture appointment in Shanghai. Will there be others?
Yes, we will be growing the team, expanding our footprint in China, especially in Beijing and Shenzhen. We have to. I do not expect to find limitations in China. If we cannot do enough deals it will be because of us, because we are not adaptable, agile and fast enough, or because we cannot make our value proposition relevant in this market.