The GCV Symposium 2019 opened this morning at London County Hall with an introduction by Mawsonia’s chief operating officer Tim Lafferty welcoming more than 400 delegates from across the world, noting that 2018 saw nearly $180bn invested across 2,799 deals involving corporate venture capital funds.
James Mawson, founder and editor-in-chief of Mawsonia, then welcomed Jacqueline LeSage Krause, managing director of reinsurance firm Munich Re’s corporate venturing division, Munich Re/HSB Ventures, and David Gilmour, vice-president of business development for oil and gas supplier BP, to the stage.
LeSage Krause and Gilmour, co-chairs for this year’s symposium, took on the theme of the conference, “Navigating Through Turbulence,” with Gilmour noting that BP had “a dual challenge” that consisted of taking 1 billion people out of energy poverty by 2050 to 2060 while adhering to the Paris Agreement governing climate change mitigation.
There was a “huge opportunity to make a global impact,” Gilmour said, and corporate venturing is high on BP’s radar as it navigates the cleantech challenge. This was not new, but BP had adopted a more considered approach after betting big on solar in the 1990s and taking a hit because they were too early.
BP Ventures invests approximately $200m per year according to Gilmour, and one of its portfolio companies, waste-to-fuel technology developer Fulcrum BioEnergy, feeds into the increasing demand for biofuel, particularly for aviation.
LeSage Krause said that “risk is everywhere in this world” alongside positive and negative challenges. Munich Re’s balance sheet existed to handle major catastrophes, pandemics and other disasters, and those risks are increasing with climate change.
The unit’s focus is very wide, extending from cybersecurity and clean energy to space technology, LeSage Krause added. It operates three distinct funds, each of which are focused on a particular theme.
Mawson observed that “the ability to touch not just one industry but, through reinsurance, touch every sector is really interesting,” and asked what would become the important aspects of corporate venturing over the next decade.
LeSage Krause replied that she had seen a real professionalisation of corporate venture capital, and called on venturers to sit down with corporate leaders to understand the innovation agenda and build an investment platform that was “custom for the corporate while leveraging best practice”.
Gilmour agreed, emphasising that the CVC unit needed to demonstrate its impact to C-suite leadership, and that without sustainability, venturing will become a vanity exercise. A particular challenge is that funds have a 10-year lifespan but corporate strategy tended to shift every five years, so there has to be a plan for managing the inevitable orphan companies.
If you cannot demonstrate value, Gilmour declared, you are at risk. While BP Ventures does not lack money, it has to ensure investments are “very wise,” with an awareness of what would likely happen over the next five to 10 years, even if the reality ends up being different.
LeSage Krause concluded that “there are fundamental changes going on in our environment,” and the challenge was to understand how those risks were developing, how the good parts could be supported and the bad elements mitigated.
Munich Re was therefore also increasingly focused on the opportunities to tap into underserved markets in Africa and Latin America, while pursuing opportunities of massive scale in markets such as India.
