GCV Energy 2019 was GCV’s third annual conference, hosted in the energy capital of the world – Houston, Texas. The event featured discussions by corporate investors and industry leaders plus pitches from innovative businesses from the sector and adjacent spaces like mobility, advanced manufacturing and digital technology.
Day 1: startup pitches
Startups selected by software provider and sponsor ProSeeder presented their idea to corporate venturers and other investors.
The venue was provided by The Cannon, a co-working space and a venture studio for the Houston startup ecosystem.
Scott Crist
Chief executive, Osperity
An artificial intelligence (AI) assisted computer vision technology for the remote industrial sector, which has received backing from Shell and Evok Ventures. The technology helps industrial companies to reduce operational costs, while mitigating environmental and safety risks through virtual asset monitoring, improve compliance with automated leak detection and safety supervision and also strengthen security and accountability through proactive activity detection.
Jon Rogers
Chief executive, Locus Bio-Energy
A cost-competitive, biodegradable microbe-based solutions which provide custom-tailored treatments for client-specific conditions for enhanced oil recovery, viscosity reduction, paraffinic wax and asphaltene dispersal including the cleaning of rods, pipelines and flow lines, casings and solidified storage tank bottoms. The company claims it has developed a microbial treatment with a mobile fermentation system that can rapidly grow cultures on-site.
Gerrit Becker
Co-founder, Flug-Auto
A B2B company which has developed and designed a platform for cargo drones with the capabilities of a helicopter but at the cost of operating a van. The company’s unmanned aerial system is packaged as a platform-as-a-service to industrial customers from the oil and gas logistics and shipping sectors.
Michael Kezirian
President, Century Fathom
Century Fathom is seeking to develop a solution for the oil and gas industry by using NASA technology, which would be a cost-efficient, safe and sustainable method of producing natural gas from subsea reservoirs.
Victor Chaves
Founder and chief executive, Rio Analytics
Founded in 2016, Rio Analytics is a Brazil-based industrial Internet-of-things company that has developed a digital platform capable to predict failures, reduce downtime and increase operational efficiency. The platform employs advanced industrial analytics and AI to predict failures of industrial asset, optimise performance and increase assets’ service life.
Sarah Tamilarasan
Chief executive, Sotaog
A SaaS company providing asset optimisation for industrial facilities. Sotaog uses proprietary edge and cloud algorithms to create “digital twins” of the assets to optimise the client’s operations. The 360-degree view of operations the solution offers combines predictive analytics, edge and cloud computing.
Gray Alton
Facility integration manager, Terrapin
Canada-based company Terrapin develops custom-made waste heat recovery projects for industrial clients by identifying, validating and modelling industrial heat recovery opportunities. Terrapin has developed a solution for Capstone Infrastructure, an operator of 23 plants in Canada.
Griffin Schultz
Chief executive, Rapid Flow Technologies
The company offers an AI-based system dubbed Surtrac – an adaptive traffic signal control system originally developed in the Robotics Institute at Carnegie Mellon University as part of the Traffic21 research initiative. Surtrac is currently deployed in cities like Pittsburgh, Atlanta, and Portland, Maine. The company claims that it helps to reduce congestion and pollution in addition to improving safety and helping connected cities prepare for a multi-modal future including connected and autonomous vehicles.
Day 2: investing in the future of energy
James Mawson, founder and editor-in-chief of GCV and Tom Whitehouse, senior advisor and contributing editor and chief executive at energy-focused investment bank Leif Capital, welcomed the attendees of the third annual GCV Energy conference. Whitehouse thanked Chevron Technology Ventures for suggesting the concept and the rest of the sponsors.
The first panel discussion dealt how transport and energy could disrupt one another. It was moderated by Erin Boyd, ProSeeder’s energy sector thought-leader on the energy sector. The panellists were Michael Lohnert, managing director at Boeing HorizonX Ventures, the venturing unit of the aircraft manufacturer, Kevin Deneen, principal at Schneider Electric Ventures, the venturing subsidiary of industrial conglomerate Schneider Electric, Ugo Catry, VC principal at Total Energy Ventures, the venturing arm of the oil and gas major and Ravi Mulugu a venture investor at UL Ventures, the venturing unit of compliance and advisory services provider UL.
Boyd noted electric transport does not typically lead one to think about aviation. Lohnert then highlighted some of the technical challenges around the electrification of aircraft: “We need sufficient energy density in batteries for aircraft, so it is a completely different profile from electric road vehicles.” He explained the focus on Boeing’s venturing unit in innovative technology, stressing that “it is about safety” and explaining how Boeing has had to address the problem of noise pollution. Catry added that “electrification is an opportunity for any kind of transportation.”
Mulugu also spoke about security and safety issues in electric vehicles: “It is not just cars but also IoT devices in hospital environments and industrial settings. We do not want to have tech that can jeopardise anyone’s security.”
Deneen commented on the increasing availability of new electric vehicles: “There will be 60 models by the end of next year and over 100 by the end of 2022.”
When speaking of macroeconomic and regulatory trends, Catry noted the important role that regulatory frameworks that have let an oil company like Total to look into electric transport: “Being part of the EU regulation on CO2 emissions, it is definitely a driver for the further development of electric transportation in Europe. We need to find better batteries and to reach a competitive price range”
The panel touched on measuring strategic value – the perennial question for CVCs that lacks a one-size-fits-all answer.
Mulugu and Lohnert commented on the potential use of technologies from portfolio companies in the business units of the corporate parent. Deneen explained how SE Ventures invests “at the edge of the future of Schneider”, so that leads to plenty of cases of very near-term commercial agreements and also mentioned that the unit is involved in spinning out independent businesses.
Advanced mobility pitches
In between each panel, there were short presentations by promising companies from a particular space relevant to the energy sector. Each of the companies was introduced by one of their corporate venture backers.
First, it was the turn of advanced mobility businesses.
Olivia Risset
Senior scientist, Cuberg
Introduced by: Michael Lohnert
Cuberg is an energy startup company developing a battery technology based on a non-flammable liquid electrolyte formulation and a lithium metal anode. Cuberg delivers an improvement in energy density (80% more) and safety compared with today’s best lithium-ion batteries. The technology is a drop-in solution that can be manufactured and scaled through existing lithium-ion production equipment. It has been tested successfully in a variety of commercial-format prototypes and is being evaluated by customers in the defence, aerospace, and oil and gas industries.
Kofi Asante
Head of strategy and business development, Elroy Air
Introduced by: Ugo Catry
The company is backed by Total Energy Ventures and Brazil-based aircraft manufacturer Embraer. Founded in 2016, Elroy Air develops autonomous unmanned aerial vehicles that can deliver up to 300lbs of cargo within 300 miles. Its system features rotor-based vertical takeoff and landing as well as transitions to wing-based cruise flight for long range. The company has also designed a logistics system with integrated flight and ground operations. Elroy Air claims that its drones are three to five times faster than ground transportation, and have 10 times the fuel efficiency of an aeroplane, which makes their operating cost comparable to ground transportation.
Sila Kiliccote
Chief executive, eIQ Mobility
Introduced by: Kevin Deneen
eIQ Mobility offers an “electric fleet as a service” solution to large commercial fleets. It claims to pave a high-speed and risk-free way to zero-emissions mobility for fleets. The company’s offering includes conducting an analysis of a client’s existing fleet to determine how many vehicles can be electrified and how much money can be saved. It also provides servicing of the vehicles.
Nina Qi
Chief operating officer, Voyage
Introduced by: Nick Brumleve, future energy advisor at Chevron
Founded in 2017, Voyage develops and offers autonomous transportation solution for retirement communities in the US. Its vehicles – employed in a retirement community with residents – move at 25 mph.
Low carbon – this time it is different
A panel discussion on low carbon venturing was moderated by Charlie Walker from Silicon Valley Bank’s corporate venture relationships and Innovation Next moderated the discussion. Andrea Course, venture principal at Shell Ventures, the venturing arm of oil and gas major, Shell, along with Amit Sridharan, director of investments at Mahindra Partners Ventures, venturing arm of India-based car manufacturer Mahindra & Mahindra, Michael Young, managing director at Caterpillar Ventures, the venturing subsidiary of heavy machinery manufacturer Caterpillar, and Chris Smith, managing director at Energy Innovation Capital, a venture firm with multiple corporate LPs.
Walker set the theme of the discussion as “Low carbon, not no carbon!” Young from Caterpillar concurred: “To your point, low carbon is the answer, not no carbon. I do believe, as we look forward, that cost sensibility and economics will eventually take the day. And we have a huge opportunity in front of us to be a leader in the [energy] transition, but it is [ultimately] about helping our customers to really meet their needs.”
Smith of Energy Innovation Capital noted that his team had been looking at the declining share of traditional liquid fuels and the increase of natural gas and renewables in forecasts for the next 10-15 years, which raises a question: “How do we become more efficient with less environmental impact?”
Andrea Course highlighted the importance of the primary role of energy companies like Shell – to provide energy in a world that is witnessing serious demographic, perceptional and technological shifts.
She said: “Energy demand is growing and population is growing. There are still a lot of people with no access to energy. So, how are we, as an operator, going to be able to provide that energy, while everybody is demanding cleaner and low carbon alternatives? In the energy transition, it is about figuring out what is the best in doing both – providing more energy and making it more efficient. So, in my mind, it is not about us versus them or about fossil fuels versus renewables. We need to embrace all of them and provide energy to the people who need it.”
Sridharan added that thanks to the advance of renewable energy and digitisation in recent years, “we are seeing solar power grow faster in India”. He also said that the combination of solar with better and cheaper battery technologies makes solar a “much more practical and economical solution for a lot of places in Asia and Africa.”
He also commented on the decreasing costs of battery technologies: “Cost are falling down but not enough to take off in cars yet”, referring to the need for battery power for longer driving distance with EVs.
Young also commented on the crucial role of energy storage innovation in making renewable economically feasible: “A lot of the renewable energy out there is really unusable without storage technologies, so we are looking at opportunities to store it more economically.”
The panellists also spoke about innovative technologies aid corporation in reducing their carbon footprint.
Course noted that Shell had set up a special division dedicated to offsetting carbon emissions, “so we are looking at companies that can help with that”. Young said that Caterpillar Ventures is also looking at CO2 capture companies, while keeping in mind its customers and “trying to make sure they adopt good solutions from an environmental and economic perspective”.
Sridharan noted that his corporate parent, Mahindra & Mahindra, is a significant player in agriculture, so its venturing unit is also seeking deployable carbon solutions from startups.
Low carbon energy transition pitches
Chief executives or senior vice-presidents from startups in the space were introduced by their corporate backers.
Ben Schuler
Chief executive, Infinitum Electric
Introduced by: Dewey McLemore, Chevron Technology Ventures
Founded in 2016, Infinitum Electric is the designer and producer of electric motor and control technology, which makes them more efficient, more durable, lighter, more economical and quieter. Its products employ proprietary patent-pending Printed Circuit Board stator technology and provide broad application across multiple industries.
Christian Jacqui
Chief executive, Synova Power
Introduced by: Michael Young,Caterpillar Ventures
Founded in 2012, Synova offers a technology for converting waste-to-value, and sells the equipment and develops projects that use its technology. The process gasifies and strips post-recycled waste or biomass of contaminants, creating a stable, green alternative to natural gas. This alternative gas is suitable for chemical production, use in engines or combined cycle gas turbines. The company claims that its technology is cost-effective, with contaminants removed before the gas is used through a process with roughly one-tenth the volume of competing technologies like incineration or conventional gasification.
Daniel Henbest
Chief executive, Intelligent Power Generation
Introduced by: Tom Whitehouse, Leif Capital
The company is a clean technology platform focusing on power generation solutions, electrification of road transport and aerospace, founded in 2015. It is developing a replacement for the internal combustion engine, which could run on different types of fuels – from oil and diesel and natural gas to ethanol, biofuels and hydrogen. Its several applications can potentially solve problems in EV charging and distributed power as well as in industrial and community power.
Kerstin Rock
Senior vice-president, LO3
Introduced by: Andrea Course, Shell Ventures
LO3 Energy has built a marketplace platform, Pando, which enables neighbours connected over an existing grid infrastructure to carry out peer-to-peer energy transactions with energy from their own renewable sources. Its goal m is to help utilities and retailers integrate solar energy and battery storage. Pando is currently deployed in Australia, the US, the UK and Germany. Implementation is underway in countries like Japan, Colombia and Denmark. The company was founded in 2012.
Satish Rao, partner at strategy consulting firm Clareo, interviewed Sayun Sukduang, president and chief executive of Engie Resources in a fireside chat about his perspective on energy transition.
Sukduang shared with the audience how Engie spotted the beginning of a major transition: “We build large-scale power generation infrastructure worldwide and in 2015, we realised that centralised infrastructures started to wane in terms of underlying economics. Price spikes indicate there may be need for more powerplants but [it is] better to work with customers to prevent such spikes.” He also noted that the major driver behind making Engie a more customer-facing business has been “renewable non-carbon emitting generation – wind and solar increasingly greased with storage”.
Sukduang also shared his reflections on digitisation of the energy space and the fuzzy areas in consumers’ perception of it: “Everyone is going after figuring out how to combine the electron and the megabyte and we, as a society, have very tenuous knowledge of it. Nobody can tell me the intrinsic value of a kW. We [generally] do not know what it costs to power a lightbulb. A megabyte has a limited intrinsic value. When you bring the two together, can you start selling what we really want at the end of the day?” He also noted that new entrants in this space tend to look “from a consumer perspective.”
When asked about the potential for disruption in transportation, Sukduang noted that there is a process of convergence in transportation and that one of “the tipping point” for his business with mobility is electrification.
Digital energy technology pitches
Presentations by businesses introduced by representatives of their corporate venture backers.
Jean-Marie Laigle
Chief executive, Belmont Technology
Introduced by: Chad Bown, BP Ventures
Belmont Technology is a Houston-based company building a cognitive system to augment human intelligence for oil and gas exploration and production. The company’s technology, dubbed Sandy, helps technical teams and their management make better decisions in a fraction of the time previously required. It employs advanced AI techniques to reveal patterns and relationships within heterogeneous geoscience data sets.
Brian Ahern
Chief executive, DotProduct
Introduced by: Lee Sessions, Intel Capital
Ahern’s company develops high performance, easy-to-use solutions for capturing spatial data, designed for customers in need of high-quality 3D data. The company’s Dot33D software turns Android and Windows tablets into a 3D-capture and processing solutions. Dot3D captures and registers the data using only a tablet and any 3D camera that is available. No desktop or laptop is required. The software and its output are also compatible with virtual reality integration technologies.
Chris Rohde, Founder and president. Hypergiant
Introduced by: Stuart Coleman, Chevron Technology Ventures
Founded in 2018, Hypergiant Industries has built an AI-based platform with sensors and cameras for 4D representation. The platform is used as a spatial intelligence tool for safety and security monitoring. It employs machine intelligence-driven technology to make sense of data at the intersection of critical infrastructures for industrial clients.
Mat Podskarbi
Vice-president, Akselos
Introduced by: Matthias Engel, Innogy Ventures
Akselos is the creator of a digital twin technology designed for structural mechanical assets. Founded in 2012, the company operates in Europe, the US and Southeast Asia. Its products are designed to protect critical infrastructure with simulation software that can build an accurate, detailed models of large-scale operational assets and run those simulations using only a portable computer.
Saikat Dey
Chief executive, Guardhat
Introduced by: Michael Young, Caterpillar Ventures
Founded in 2014, Guardhat has devised a smart hardhat that allows supervisors to monitor wearers’ health, safety and work environment. It can detect, alert and help prevent hazardous industrial work-related incidents. The IoT device connects to software that measures parameters such as heart rate and body temperature.
Democratisation of energy
Xavier Helegesen, CEO of Zola Electric delivered a keynote talk on the democratisation of energy access in the developing world through solar energy combined with smart storage. He compared the cost of solar energy and battery technologies to an asymptote function, in which one line approaches infinity and another approaches zero. With this analogy, he was referring to the declining costs of both technologies.
Helegesen also explained to the audience that the purpose of his company, Zola Electric, was to satisfy the demand for electricity in areas that are often affected by power cuts and outages. He cited estimates that there are more than 2.2 billion people and millions of businesses who lack access to affordable and reliable power across developing nations in Africa, South America and Asia. He pointed out, however, that one of the most economically meaningful ways to deliver “electricity by western standards” to people from these regions is through diesel generators. Thus, Zola has developed what it calls “integrated power system”, which is a grid-integrated, modular, plug-and-play electricity generation and storage device. The solution costs $2000 but financed over five years it is cheaper than diesel generators, Helegesen assured the audience.
Globalisation and diversification
Wade Bitaraf, founder of Plug and Play Energy & Sustainability, took the stage and moderated a discussion on how globalisation and diversification can enrich a local innovation ecosystem.
The panellists were Diana Grauer, director of external technology engagement and venture capital at TechnipFMC, an oil and gas services company, and Bradley Andrews, president of digital at Worley, a provider of professional project and asset services in the energy, chemicals and resources sectors.
Both Grauer and Andrews expressed the primarily strategic orientation of their investing and open innovation activities. Grauer said: “We are 100% strategic. We are not focused on the conventional financial returns, so we look at technology adoption rate by our businesses, we also look at number of pilots and we have some criteria around the exit of such technologies, either to our business or to a third party.”
In much the same vein, Andrews explained: “Generally we are not looking for a return from an exit. It has to drive a business case. We love it when we can take our own IP and combine with a solution from startup and make something more accretive.”
Both panellists shared their views on the question of challenges in energy corporate venturing. Andrews mentioned how investing in startups is somewhat of a novelty to the broader energy and chemical sector: “The idea of investing in startups as a corporate is a bit new in the sector. We used to build things from within. I think we are still, as an industry, figuring out how to do this [type of investing]. Some of the challenges are just getting our people and our customers to think about piloting. On the startup side, on the other hand, they are used to moving very quickly….and I think there is still a gap in confidence in both the startup community and the venture community.”
He also listed some of the key questions that are worth asking embarking on such an investment undertaking: “Can we actually build companies that are dedicated to this industry? Because when I asked VCs if they wanted us to create an energy startup that focused on oil and gas some years ago, they would have nothing to with it. So, how do we get the VC people to be willing to invest? And on the industry side, how do we make corporates more confident in working with these startups? I think questions like these help.”
Grauer concurred with Andrews’ outline of the challenges and said that the biggest challenge encountered internally, in her experience, can be encapsulated in the question: “Why don’t you fund me and our business group can invent this ourselves? And the answer that I always give is: Well, we need to move faster than that.” She also spoke the fear of failure as another big hurdle: “Everyone is absolutely terrified of failure and I can understand why. The risks are very, very high in this industry. People get hurt if you fail sometimes. So what we need to do is spend some time de-risking those projects in pilot opportunities with startups, outside of the equity investment, keep those two things completely separate.”
Advanced manufacturing robotics pitches
Businesses from the manufacturing and robotics space, introduced by one of their corporate venture backers.
Dianna Liu
Chief executive, Arix Technologies
Introduced by: Mike Mahan, Stanley Ventures
Arix is a company that develops crawling robots for pipeline inspection in the oil and gas industry. The Arix robot is designed to navigate a variety of obstacles in petrochemical facilities. It features data analytics systems to help refineries with asset inspections, which may jeopardise the safety of refinery assets. The robots can collect data on each point they move over.
Martin Keighley
Chief executive, Carbonfree Chemicals
Introduced by: Chad Bown, BP Ventures
Carbonfree Chemicals has developed proprietary technologies that capture flue gases which would otherwise release CO2 into the environment and transform them into solid carbonate materials like sodium bicarbonate, hydrochloric acid, caustic soda and household bleach. The technology, dubbed SkyMine, can be potentially employed at all types of manufacturing plants to reduce pollution and create more green and useful products.
Alex Reed
Chief executive, Fluence Analytics
Introduced by: Chris Smith, Energy Innovation Capital.
Formerly known as Advanced Polymer Monitoring Technologies, the company was spun out of Tulane University in 2013 and rebranded in 2017. It manufactures of industrial and laboratory monitoring solutions that produce continuous data streams. The company boasts two product lines, ACOMP and ARGEN. Combined with proprietary analytical tools, the data enable real-time optimisation leading to improved process control and faster R&D for polymer and biopharmaceutical manufacturers.
Energy venturing – easier or harder?
The final discussion on stage at GCV Energy revolved around whether energy corporate venturing is becoming easier or more difficult. Tai Hsia, special counsel at law firm Baker Botts, moderated and led the session. Panellists included Juan Muldoon, principal at Energize Ventures, an energy-focused venture firm with corporate LPs, Ricardo Angel, chief executive and managing partner at PIVA – the US-based venturing unit of Malaysia-based oil and gas company Petronas – Matthias Engel, managing director of Innogy Ventures and Kemal Anbarci, managing executive at Chevron Technology Ventures.
Hsia asked the panellists about the changes that have taken place in the role of CVCs. Anbarci observed that corporate venturers have evolved and learned some of the unwritten rules of the VC game: “On the behavioural side, the biggest difference I see is the maturity of the CVCs. They have now been in business for a while and have established [certain] practices… If you ask for right of first refusal and try to hold the exits, it hurts the startup and people learn this lesson all the time and when that happens, their dealflow dies because no one wants to invest with them.”
According to Ricardo Angel of PIVA, the most notable differences have taken place in terms of decision-making: “Over time, the decision-making processes within the corporate organisations have improved a lot.” He also stressed that for financially driven corporate ventures, it is important to align the interest of the team with a carried interest (“carry”) compensation structure in place.
Engel highlighted the role of an appropriate venture team: “The important things is to set up a team that knows how VCs work and someone who understands what challenges founders face today.” He agreed on the importance of proper incentives by stating: “We have a VC structure and also implement ‘carry’ to promote the mindset of financial discipline.”
The only participant on the panel from a traditional VC firm, Muldoon commented on the increasing presence of energy-related investments that are not necessarily in pure-play energy companies: “A lot of the technologies we see and like tend to not be born in the energy space but have massive applications here. We like them for a number of reasons… From revenue and diversification perspective, it is better to have not just different clients but different client profiles with different buying cycles, different personas and different abilities to scale in the organisation.”
Anbarci concurred with Muldoon on diversification but touched on the topic of organisational challenges that prevent startups from swiftly becoming clients or suppliers of a large corporation. Anbarci explained how his CVC has found a way around it: “I also think diversification of the clients of the portfolio company is desirable but it is incumbent on us to overcome organisational sluggishness challenges that may arise… At Chevron Technology Ventures, we have established a sandbox where we could test a technology from a startup at Chevron, figure out what works and what does not and all usually within days, so that makes things a lot easier.”
The panellists also commented on the trend towards investing in companies developing more digital solutions instead of capex-heavy startups. All agreed the energy sector is looking to transition away from CO2 but there has been a lot of convergence with digital solutions. When asked what technologies they felt excited about, there was a consensus on AI’s enormous potential. Anbarci also mentioned his interest in drone technologies and big data companies converting data into action.
Angel said he felt “very hopeful about hydrogen and very excited about AI and the value it can bring to improve real time operations, sensor technologies to be solve problems related to CO2 emissions or gas leakages.” Engel, in turn, mentioned an important element of the emerging digital world: “Cybersecurity – if critical infrastructure becomes digitised, it needs to be secured somehow.”
Muldoon highlighted edge computing and analytics as an exciting space but placed emphasis on an emerging theme Energize Ventures had been looking at: “Over the past 12 months, we have been developing a theme on ‘connected worker’ – how to make sure distributed labour has access to the right information and right technology and how they can interface not just with the assets but with the rest of the business in a more efficient way.
GCV Energy Awards
The conference concluded with the 2018-19 GCV Energy Award ceremony. The winners were announced by Tom Whitehouse of GCV, Natalie Alfaro Gonzales, partner at Baker Botts, and Gerald Brady, managing director at SVB Network.
The Advanced mobility CVC investment of the year award went to Metawave, a US-based wireless technology company that builds intelligent and high-performance automotive radars by leveraging metamaterials and AI. The company has been backed by carmakers Toyota, Hyundai and SAIC automotive part manufacturer Denso, semiconductor manufacturer Infineon and glass producer Asahi Glass.
Low carbon CVC investment of the year was awarded to Calysta, a US-based company, backed by BP Ventures, which develops and commercialises an alternative protein, created from methane, for feed ingredient for fish, livestock and pet nutritional products.
The Advanced manufacturing CVC investment of the year award was given to Markforged, a US-based company which makes industrial 3D printers for manufacturing and factory floors that print metal, carbon fibre, stainless steel and fiberglass. The company has received backing from software producer Microsoft, industrial conglomerate Siemens and carmaker Porsche.
And finally, the Digital energy CVC investment of the year went to LO3, a US-based company that has developed a marketplace platform for peer-to-peer energy transactions, backed by Shell Ventures. Kerstin Rock, senior vice-president of the company, who had pitched before audience earlier, received the award.
