There has been quite a turnaround in the oil and gas industry. The year 2020 will go down in history as a very eventful one for black gold. West Texas Intermediate (WTI) oil prices stood at above $70 per barrel in the middle of the year but pressures on demand and supply made the price lower than $20 when pandemic reached the Western world and stay-at-home orders were imposed en masse. WTI futures contracts even entered negative territory in April which made for memorable headlines, though it was because of a technicality related to their physical delivery settlement. Since then, however, oil prices have moved considerably up and there is some uncertainty as to whether OPEC countries will agree to raise production, while oil inventories in the US are falling.
In these interesting times, oil and gas majors and their peers have remained active in corporate venturing, irrespective of headwinds or tailwinds. Over the latter half of the past decade, we have been observing a shift of focus among oil and gas corporates, still very evident today and likely to continue the post-pandemic world. Many of the disclosed deals tend to go into emerging businesses from non-core areas, primarily in IT
and cleantech, as well as transport and mobility.
It is precisely these non-core areas which are deemed to have the most disruptive potential to the core business of oil and gas, as low-carbon energy technologies may replace or eat up the position of fossil fuels. The increasing adoption of electric vehicles may affect a considerable part of oil and gas companies’ customer base. There has also been an increasing digitisation of industrial activities, which has a tangible impact on production and efficiency.
However, it is reasonable to expect more investments in core oil and gas technologies, particularly in companies whose solutions provide significant cost savings or that make operations less polluting. These investments will continue to form part of the portfolios of the sector’s corporate venturers due to its capital-intensive nature, contingent on the swings of commodity prices. Any innovation that improves processes and reduces fixed costs is likely to be embraced.
Over the long haul, corporate venturing arms of oil and gas incumbents will continue to be more strategic rather than purely financial. In addition to investing in technologies that may profoundly disrupt the sector, strategic benefits may come in the form of building an ecosystem, finding suppliers or helping business units with specific technical challenges.
The sector in charts
During the second quarter of 2021, cleantech, transport and IT startups received more attention than other areas. The average size of deals in which oil and gas corporate venturing peers participated stood at $43.34m, an upwards move. In total, we tracked 77 deals by the peer group conducted over the first six months of this year, which were worth an estimated $3.95bn – a figure that clearly surpasses the midpoint from any previous year. This suggests that investment activity has increased and so have valuations.
UK-based BP has disclosed a significant number of rounds in cleantech and transport companies since 2014, along with investments in core operation technologies and biotech.
France-based Total has placed heavy bets on cleantech and transport, while Anglo-Dutch company Shell has been focused on both cleantech and core oil and gas technologies as well as IT.
US-based Chevron’s publicly disclosed commitments revolve around core energy operations, the digital dimension of its operation and recently cleantech.
Saudi Arabia-based Saudi Aramco has historically focused its minority stake investments on IT, core technologies but increasingly cleantech as well. In brief, nearly all oil and gas majors are involved in some way with the low carbon and advanced mobility opportunities on the venturing scene.
The oil and gas companies found among top corporate venture investors from the industrial and energy sectors were oil and gas companies Chevron, Saudi Aramco and Shell.
Deals
US-based industrial cybersecurity technology producer Claroty raised $140m in a series D round co-led by 40 North, the investment subsidiary of industrial group Standard Industries. Venture capital firm Bessemer Venture Partner’s Century II fund co-led the round, which included consumer electronics provider LG, manufacturing technology producer Rockwell Automation, industrial technology maker Siemens and energy and automation equipment manufacturer Schneider Electric.
Claroty provides cybersecurity software that helps industrial companies protect their internet-of-things and operational technology assets. Its platform includes solutions for threat detection, risk management, secure remote access and visibility.
US-based logistics software producer Bringg completed a $100m series E round that included logistics service provider GLP, enterprise software producer Salesforce and industrial technology company Siemens. Growth equity firm Insight Partners led the round, which also featured Cambridge Capital, Pereg Ventures, Viola Growth and private investor Shmuel Harlap, while Salesforce and Siemens took part through Salesforce Ventures and Next 47 respectively. Bringg has built a cloud-based software platform that uses artificial intelligence (AI) to help organisations fulfil their e-commerce deliveries. The round valued it at $1bn post-money and the cash will support strategic acquisitions .
On-site power generation technology developer Mainspring Energy received $95m in a series D round featuring energy utility American Electric Power (AEP) alongside Chevron and Equinor. The round in the US-based company was led by Devonshire Investors, a private equity firm affiliated with financial services and investment group Fidelity, and included Princeville Capital, 40 North Ventures, Khosla Ventures, ClearSky, KCK Group and private investor Bill Gates. Chevron was represented in the round by Chevron Technology Ventures.
Founded in 2010 as EtaGen, Mainspring has developed a linear generator which can run on multiple types of fuels such as biogas and hydrogen. Its technology is based on research conducted at Stanford University and uses low-temperature chemical reactions to move oscillators through copper coils to produce electricity. The company claims its generators produce almost no emissions of nitrogen oxide, a pollutant that comes from burning fossil fuels.
US-based sustainable construction materials producer Solidia Technologies completed a $78m funding round featuring oil and gas supplier BP and building materials provider LafargeHolcim as well as BASF Venture Capital, Total Carbon Neutrality Ventures and Aliad, on behalf of chemical producer BASF, petroleum supplier Total and industrial gases producer Air Liquide. It last raised money, from OGCI Climate Investments in 2017.
Founded in 2008, Solidia Technologies has developed cement and concrete technology which it claims is more sustainable than standard concrete and cement.
Next47 contributed to a $60m series B round for US-headquartered API security platform operator Noname Security. Private equity and venture capital firm Insight Partners led the round with backing from ForgePoint Capital, The Syndicate Group, Cyberstarts and Lightspeed Venture Partners. Noname has built an online platform used by businesses to detect and resolve vulnerabilities in the security of application programming interfaces (APIs) and protect them from cyberattacks. It has secured 40 customers including a number of Fortune 500 companies.
US-based additive manufacturing technology producer Nexa3D revealed $55m in funding, raised across several rounds. The money was raised from Saudi Aramco Energy Ventures, a vehicle of Saudi Aramco; equity crowdfunding platform OurCrowd; an unnamed alternative asset manager and a range of undisclosed new investors.
Founded in 2014, Nexa3D produces stereolithography 3D printers it claims reduces printing cycles from hours to minutes. The printers are powered by the company’s lubricant sublayer photo-curing technology.
Seeq Corporation, a US-based provider of industrial internet-of-things technology, completed a $50m series C round featuring Chevron Technology Ventures, Saudi Aramco Energy Ventures and Cisco Investments, on behalf of Chevron and Saudi Aramco and networking technology provider Cisco Systems. The round was led by Insight Partners and included Altira Group and Second Avenue Partners.
Seeq had raised a total of $65m as of a series B round in September 2020 backed by all three corporates and Siemens’ Next47 unit. Founded in 2013, Seeq provides data analytics software that helps industrial clients monitor their manufacturing chains using real-time information extracted from connected devices such as sensors.
Capricorn Investment Group’s Technology Impact Fund led a $41m series B round for Seurat Technologies, a US-based developer of metal additive manufacturing technology that included Siemens Energy, a subsidiary of Siemens, as well as automotive component producer Denso and carmakers Porsche and General Motors (through GM Ventures). Founded in 2015, Seurat is developing an industrial 3D printer that can manufacture metal additives at what it describes as “unparalleled” speed and resolution.
US-based air-core motor developer Infinitum Electric raised $40m in a series C round that included Chevron Technology Ventures. The round was led by Energy Innovation Capital and also featured Cottonwood Technology Fund and Ajax Strategies, both of which joined Chevron Technology Ventures in a $12.5m series B round in late 2019 that increased Infinitum Electric’s overall funding to $15.2m.
Founded in 2013 as Fanergies, Infinitum Electric has developed electric-powered motors for use in commercial and industrial heating, ventilation and air conditioning units, and has plans to diversify into aerospace and oil and gas.
SignalWire, a US-based developer of software-defined telecoms technology, received $30m in a series B round featuring Samsung Next, a subsidiary of consumer electronics manufacturer Samsung. Prosperity7 Ventures led the round, which included Storm Ventures and private investors Jerry Yang and Dean Drako, and which came in the wake of an $11.5m series A round in 2019 led by Storm Ventures and backed by Samsung Next, Sequoia Scouts, AME Cloud Ventures, Yang, Drako, Ron Neuenberger and Erik Yang. Founded in 2017, SignalWire has created a technology platform that can be reprogrammed by enterprise clients to facilitate secure communications through media including telephone calls, internet voice calls and text messages.
US-based geothermal energy technology developer Fervo Energy closed a $28m series B round backed by petroleum drilling services provider Helmerich & Payne. Investment firm Capricorn Investment Group led the round, which also featured Congruent Ventures, the VC firm backed by University of California, as well as Breakthrough Energy Ventures, 3X5 Partners and Elemental Excelerator.
Fervo has created technology intended to increase the efficiency and lower the cost of harnessing carbon-free geothermal energy, and will use the financing to support geothermal projects across the western United States.
US-based nuclear fusion reactor developer Zap Energy has pocketed $27.5m in series B funding led by Addition, with contributions from Chevron Technology Ventures, Energy Impact Partners, GA Capital, Fourth Realm and LowerCarbon Capital. Zap Energy closed a $6.5m series A round, it revealed, after a report in August 2020 suggested Chevron Technology Ventures had supplied an undisclosed sum. Further details about the series A were not revealed. Zap Energy advances work conducted at University of Washington and Lawrence Livermore National Laboratory.
Circulor, a UK-based developer of supply chain tracking technology, completed a $14m series A round featuring Salesforce Ventures, BHP Ventures, Boeing HorizonX, TotalEnergies Ventures, Volvo Cars Technology Fund and InMotion Ventures, on behalf of enterprise software producer Salesforce, mining company BHP, aerospace manufacturer Boeing, oil and gas producer Total and automotive manufacturers Volvo Cars and Jaguar Land Rover.
Founded in 2017, Circulor provides an enterprise software platform that uses a combination of technologies including blockchain, business logic and machine learning. It assigns a digital identity to commodities and tracks the supply chain data and embedded carbon at each stage of production, recycling and end-of-life.
SeekOps, the US-based creator of a sensor for the detection of methane leaks, secured $14m in a series B round led by oil and gas services firm Schlumberger. Oil and gas provider Equinor and construction equipment manufacturer Caterpillar also took part in the round, investing through Equinor Ventures and Caterpillar Venture Capital respectively, as did OGCI Climate Investments. The company had received an undisclosed amount from Equinor Ventures and OGCI in 2019, following $3.3m from unnamed investors the previous year.
Founded in 2017, SeekOps provides end-to-end gas emissions inspection operations to oil and gas customers, including a proprietary sensor technology and Unmanned Aerial System deployment.
ZeroAvia, a UK-based developer of zero-emission aviation technology, received $13m from investors including Shell Ventures, the corporate VC arm of oil and gas supplier Shell, as well as e-commerce group Amazon’s Climate Pledge Fund. The round was led by AP Ventures, the VC firm backed by mining group Anglo American Platinum and oil and gas provider Equinor, and also featured Alumni Ventures Group, among many other investors in the round. Founded in 2018, ZeroAvia is developing a zero-emission powertrain for commercial air travel. The company is targeting hydrogen power to accelerate the world’s transition to sustainable aviation.
Red Sea Farms, a Saudi Arabia-based developer of technology that facilitates produce farming with salt water, raised $10m from investors including Wa’ed, a vehicle of Saudi Aramco. The round also featured Future Investment Initiative Institute, Global Ventures and King Abdullah University for Science and Technology (Kaust), and it came after Kaust Innovation Fund and Research Products Development Company provided $1.9m for the company in May 2019. Red Sea Farms is an agritech company that has developed smart and sustainable agriculture systems to produce pesticide-free vegetables.
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BP Ventures, the strategic investment arm of BP, supplied $7m to lead a $13.2m funding round for IoTecha, a US-based provider of smart vehicle charging products. Shaun Healey, principal at BP Ventures, took a seat on the board of directors. The round is on top of a $1.5m round led by electronics producer ECS in 2018. Founded in 2015, IoTecha has developed an integrated platform that includes software, hardware and cloud components for smart charging infrastructure of electric vehicles (EVs). The company claims its customers are prominent global charge point operators and manufacturers of EVs and charging stations.
US-based smart oil and gas technology developer mIQrotech has secured “nearly double” its $6m target for its series A round, with Chevron Technology Ventures among the participants. The round was co-led by Page Angel Investor Fund and an unnamed investor, according to Tampa Bay Inno. Founded in 2016, mIQrotech has developed an AI-powered technology that enables users to monitor pipelines and sending instant notifications to stakeholders . The technology can be used tominimise leak duration, detection time, pinpoint location and reduce annual clean-up costs.
Carmaker Hyundai led a $9m funding round for Israel-based automotive teleoperation technology developer Ottopia. The round included IN Venture, the Israeli corporate venturing arm of diversified industrial conglomerate Sumitomo, which has oil and gas interests. nVentures, MizMaa Ventures and Next Gear Ventures also contributed. It came after MizMaa Ventures led a $3m seed round in 2018 that also featured Next Gear Ventures, Glory Ventures and Plug and Play.
Founded in 2018, Ottopia Technologies is a software company which develops teleoperation systems that control vehicles remotely and safely. Its platform handles all types of vehicles, including cars, trucks, forklifts and shuttles.
EV.Energy, a UK-headquartered provider of EV charging services, secured $8.8m in series A funding from investors including energy utility Eon’s corporate venturing and collaboration vehicle, Future Energy Ventures.
Energy investment platform Energy Impact Partners led the round, which also featured merchant bank Cyan Finance, private investment vehicle Dunelm Energy and unnamed individuals. The transaction came after the company received a $330,000 grant from Innovate UK in December 2019.
IN Venture, a Sumitomo CVC vehicle, led an $8m funding round for Genoox, a US-based creator of a community-driven genomic data platform. Infinity Medical also took part in the round, as did Inimiti, Glilot Capital Partners and Triventures, the three investors that had provided $6m for the company in 2018. It had secured a total of $6m from an Inimiti-led seed round and a series A round led by Glilot Capital Partners, which were disclosed at the same time in 2017.
Japan-based electric scooter sharing app Luup has raised ¥750m ($6.9m) in a round led by Spiral Capital and backed by fellow venture capital firm Anri, casual clothing vendor Adastria, Eneos Innovation Partners, a corporate venturing arm of petroleum supplier Eneos Group, and multiple unnamed private investors. The fundraising effort for the round is ongoing and is set to close in the summer of this year. Luup secured an investment of undisclosed size from Daito Trust Corporation in December 2020.
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Malaysia-based digital health services provider Naluri completed a $5m funding round featuring pharmaceutical company Duopharma Biotech, laboratory services provider BioMark and Sumitomo Corporation Equity Asia, part of Sumitomo. Integra Partners, M Venture Partners, Palm Drive Capital, INP Capital, RHL Ventures and KB Investment also invested. The company received $240,000 in seed capital from BioMark and 500 Durians in 2018, $1.5m in pre-series A funding from Global Founders Capital, Stanford StartX Fund, TH Capital and unnamed private and existing investors in July 2019, and $1.1m from Duopharma, M Venture Partners and RHL Ventures in April 2020.
US-based carbon removal technology developer Boomitra raised $4m in a round led by agricultural chemical producer Yara through corporate venturing subsidiary Yara Growth Ventures. Chevron also took part in the round through Chevron Technology Ventures, along with private investors Jerry Yang, Tom Steyer and Kat Taylor.
Founded in 2016 and formerly known as ConserWater, Boomitra operates the world’s first international soil carbon market, where corporations and governments can purchase carbon credits, while farmers worldwide are incentivised to increase their soil carbon levels, sequestering CO2 out of the atmosphere. The company uses satellites to measure soil carbon levels without using any hardware or soil sampling.
Australia-based hydrogen power technology developer Endua was spun out of Commonwealth Scientific and Industrial Research Organisation with A$5m ($3.9m) in funding from petroleum supplier Ampol and Main Sequence Ventures. Endua is using electrolysis to make hydrogen-based power generators more accessible and less reliant on solar, hydro and wind power.
Germany-based actuator developer MetisMotion has raised €1.5m ($1.8m) from Siemens’ Technology Accelerator, High-Tech Gründerfonds and ZFHN Zukunftsfonds Heilbronn’s Born2Grow subsidiary. The same three investors provided $1.1m in 2018 after it was spun off by Siemens.
Shell Ventures provided an undisclosed amount for Celadyne Technologies, a US-based developer of technology intended to enhance the performance of hydrogen fuel cells and electrolysers. Celadyne, a University of Texas at Austin spinout, secured the funding in relation to its participation in the Third Derivative accelerator.
Saudi Aramco invested an undisclosed amount in Energy Vault, a Switzerland-headquartered developer of renewable energy storage systems, through Saudi Aramco Energy Ventures. Energy Vault received $110m in an August 2019 series B round led by telecoms and internet group SoftBank’s Vision Fund, having raised an undisclosed amount from Cemex Ventures, the investment arm of building materials producer Cemex. Founded in 2017, Energy Vault has created a modular, gravity-based system designed to store large amounts of solar or wind energy, in theory allowing it to be used as a baseload power source 24 hours a day.
Ocergy, the US-headquartered creator of a low-cost foundation for floating offshore wind turbines, received an undisclosed amount of series A funding from Moreld Ocean Wind and Chevron Technology Ventures, which invested on behalf of industrial group Moreld and Chevron respectively. The company did not reveal how
much it had raised but a regulatory filing indicates it had been targeting $2.2m.
Founded in 2019, Ocerg’s OCG-Wind is a low-cost foundation supporting very large turbines. Its other offering, OCG-Data, is an innovative multi-disciplinary ocean observer for complete offshore site assessment.
XCharge, a China-headquartered developer of electric vehicle charging technology, completed a series B round of undisclosed size that included Shell Ventures. The company’s website states that VC firms GGV Capital and ZhenFund co-led a series A round of undisclosed size for the company in 2017, following funding from consumer electronics producer Samsung and ZhenFund. The company was founded in 2015.
Starfire Energy, a US-based developer of carbon-free ammonia and hydrogen production technology, secured an undisclosed amount from investors including clean power producer New Energy Technologies, Chevron, gas utility Osaka Gas USA and industrial equipment manufacturer Mitsubishi Heavy Industries.
The round was led by VC firm AP Ventures, and Chevron took part through Chevron Technology Ventures. Founded in 2007, Starfire Energy has developed production technology of carbon-free ammonia and derived hydrogen fuel, using a proprietary and flexible process for making ammonia from air, water, and clean energy. It also has a proprietary process for harvesting hydrogen from ammonia.32
Oil and gas supplier Shell has provided an undisclosed amount of funding for LanzaJet, the jet fuel offshoot of sustainable fuel producer LanzaTech. The parent company was spun off in June 2020 with $36m in equity funding from oil and gas supplier Suncor, diversified conglomerate Mitsui and air carrier ANA and a $14m grant from the US Department of Energy (DoE). It then raised an undisclosed sum from airline operator British Airways.
LanzaJet has developed a process that can turn any source of sustainable ethanol into airplane fuel, including ethanol generated from recycled pollution. LanzaTech developed its alcohol-to-jet technology in partnership with the DoE Pacific Northwest National Laboratory.
Electrochaea, a Germany-based developer of renewable methane production technology, raised an undisclosed amount from investors including energy technology producer Baker Hughes, which acquired a 15% stake, gas distributor Energie 360° and energy utility Engie’s energy storage subsidiary, Storengy.
They were joined by Munich Venture Partners (MVP), KfW, Caliza, Focus First and Btov Partners. The company had raised an undisclosed sum from Nidus Investment Partners in 2011 and ‘several million euros’ in series A funding from MVP, Btov Partners, Caliza, Focus First, KfW and Sirius Venture Partners in 2014.
Leasing services provider Sumitomo Mitsui Finance and Leasing Company, energy utility Shikoku Electric Power Company and Sumitomo have combined to provide an undisclosed amount of series E funding for renewable power producer Sunseap. The company last raised money in February 2020 when another energy utility, Banpu, supplied $72m in series D4 financing to take its overall funding to approximately $368m. Its earlier backers include conglomerate Chow Tai Fook Enterprises and Shell Ventures.
Founded in 2011, Sunseap operates several subsidiaries focused on solar energy, including a solar leasing business, an off-site renewable energy supply arm, and an engineering, procurement and construction division for photovoltaic projects.
We also reported other deals partially related to the oil and
gas sector.
Thailand-based e-commerce shipping service Flash Group raised 4.6bn baht ($148m) in series D-plus and E rounds featuring a host of corporates. The series D-plus round was led by SCB10X on behalf of financial services firm Siam Commercial Bank and included printing services firm Chanwanich Security Printing Company.
SCB10X also took part in a series E round co-led by Founder’s Fund and Buer Capital and backed by eWTP Capital, PTT Oil and Retail, Durbell and Krungsri Finnovate, subsidiaries of e-commerce trade association Electronic World Trade Platform (affiliated with e-commerce group Alibaba), conglomerates PTT and TCP Group, and financial services firm Bank of Ayudhya.
Founded in 2018, Flash Group provides diversified digital supply chain services through e-commerce logistics service
Flash Express, the large item-focused Flash Logistics, warehouse network Flash Fulfillment, parcel delivery agency Flash Home and financial services platform Flash Money.
US-based gas management technology provider Crusoe Energy Systems completed a $128m series B round featuring diversified holding group Exor, crypto exchange operator Coinbase and principal trading firm DRW. Investment firm Valor Equity Partners led the round, which included Bain Capital Ventures, the VC arm of private equity firm Bain Capital, among other investors. The equity funding was raised alongside a $40m project financing facility from growth financing provider Upper90. Coinbase and DRW participated through their Coinbase Ventures and DRW Venture Capital subsidiaries respectively.
Crusoe manages a network of 40 data centres which are powered by flared gas that would otherwise be wasted. They use its Digital Flare Mitigation technology, and the company intends to expand to 100 units over the course of the next year.
Wasabi, a US-based hot cloud storage provider backed by mobile network operator NTT Docomo, collected $112m in a series C round led by investment and financial services firm Fidelity. The round included unnamed existing backers as well as Saudi Aramco´s Prosperity7 Ventures unit, which participated alongside the venturing arm of disk-drive maker Western Digital.
Founded in 2017, Wasabi provides hot cloud storage services that enable businesses to quickly access their data. It claims its services are cheaper than traditional cold cloud storage offerings and faster than other hot cloud storage services. The company will use the series C funding to open data centres in new international markets, hire staff and expand its network of resellers, technology alliance partners and distributors.
Transport infrastructure producer Ferrovial has invested an undisclosed amount in Finland-based mobility app developer MaaS Global. The company had raised $33m in November 2019 from BP Ventures, as well as conglomerate Mitsubishi and Nordic Ninja. It had secured a total of $29.7m as of a $10.4m round in 2018, and its earlier investors include corporates Toyota, Karsan, Denso, Aioi Nissay Dowa, Swiftcom, Veho, Transdev, Korsisaari, Good Sign, GoSwift, IQ Payments and Neocard.
5 India-based electric vehicle charging technology developer Magenta EV Solutions secured $15m in series A financing from private backer Kiran Patel. Magenta had secured an undisclosed amount of seed financing from oil company Hindustan Petroleum in 2018, before securing an unspecified amount of funding from JITO Angel Network and LetsVenture in 2020.
Exits
In the second quarter of 2021 we also reported some notable exits from corporate venturers in the oil and gas space.
ESS, a US-based energy storage technology producer backed by corporate investors SoftBank, PTT Global, Evergy and BASF, agreed a reverse takeover with special purpose acquisition company (SPAC) Acon S2 Acquisition Corp. Acon S2 floated on in a $250m initial public offering (IPO) on the Nasdaq Capital Market in September, and the merged business will take its listing. The deal values ESS at $1.1bn.
Investment and financial services group Fidelity led a $250m private investment in public equity (PIPE) financing supporting the deal that included SB Energy, part of toftBank, as well as chemicals producer BASF and Breakthrough Energy Ventures. Founded in 2011, ESS produces grid-scale energy storage systems for use with renewable energy sources. They rely on iron-flow batteries, which ESS claims are sustainable and contain no hazardous waste.
Sarcos Robotics, a US-based industrial robotics technology manufacturer backed by software producer Microsoft, construction equipment maker Caterpillar, air carrier Delta and Schlumberger, agreed to a reverse merger. The company joined forces with SPAC Rotor Acquisition Corp in a transaction that valued them at a combined $1.3bn. Sarcos produces robotic exoskeletons that help users lift heavy objects. The merged business, Sarcos Technology, will take the spot on the New York Stock Exchange secured by Rotor in a $240m IPO in January 2021. Caterpillar subsidiary Caterpillar Venture Capital, Schlumberger and data analytics provider Palantir backed a $220m PIPE for the deal with Millennium Management, Jaws Estates Capital, Michael F Price and funds and accounts managed by BlackRock.
UK-based encryption technology developer Arqit agreed to a reverse merger with SPAC Centricus Acquisition Corp that will be backed by corporates Sumitomo and Virgin Orbit. The deal creates a new company called Arqit Quantum, valued at $1.4bn, which will take the listing Nasdaq Capital Market Centricus Acquisition got in a $300m IPO in February.
The merged business will receive approximately $70m from a PIPE deal featuring satellite launch services provider Virgin Orbit – which is contributing $5m – conglomerate Sumitomo Corporation and investment holding company Heritage Group.
Founded in 2017, Arqit has developed a software platform which uses cloud-based quantum encryption technology to secure digital communication. It has operated in stealth mode until recently. The proceeds from the deal will be used to commercialise the company’s products and support the launch of two satellites.
US-based 3D printing technology developer Shapeways, which has enterprise technology producer Hewlett Packard Enterprise and Sumitomo as backers, agreed a reverse merger with SPAC Galileo Acquisition Corp. The merged business will take the spot secured by Galileo Acquisition Corp on the New York Stock Exchange. Galileo listed in a $120m IPO in October 2019. The combined company is also set to raise $75m in PIPE financing from a consortium including 3D printing system provider Desktop Metal, Miller Value Partners, XN, Lux Capital, Union Square Ventures, Inkef Capital and Andreesen Horowitz.
Founded in 2007 as a spinout from electronics and medical technology producer Philips’ lifestyle incubator, Shapeways provides digital additive manufacturing design software and services through an online platform. Users upload their creations and choose from more than 60 different materials and finishes before selling on a dedicated marketplace.
On-demand consumer product supplier Gopuff agreed to purchase US-based mobility software provider RideOS in a deal reportedly sized at $115m. Siemens and engineering firm ST will exit. They backed a $25m series B round for RideOS through CVC units Next47 and ST Engineering Ventures with VC firm Sequoia Capital in 2018, following a $9m series A led by Sequoia that featured Graph Ventures and SV Angel.
RideOS has created a software platform that helps on-demand transport providers manage their businesses, covering the positioning and dispatch of vehicles as well as organising single and multi-rider journeys.
Nostromo, an Israel-based cold-energy storage technology developer backed by corporates Shell, road haulage and logistics provider Taavura Group and insurance firm Menora Mivtachim, raised $13.6m through a merger with Tel Aviv Stock Exchange-listed distribution and monetisation software producer Somoto. Founded in 2017, Nostromo has developed a cold energy storage system which uses electricity to cool modular thermal ice cells when energy demand is low and discharges cooling when consumption is high. The technology is for use in large buildings with a high demand for air conditioning.
Mobility services provider DKV acquired Netherlands-based vehicle charging technology provider GreenFlux for an undisclosed amount, enabling energy utility Eneco and industrial technology and services provider ICT Group to exit. The company secured $13m in series B funding from Eneco, ICT, Set Ventures and Brabantse Ontwikkelingsmaatschappij (BOM) in 2018, identifying ICT and BOM as existing investors. Founded in 2011, GreenFlux has developed charging for electric mobility.
Smart meter technology producer Geo acquired Onzo, an energy data analytics provider that has counted energy utilities SSE and Eneco as investors, for an undisclosed sum. Eneco had invested an undisclosed amount in the UK-based company in 2017, following $4m from SSE and Sigma Capital Group in 2008, $1.7m from West Coast Capital and Cipio Partners in June 2014 and $6.3m from the latter two six months later. Founded in 2007, the company has developed an analytics tool for energy consumption.
Funds
US-based venture capital firm G2 Venture Partners (G2VP) closed its Fund II at $500m with commitments from Shell, diversified conglomerate Mitsui, carmaker Daimler and industrial technology producer ABB Switzerland. The McKnight Foundation and John Doerr, chairman of VC firm Kleiner Perkins, also committed to the fund. Shell contributed through its venture arm. It was also a limited partner in G2VP’s inaugural fund, which was sized at $350m.
G2VP was founded in 2017 as a spinoff from Kleiner Perkins’ Green Growth fund. It focuses on companies developing emerging technologies that could accelerate sustainable transformation in traditional industries.
The firm’s portfolio companies include Proterra, the electric bus producer that agreed a $1.6bn reverse takeover in February 2021, as well as computer vision software provider Scandit and autonomous commercial vehicle developer Seegrid.
Japan-headquartered automotive manufacturer Toyota committed another $300m in capital to its corporate venturing unit and rebranded it from Toyota AI Ventures to Toyota Ventures. Toyota AI Ventures launched under the auspices of the company’s Toyota Research Institute in 2017 with $100m in capital. Toyota provided a further $100m for its Fund II in late 2019.
The capital will be divided evenly between two funds. Toyota Ventures Climate Fund will concentrate on developers of innovative technologies to promote carbon neutrality, such as renewable energy and hydrogen production. Toyota Ventures Frontier Fund will invest in developers of technology in areas like AI, cloud computing, autonomy, mobility, robotics, smart cities, digital health, advanced materials, energy and financial technology.
US-based VC firm Congruent Ventures has raised $175m for an early-stage climate technology fund, from limited partners including software producer Microsoft. The firm targeted $125m for the close but surpassed that figure with commitments from Microsoft’s Climate Innovation Fund and VC firm Prelude Ventures.
Founded in 2017, Congruent typically invests in technology companies that are addressing sustainability issues across sectors such as energy transition, mobility, agriculture and sustainable production. The fund has completed seven investments including in Parallel Systems, the developer of an autonomous, electric freight transportation system.
UK-headquartered energy utility National Grid committed an additional $150m to its corporate venturing arm, National Grid Partners (NGP). NGP was launched in 2018 with $250m in capital, $227m of which has been invested in approximately 25 companies including conversational speech software provider Uniphore, which raised $140m recently, and Dragos, the cybersecurity technology producer which secured $110m in December 2020.
The two newest companies in the portfolio, US-based spatial intelligence software developer Pathr and US-based container cybersecurity technology provider AccuKnox, have received a total of $7.5m from the unit. Lisa Lambert, NGP’s founder and president, said: “We are investing in and deploying technologies across National Grid’s networks to enhance resilience and reliability, while more easily integrating renewable energy.”
TDK Ventures, the CVC subsidiary of Japan-based electronics producer TDK, closed its second fund at $150m. The unit intends to tap the fund to build a portfolio of 50 early-stage companies over the next three years. It will focus on sectors including clean technology, advanced materials, industrial, robotics, energy, autonomous vehicles, EVs and health technology.
TDK Ventures typically invests between $250,000 and $5m in each funding round. Incubator Mach49 advises TDK Ventures, which launched in July 2019 with the close of its $50m first fund. It has since exited fuel cell technology developer GenCell, laser manufacturer SLD Laser and 3D printing technology provider Origin. It has 16 companies in its portfolio and $200m of assets under management.
UK-headquartered insurance provider Phoenix Group has formed a CVC unit dubbed Phoenix Venture Capital Partners, putting up an initial capital allocation of more than £100m ($137m). Asset manager Aberdeen Standard Investments will help run the fund, which will target local startups adhering to its environmental, social and governance criteria in areas including clean energy, financial and health technologies in a bid to boost employment opportunities in the UK. Founded in 1857 as The Pearl Loan Company, Phoenix Group runs multiple insurance, savings and retirement services. The company should not be confused with its Israel-based namesake, which is also a corporate venturing insurer.
Advanced materials producer Saint-Gobain has committed an undisclosed amount to China-based investment firm Richland Capital’s third VC fund. Founded in 2011, Richland invests across technology sectors including advanced materials, advanced manufacturing equipment, semiconductors, artificial intelligence and 5G networks. The firm is targeting up to RMB800m ($123m) for the close of Richland Capital Fund III, which it was expecting to take place by the end of June 2021.
The vehicle’s first close, in August 2020, was backed by Solvay Ventures, the investment arm of chemicals producer Solvay, as well as Nipsea, which invests on behalf of paint producer Nippon Paint, and Redbud, a fund-of-funds formed by Tsinghua Asset Management, part of Tsinghua University.
MetaVC Partners, a US-based VC firm, made a first close of its planned $100m debut fund, with commitments from Bill Gates, a co-founder of software provider Microsoft, and Nathan Myhrvold, formerly chief technology officer at Microsoft who runs intellectual property firm Intellectual Ventures. MetaVC has licensed about 200 patents on metamaterials from Intellectual Ventures for its companies to use, managing partner Conrad Burke told Wall Street Journal.
Burke and co-managing partner Chris Alliegro were previously executives at Invention Science Fund, a startup incubator at Intellectual Ventures that spun out several startups commercialising advances in metamaterials including Kymeta and threat-detection company Evolv Technologies, which is going public through a SPAC.
MetaVC has already backed optical computing company Neurophos and satellite-enabled telecommunication services provider Mangata Networks.
Spain-based asset manager Alantra reached the first close at more than €80m ($97m) for its Klima Energy Transition Fund including commitments from Enagás, a Spain-based gas grid operator.
The fund aims to raise €150m ito back companies accelerating the energy transition: low carbon gases, such as hydrogen, carbon capture, and biomethane; smart power grids, energy storage and renewable technologies; digitisation of the whole energy equation; and sustainable transportation.
Managing directors Bastien Gambini, former MD of Norway state-owned Equinor’s corporate venturing unit in Europe, and Lucille Bonnet, previously a principal at state and corporate-backed High-Tech Gründerfonds, lead Alantra’s team of six managing the fund.
Japan-headquartered infrastructure group JGC Holdings and its engineering subsidiary, JGC Corporation, have earmarked ¥10bn ($92m) for open innovation investments, half of which will go to a new corporate venturing arm. JGC Mirai Innovation Fund is set to operate for 10 years and will be managed by venture capital firm Global Brain. It will target developers of carbon neutrality, sustainable infrastructure, lifestyle improvement and smart industry technologies and products, in Japan and internationally.
Founded in 1928 as Japan Gasoline, JGC initially manufactured petroleum products. It has pivoted its focus to engineering services and diversified its business to cover construction, nuclear power, renewable energy, pharmaceuticals and healthcare globally. The group also intends to solve domestic social issues caused by factors such as an ageing population, declining birth rates and outdated infrastructure.
US-based venture capital firm Energy Transition Ventures (ETV) publicly launched its first vehicle, which is anchored by conglomerate GS Group’s corporate venturing arm, GS Futures, and GS Energy, its energy technology unit. ETV is targeting $75m for the fund and intends to raise additional capital from new investors, having reached an initial close in February 2021 and made its first investment in March.
The vehicle will target North America-based early-stage developers of technologies in areas including clean energy, distributed generation, electrification, sustainable mobility and resource optimisation.
Neal Dikeman, a partner at ETV, was a senior investor and head of North America for Shell Ventures for more than three years from 2013.
Brightlands Venture Partners, a Netherlands-based VC firm, has held the first closing of its fourth fund at €45m ($53m) including corporate commitments from DSM and Rabo. Joining the chemicals company and the bank as limited partners in BVP Fund IV were the Dutch province of Limburg and its regional development agency, LIOF. The Netherlands Enterprise Agency committed €10m was committed for investments in renewable chemistry .
Brightlands will invest in cleantech and health startups and scaleups in the Netherlands, Belgium and North Rhine Westphalia. Its prior deals include QC Polymers (mechanical recycling of commodity plastics), Ioniqa Technologies (chemical upcycling of PET), Black Bear Carbon and Fuenix (pyrolysis of used tyres and of mixed plastic waste), Neuroplast (treatment of paraplegia), Triplemed (aortic aneurysmas) and Matisse Pharmaceuticals (sepsis).
Samsung Engineering, part of the South Korea-listed conglomerate Samsung, said it would invest about KRW30bn ($27m) in its CVC fund targeting hydrogen and carbon neutral technologies. Samsung Venture Investment, the group’s local CVC unit, will manage the Samsung Engineering New Technology Business Investment Association (SVIC Number 51).
This is the first time Samsung Engineering has invested in its CVC fund, which manages money for other business units from electronics to industrials. Samsung Engineering is planning to actively develop blue hydrogen, carbon capture and plastic recycling technology and wants the CVC portfolio companies to help.
Petronas, a Malaysia state-owned oil major, has started the second edition of its technology accelerator programme for local startups. The Petronas FutureTech 2.0 accelerator is run by VC firm 500 Startups and has partnerships with government-linked companies Telekom Malaysia and Sime Darby Plantation.
The themes for the batch are industry 4.0, future of energy, digital transformation, retail innovation and specialty chemicals and advanced materials.
Petronas Ventures funded two companies from the first cohort: sustainable energy startup Sols Energy and Braintree Technologies, a developer of robotics and automation for agriculture technology.
US-headquartered gaming accessory producer Razer launched a $50m investment vehicle that will invest in sustainable product and environmental technology developers. Razer Green Fund’s capital will be deployed through the company’s corporate venturing unit, zVentures, and will concentrate on areas such as renewable energy, carbon and plastic management, with an eye on its youthful customer base. The vehicle’s first investment is in The Nurturing Co, a Singapore-based producer of sustainable consumer brands including Bambooloo, which offers toilet paper made from bamboo.
Tenacious Ventures, an Australia-based VC firm focused on agriculture and food technology, closed its first fund at A$35m ($27m). The local state-backed Clean Energy Finance Corporation and family office Grok Ventures have committed to the fund, Tenacious Ventures Fund I. The fund is targeting pre-series A businesses.
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Matthew Pryor, co-founder of Observant, and Sarah Nolet, founder of AgThentic, founded the firm, which has backed Goterra, SwarmFarm Robotics, Nori, Vow, RapidAIM and Nowadays. Tenacious is part of the Australian government’s Early Stage Venture Capital Limited Partnerships scheme.
Alexander Hain, lead for venture building and investment activities for Sweden-based utility Vattenfall’s wind (renewables) sector, moved to local peer EWE to be senior investment manager and executive director. Hain joined Vattenfall in May 2019 from Wincubator, Wilo’s innovation subsidiary. At Vattenfall, his venture building initiatives from its green:field innovation platform had included spin-offs of Proteqnic at the end of 2020 and Solytic in 2018. Vattenfall remains as a minority shareholder, strategic partner and customer. Proteqnic, an automated health monitoring and decision support for wind power operators, had its origin as one of the ideas in the Vattenfall Innovation Contest, Vattenfall’s internal idea competition for employees.
Daniel Wedberg, founder and managing director of Sweden-based truck maker Scania’s corporate venturing unit, has left to join electric vehicle startup Inzile as chief executive. Wedberg set up Scania Growth Capital in early 2017 and its deals include battery provider Northvolt, which recently raised $2.75bn. Inzile develops a fossil-free, modular transport and service and previous CEO and founder, Ragnar Åhgren, will remain within the company in business development. Wedberg said: “Inzile is a fantastic company that is perfectly positioned for the future in sustainable urban transport.”
Jelena Markovic, senior associate for BayWa Renewable Energy (BayWa RE), Germany-based trading conglomerate BayWa Group’s clean energy subsidiary, joined LBBW Venture Capital as an investment manager for the universal bank in the state of Baden-Württemberg. She said her investment focus was now business-to-business software startups in the German-speaking region of Europe (Germany, Austria and Switzerland – known by the acronym DACH), in late seed and series A rounds.
Markovic, a GCV Rising Stars 2020 award winner, joined BayWa RE Energy Ventures as a VC analyst shortly after it was formed in mid-2018. BayWa RE Energy Ventures backs early and growth-stage renewable energy technology developers based in Europe and Israel. Markovic told GCV she helped generate dealflow for the fund that resulted in its first three investments: Blixt, Raycatch and Zolar.
Adiari Vazquez joined US-listed online retailer Amazon’s sustainability-focused corporate venturing unit as an investment manager. Vazquez said in her LinkedIn profile she was “investing to bend Amazon’s carbon emissions curve”. She had spent a year as a UK-based associate at Next47, a CVC vehicle owned by Siemens, before leaving in 2020 to set up Braver Ventures. Vazquez had been a Portugal-based investment manager at Caixa Capital, the corporate venturing fund operated by financial services firm Caixa Geral de Depósitos, for more than three years from late 2015, and oversaw early-stage deals in smart energy and materials.
Momenta, a US-based venture capital firm, hired Michael Dolbec as managing partner. For more than 30 years, Dolbec has been an executive in institutional and CVC in Silicon Valley, most recently serving as executive managing director for GE Ventures, the corporate venturing unit of industrial conglomerate General Electric, since late 2012. Dolbec began his investment career with Kleiner Perkins Caufield & Byers and continued with Greylock. He went on to venture capital leadership roles at IBM, 3Com, Orange, and LG Electronics.
Momenta has made more 50 investments and recently closed its third digital industry fund, the AIoT Ecosystem Fund, at $50m with limited partners including Advantech, an industrial intelligence corporation.