US-listed oil major Chevron has been rated by Global Corporate Venturing as having the most influential corporate venturing unit for the energy and natural resources sector for the second consecutive year after a series of deals reinforced the benefits of its long-term approach.
Focused on five areas, advanced materials, communications networking, emerging and alternative energy, information technology and oil and gas, and investing both directly and as a limited partner in venture capital funds, Chevron Technology Venture Investments has had one of its most productive years.
Chevron has sold four companies, listed one – with another due to float later this year – and backed two new companies. The exits have been SmartLogic to SchemaLogic, computer network storage device group BlueArc to Hitachi for $600m, Stingray Geophysical to TGS-NOPEC Geophysi-cal, and Nimbus to Tibco.
Chevron’s biofuels portfolio company, Solazyme, also took advantage of the open window for initial public offerings to list earlier this year while BrightSource has amended for the third time its regulatory filing but still plans to list this year, according to the last update.
Chevron has also developed strategic partnerships with a number of portfolio companies, including biofuels provider LS9 and solar power company Brightsource.
In late August, Brightsource and Chevron began making steam from the sunlight in California in order to heat crude oil and help in its refining. News provider Wall Street Journal said Brightsource had invested more than $40m with Chevron, at least $28m of it in developing the solar-powered steam project.
Chevron has been looking at portfolio companies that can help its core business of fossil fuels, and in July backed research by LS9 to produce specific pure hydrocarbon products from its biofuels platform.
Last year, Trond Unneland, managing executive of Chevron Technology Venture Investments, said: "We invest in companies whose technology has the potential to improve Chevron’s base business. That includes traditional energy, information technology and clean-tech companies. Obviously, the closer fit the technology has to our base business, the greater and more immediate impact it can have for us."
Unneland said its latest deal was part of a $5.75m round for Novophage, a start-up spun out of Massachusetts Institute of Tech-nology that uses phages (viruses) to kill bacteria. Reaping financial returns and maintaining strategic alignment with the parent company is a hard task but one that Chevron Technology Venture Investments has pulled off in the past year.
Fact box: Chevron Technology Venture Investments
Founded: 1999
Assets: >$250m, four funds
Portfolio: 29, including BlueArc, which Hitachi has agreed to buy for $600m
Key people: John McDonald, chief technology officer;
Desmond King, president Chevron Technology Ventures
Trond Unneland, managing executive
Mike Brooks, venture executive
John Hanten, venture executive
Don Riley, venture executive
Matthew McElhattan, principal
Richard Pardoe, principal