UK-listed energy group Shell has set up a dedicated $1.4bn corporate venturing fund to invest in “innovative companies” working towards accelerating the energy transition.
Geert van de Wouw, managing director of Shell Ventures, said the fund would be deployed over the next six years to support startups and scale-ups.
“In line with Shell’s efforts to accelerate progress against our net-zero target, our investments will be laser-focused on renewable energy, storage and utilisation, mobility, transportation and logistics, circular economy and nature-based solutions,” van de Wouw wrote in a LinkedIn post in late 2021.
“As a company, we have invested and supported the startup ecosystem for decades. Our unique approach to venturing, with a focus on technology deployment, has enabled many of our portfolio companies to develop strategic relationships with Shell businesses.
“A win-win in my book, as Shell gets accelerated access to innovative technologies and business models, while our portfolio companies are able to achieve scale.”
The company set up its corporate venturing unit, then called Shell Technology Ventures, in 1997, initially to fund companies in the oil and gas industry. The team was relaunched under van de Wouw in 2012 and now has an active portfolio exceeding 90 companies.
Shell Ventures has preferred external investment over company incubation and building due to its “mixed results,” van de Wouw added. “We found it hard to attract and incentivise entrepreneurial talent within a corporate setting. The corporate governance around wholly-owned startups does the rest.
“However, we have been more successful with spinouts, [such as Cumulus Digital Systems and Ravin AI,] where we dilute to something around 30-40% after the incubation period, inject the [intellectual property] in the [new company and] attract external funding. The ability of the spinout to raise external funding is a testimony to the management team and the product.”
