Utility Corporate Venture Capital How Major

Transcript:Utility Corporate Venture Capital How Major:
Utility Corporate Venture Capital How Major Utilities are Using Corporate Venture Capital to Keep Up with the Energy Transition Amanda Welch February 7, 2023 Agenda Why do utilities invest in startups? Utility leaders in the energy transition often have a CVC or VC arm Source: BloombergNEF, research calls. Note: Corporate venture capital (CVC). Venture arms support innovation for net-zero and new business areas Presence of CVC arms in top 10 ranking utilities of BNEF’s utility business model transition score Source: BloombergNEF, PitchBook, research calls. Notes: Corporate venture capital (CVC). Data includes VC funds in which utility has a stake of over 50%. And this is growing in popularity as an innovation method Number of utility corporate venture capital arms by founding year and region, 1994-2021 Source: BloombergNEF, PitchBook, research calls, company websites. Note: CLP Ventures & Research fund size ranges from $100 million to $150 million. This data is as of Aug. 2022. Source: BloombergNEF, PitchBook. Notes: Includes corporate venture capital, venture capital and corporation investments. $3 billion in utility venture capital may be available globally today Number of startup investment deals by utility region, 2010 – 2022 Corporate venture capital fund sizes of select utilities, and utility regions Utility CVC strategies How utilities run venture arms Source: BloombergNEF. Investing as a limited partner in a venture capital fund (e.g., Xcel Energy’s investment into VC fund Energy Impact Partners) Establishing a corporate venture capital arm (e.g., EDF Pulse Ventures) Setting up an external VC fund (e.g., Fortum’s 85% share in VC fund Valo Ventures) Utilities invest in startups through three main channels Corporate venture capital is a tool in the utility innovation toolbox Select utility corporate venture capital team and portfolios sizes as of 1H 2022 Source: BloombergNEF, research calls. Note: Future Energy Ventures was set up in 2020 combining Innogy’s (which E.ON acquired) and E.ON’s already existing startup portfolios. Innogy’s venture capital arm was founded in 2010. Source: BloombergNEF, research calls. Note: Corporate venture capital (CVC), Internal rate of return (IRR), Multiple on invested capital (MOIC). Venture arms support strategic and financial benefits Partnerships Utility business impacts Portfolio performance Exposure Mergers & Acquisitions (M&A) Integration Current operations New business Net-zero goals Financial returns Number of pilots Number of commercial projects Revenue increase due to startup technology Number of new customers accessed by partnering with startup MOIC, IRR Emissions reduction due to startup technology Number of acquisitions enabled through CVC