BP Plc - Investing in Clean Energies

Principles in Case study: 
Efficient energy systems
Contributing to economic development
Action taken by company: 

Through corporate venturing, BP invests in — and collaborates with — companies and funds that specialize in areas including energy efficiency and storage, bioenergy, carbon management, and renewable power. Since 2006, BP Ventures has committed more than $160 million across 30 companies, alongside 50 different partner companies and venture capital groups.

 

By partnering with growth-stage start-ups, the team — which operates out of the UK, the US, China and India —helps provide recipients with the finanical backing they need and accelerates the development of emerging technologies for BP.

 

The team scans around 1,000 businesses each year, evaluating the investment opportunities against two criteria – the strategic value to BP and the commercial potential. BP typically invests $1-5 million to secure a minority stake in the company and then help its partner with access to third-party capital through fundraising.

 

One example is BP’s investment in the INFUSE fund in India – a three-way partnership between government, industry and academia to drive innovation in the cleantech sector. Although this sector has witnessed solid growth in recent years, there remains a dearth of clean energy incubators. Clean energy technology and business development requires large amounts of mentoring and funding support, and this fund focuses on this niche area.

 

Learning: 

BP’s experience with the venture capital model has demonstrated that this is an effective way of providing access to new technology and new geographies that are strategically important to the company, as well as access to innovation and entrepreneurs.

 

The multi-company investment approach helps share the risks involved with early and growth stage start-ups. The partnership between smaller, nimble companies that can create the ‘spark’, and larger companies that can take that ‘spark’ and either deploy or encourage its deployment at scale.

Region: 
Global (all of the above)