Global oil and gas major Royal Dutch Shell Plc is bringing its seed and venture capital (VC) investment arms to India to back clean-tech, mobility and energy efficiency solutions startups. The oil behemoth is also launching its accelerator programme in the country.
Globally, Shell has been making seed investments in startups through its mentoring initiative ‘GameChanger’ for two decades. Launched in 1998, its VC arm Shell Technology Fund (STV) is arguably the first corporate venture fund in the oil and gas industry .
“Gamechanger and STV are available to startups in India but it all depends on the quality of the idea,” Yuri Sebregts, chief technology officer, Shell, told VCCircle, adding the initial engagements with Indian startups were encouraging. Sebregts, however, did not disclose the specifics, such as the timeline, ticket size and number of deals STV is looking to do in India.
“We don’t set a budget. It all depends on the idea and business opportunity,” he said.
Shell typically makes seed investments of around $200,000 in interesting ideas. “We worked with more than 5,000 innovators and helped 150 of them bring an idea to a real business,” Sebregts said.
As for VC deals, according to industry estimates, STV typically makes up to a dozen investments a year in the range of $2.5-10 million.
“It entirely depends on the particular need, programme and quality. There is no particular target,” he said. STV has made most of its investments in the US and Europe.
In December last year, STV participated in a $6-million Series A round in Kite Power Systems, a British renewable energy startup that harvests wind energy at altitudes of up to 450 metres, by using a sail comparable to kite-surfing. In September last year, it participated in a $15-million investment in Sense, a startup that makes home energy monitoring devices.
“We scan many hundreds of potential investment opportunities every year and engage with them in a multi-stage process,” said Sebregts. “We look at three areas: traditional oil and gas industry supporting technologies, renewables, and digital technologies that have some relation with the energy sector and mobility,” he added.
“At the seed-funding stage, we look at how disruptive the idea is—if it is really new and transformative. Because at that stage any investment is very high-risk. We look at whether this is a technology idea that can be tested for its robustness and maturity within a reasonable amount of time and an affordable level,” he said.
Shell’s venture investment arm is run by a team of 15 investment professionals. Apart from directly investing in startups, STV’s investment in China-based GRC SinoGreen Fund III last year was a step towards expanding venture investments in Asia. It invested in a number of other clean energy-focussed funds as well.
Sebregts added that Shell can forge partnerships with startups and help them connect with prospective clients from its global network. “We can partner in different ways tailored to the needs of the startup community,” he said.
Shell recently conducted an idea contest for Indian startups working in the area of clean-tech and renewable energy. The prize was a cash award of Rs 10 lakh and an entry to its accelerator event in Singapore. The company said 50 startups participated in the programme, and three would be chosen as finalists from the 10 startups that were shortlisted.
The company will run its accelerator programme in India out of the newly opened R&D centre in Bangalore, which is Shell’s third major global hub for technology and innovation.
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