Oil Giants Use Venture Capital Arms to Invest in Clean Tech Startups

In Shell Ventures, bp ventures, TotalEnergies Ventures, and Chevron Technology Ventures, we see a common naming scheme and a shared shift toward oil giants investing in clean energy tech startups. 

From TechCrunch

According to PitchBook, so far in 2021 there have been 1,177 venture capital deals globally in the energy sector, worth $89.4 billion. That’s up from $56.9 billion of deals in all of 2020, and we’re only three-fourths of the way through 2021.

BP, Shell, and TotalEnergies are now among the most active clean-tech investors by number of deals closed. And in February, Chevron committed $300 million to the Chevron Technology Ventures Future Energy Fund II, which is focused on low-carbon energy technologies.

With big climate goals from the oil majors, they’re upping investments in clean tech startups to help meet environmental targets. BP expects to invest up to $200 million a year, double what it has spent in some previous years, and Shell said the number of annual investments it makes had doubled since 2017 to around 20 to 25 deals a year, typically between $2 million and $5 million in size.

What are oil companies investing in? A wide range of tech startups in hydrogen, geothermal, solar, battery storage, electric vehicles, and much more. 

BP’s investments this year have included geothermal startup Eavor Technologies Inc., autonomous vehicle software company Oxbotica Ltd. and smart electric vehicle (EV) charging firm, IoTecha.

Shell has invested in EV charging technology, hydrogen-electric planes, and a logistics company that aims to prevent trucks running without goods—all of which could ultimately reduce demand for oil.

Chevron is investing in distributed power, carbon-free ammonia technology, and this year dove into offshore wind. 

TotalEnergies is working with startups in smart home technology, grid IoT innovation, EV charging networks, solar, and more.

The big oil companies are willing to throw money—small percentages of their annual operating budgets—at clean tech innovations. But for some startups, the prospect of an oil company becoming an investor poses a dilemma.

Chris Kemper, founder of Palmetto Clean Technology, said he had to work through pushback from employees before agreeing to allow Shell to invest last year. Palmetto team members asked him questions like, “Are we not worried about taking money from a fossil fuel company that in part majorly contributed to the very cause we’re trying to solve?” Kemper said he agreed to the deal after being reassured by Shell staffers about the company’s future plans.

Learn about and hear from the latest startups in clean tech (and so much more) at InnovateEnergy week, October 25-27, 2021, in Houston, TX (or virtually from anywhere). 

Hopefully oil see you there.