Most outside of the energy industry are (pleasantly) surprised to learn how aggressively startups and CVCs are pushing decarbonization forward.

Decarbonization is a fascinating and incredibly important issue, so please join me on this short but special episode.

It's a great conversation, and I think you'll enjoy it.








Transcript
Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs.
I'm Tim Romero and thanks for joining me.
This is a short episode.
I wanted to share with you a panel discussion I moderated at the Global Corporate Venturing Asia Congress on the role that CVCs are playing in the green energy transition. It's an inside look at what some of the leaders in the field are thinking.
You'll hear from Sophia Nadur, the managing director of APAC and Middle East at BP Ventures. Nicole LeBlanc, partner at Woven Capital, and Jim Aota, chairman of Yamaha Motor Ventures.
You know, outside of the industry, a lot of people are surprised to learn just how active and supportive of startups global energy and transport companies can be and how they're working to push meaningful innovations into the marketplace.
So here are some quick insights into how some of the world's leading energy related companies are working with startups to green our power system and transition us all to a sustainable future. We talk about the specific kinds of startups we're looking to invest in, the different ways we have to support and work with startups and what we see is the most exciting energy startup trends for the next three to five years.
But you know, the panel tells that story much better than I can. So, let's get right to the interview.
 
Interview
Tim: Okay, thank you so much. I am really looking forward. We're going to be talking about how CVCs are supporting and fueling the growth of energy startups all over the world. And to start off, I'd like to do brief, brief introductions because there's four of us here. So I'm Tim Romero, I'm a partner at JERA Ventures. JERA is a Japanese electric utility. We generate about a third of Japan's electricity. We're investing in decarbonization, new business models and energy and looking for the best companies globally to bring to Japan. I also, for the last 10 years, have been running the Disrupting Japan podcast that talks about VCs and startups in Japan. And this is important because this is being recorded to release on the podcast. So, you are all part of the show.
Nicole: Hi everybody. Nicole LeBlace. I'm a partner with Woven Capital and longtime listener of Tim's podcast. So, we're the Growth Venture fund for Toyota. So, we look at growth stage companies typically that are able to work with Toyota across a number of different sectors. So energy that we're about to talk about here is certainly one, but also looking at supply chain automation. And if you think about mobility 3.0, connected cars, that sort of thing. Our team is mainly based here in Tokyo, including myself, but we also have people in the US and in the UK.
Sophia: Hi, I'm Sophia Nadur, MD for Asia Pacific and Middle East at BP Ventures. BP Ventures is a global energy company. I am delighted to have Masaki Kaison, who's the head of BP Japan with me, such as the importance that we are placing on looking for investments in Japan right now. We have $850 million assets under management. We invest $150 million at least every year from our balance sheet. We invest in series A, series B, potentially series C companies who are scaling up energy transition related offers, which could include battery storage, offshore wind, solar, hydrogen, mobility, even retail and convenience. Even these areas are of interest to us and we are actively looking to invest in in Japan. We have two, nearly three investments in India, two in China, and two in Australia. Just in this region alone.
Jim: Right. So, my name is Jim Aota and I am the chairman of the Yamaha Model Ventures, but it's the same as the cause of the Sony Ventures. Talking about, I have a double hat. So one is the Sony one of the Yamaha Motor Corporation of the new Business development head. And also I'm taking care of the Yamaha Motor Ventures chairman's positions. Typically it's a Yamaha Motor Village as chairman's position is taking care of the investment committee, which is a Yamaha Motor Ventures in the Silicon Valley is taking care of it. Lots of the sourcing activity, decision making processes. So we got a setting up for the IC from the LPs point of view, it's a one LP, one GP structure, we have it. And currently we are running the 300 million commitment fund in the United States, which is going to be one fund for the startup side. And the second is a 401 and I got to have the separate fund, which is focused on to the sustainability side. So, the three fund is side by side structures and we got to going to focus on, but the typically it's compared with the size of the Toyota or VPs. My investment theme is a little bit narrower, so I don't know how much can contribute for the energy sector's conversation here, but we'll try.
Tim: I think you can contribute quite a bit from our earlier discussions, but one point I want to kick us off on. So, traditionally energy startups have been very capital intensive. It's taken a long time to bring them to an exit. So, it's been an area that CVCs have been playing an active role in. But if you follow GCV research, as I'm sure we all do here, we know that just very recently CVCs are no longer providing the majority of investment capital to energy startups that institutional financial VCs have now taken the lead. So, I want to your thoughts on what is the best role that CVCs can play here? What is the unique value that we add within this ecosystem? And Sophia, I know you've spent a lot of time thinking and working on this, so what are your thoughts here?
Sophia: I think if you think about the infrastructure institutional investors, the banks, the financial institutions, they don't want to take any technology risk. They're okay even with a bit of business model risk. But the value that we bring as folks here in this room and many people here is that we can help the companies very early stage overcome some of the technology hurdles using maybe some of the resources within our own company to be able to run pilots and POCs and programs to help ensure that the product service has market fit and then also to overcome business model innovation challenges. And that's still a service that we offer and that's what I think why VCs and CVCs will have an enduring role to play as this energy transition progresses irrespective of how, let's say infra heavy this particular part of the transition will be.
Tim: So, is BP pretty hands-on in that respect? Do you actually like pull engineers out of the field and work with the startups and that kind of thing?
Sophia: That's a good question. So we invested in a geothermal company a few years ago in Canada. And you might think geothermal is essentially looking at underground heating and then basically pulling that heating to heat homes and businesses above ground. But to get that, you need to drill wells four and a half kilometers below the surface of the earth. To do that it might be useful to have drilling engineering experience. And that's what we found in terms of the real value that BP has offered to this startup. And now this startup has drilled well four and a half kilometers below the surface of the earth in Bavaria in Germany. And a lot of that support and expertise have come from within BP and that helps accelerate the scale up of this young company.
Tim: Fantastic. Jim, what are your thoughts?
Jim: Probably a little bit different point of view what Sophia is talking about. So for example, Yamaha Motor, we established the company's a 1955 and that is a spin of venture of the Yamaha music. So, we have the music business, but suddenly the top management team decided we got to make motorcycle. So, it's kind of the startup mindset. We started back in 1955 and believe it or not, my city is called as Hamamatsu city. You can take the Shinkansen from here, it's 1.5 hours away from here. We got to have over 80 plus motorcycle company in town. So, it's kind of the expansion of the venture time in that city. And now you can imagine for the Japanese motorcycle company, Honda, Yamaha, Suzuki, Kawasaki, we totally going over for the consolidation phase and we got to making the company as very quality, high quality recognition from the customer side. So, from the company who is building up startup now, probably what we can help is how we can make the company better from the larger corporation point of view. So, we have some history and we got to do something on this so we can tell something to the startup company. So, that is the things we can help them to raising their bar or maybe getting into the market much higher space. But other than that, very difficult like Sophia can tell more about what's kind of your energy transitions. But my job is the people who has a passion, they want to change the world and how we can help. I think that's the only point I can do this in a CVC point of view.
Tim: Well, I think Yamaha's in a really interesting position and a lot of people forget that companies like Yamaha and Honda were incredibly disruptive in the fifties and sixties. It was just redefined what a motorcycle was and in the ensuing decades have built up an incredible engineering expertise. So is it really, when you say increasing quality, is it that engineering that suitability for market? What aspect do the startups find most valuable?
Jim: I think it's a large manufacturing corporation always compelling with the startup and myself and they are not, we are better and it really true actually. But from the day one, you don't need this kind of level things. You have to kind of step one, step two,