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Energy companies aren’t the main investors in energy startups anymore

Reports - Wind farm

It might seem obvious that an energy startup looking for investment might tap up funding from a utility company or an oil major. But corporate investment in emerging energy businesses now is just as likely to be provided by a tech company or a transport operator.

In fact, half of all of the energy startups that raised money from corporate backers this year got that funding in rounds featuring non-energy companies only, according to GCV data.

Only a quarter of energy sector startup funding rounds had money only from energy sector corporate investors, and another quarter raised money from both energy and non-energy CVCs.

The tech industry has been increasing its backing of energy startup as growing use of generative AI makes finding new energy sources more urgent.

According to a recent report by the International Energy Agency, electricity consumption from data centres, AI and the cryptocurrency sector could double by 2026. These activities made up around 2% of global electricity demand in 2022, consuming an estimated 460 terawatt-hours (TWh). By 2026 that could rise to more than 1,000 TWh, roughly equivalent to the electricity consumption of Japan.

It is little wonder, then, that big tech companies like Microsoft, Google and Amazon are investing in nuclear power. Amazon and Google both recently announced plans to invest in small modular nuclear reactors, Amazon taking a stake in X-energy while Google has teamed up with Kairos Power. Microsoft, meanwhile, is in talks to start buying electricity from the formerly shuttered Three Mile Island nuclear facility.

But nuclear is not the only option they are looking at. Amazon also backed Germany-based electrolyser maker Sunfire, which raised €210m ($233m) in a series D funding round earlier this year. Sunfire develops industrial electrolysers designed to convert renewable electrical energy into renewable hydrogen. The funds will go towards setting up the company’s first factory.

Google purchased a stake in New Green Power, a Taiwanese solar power company, and Google Ventures led a $40m series C funding round for Dandelion Energy, a geothermal company.

Software and networks company Cisco, meanwhile, recently invested in CorPower Ocean, a Swedish company that is looking to turn wave power into an energy source.

While their energy needs rise, tech companies are under pressure to reduce their carbon emissions in order to meet UN Sustainable Development goals. They have established sizeable climate-focused funds, which are also making investments in the energy sector.

● In 2020, Microsoft established its Climate Innovation Fund with a $1bn commitment, targeting underfunded climate tech solutions across carbon capture, water conservation, waste management, and ecosystem health.

● Also in 2020, Amazon upped the ante and committed $2bn to its Climate Pledge Fund to advance innovations in climate tech seeking to reduce carbon emissions across logistics, construction and data centre operations.

● In 2021, electronics manufacturer Apple, launched a $200m Restore Fund, which seeks to invest in forest restoration projects, aiming to remove CO₂ from the atmosphere while generating a return on investment.

Recent tech sector investments in decarbonisation startups include cloud and IT services company Hewlett Packard Enterprise backing the $52m series B round of French emission tracker developer Greenly, and Alphabet taking part in the $50m series B round raised by its spinout 280 Earth, a developer of direct-air-capture CO2 removal technology.

Transport sector

Transport companies, too, are investing into energy startups that promise more sustainable fuel options. United Airlines set up the UAV Sustainable Flight fund in February 2023, to invest in sustainable aviation fuels, pulling in a number of other investors, including American Express, Bank of America, Boston Consulting Group, Groupe ADP, Hawaiian Airlines, JetBlue Ventures, Air Canada, Boeing, GE Aerospace, JPMorgan Chase, Saudi Aramco and Honeywell.

Both United Airlines and Amazon were investors in the $245.7m series B round raised by Denver-based geologic hydrogen company Koloma. Koloma is developing technology to extract hydrogen from underground deposits.

Alaska Airlines’ investment arm, meanwhile, was one of the backers of the $200m series C funding round for Twelve, a US-based startup that turns CO2 into sustainable aviation fuel.

It is not just the aviation industry investing in energy. Automaker Stellantis, meanwhile, purchased a 49.5% stake in Argentina-based solar power producer 360 Energy Solar for $100m. The move was part of Stellantis’ strategy to increase energy self-sufficiency in its operations. The partnership will focus on the development of new solar plants, the installation of large-scale solar storage systems and the production of hydrogen energy.

Japanese car company Toyota, meanwhile, invested in the seed round of Oxylus Energy, a US startup turning carbon dioxide into methanol, a liquid fuel.

On the shipping side, Mitsui O.S.K Lines, one of the largest shipping companies in the world, took part in the $87m series H round raised by US-based battery maker 24M, which is rethinking the manufacturing process of batteries.

French shipping and logistics company CMA CGM, through its PULSE – CMA CGM Energy Fund, backed the series D round of Ascend Elements, which raised $704m in total. Ascend makes sustainable, engineered battery materials for electric vehicles. Japan Post also backed energy wholesale trading marketplace Enachain’s $38.2m series B round, which also featured several energy utility investors.


Investors steer different course on greener shipping fuels

Reports - Shipping needs greener fuels

As international net zero regulations begin to bite, shipping companies are coming under increasing pressure to decarbonise. Finding alternatives to oil-derived fuels will be crucial, but investors in the industry have vastly different approaches for how to tackle the issue.

Danish shipping company AP Moller – Maersk has focused a large part of its corporate investment efforts on alternative fuels. It has set its sights on using methanol-based fuel, and in 2021 purchased eight ships with engines capable of running on it.

“Maersk’s position has been that methanol is a key fuel for the future,” says Alex Smout, investment director of Maersk Growth, its CVC arm. “The benefit is that it can be made through a number of different pathways. And it can be burnt in fairly similar combustion engines to the ones that we use today as well as in higher efficiency fuel cells of the future.”

“At Maersk Growth, a lot of our investment activity has been based on funding the delivery of that future with methanol. But at the same time our role is to look ahead to other fuels, pathways, and new technologies on the horizon such as batteries and nuclear.”

In July 2023, the CVC took part in the $10m series B funding round for WasteFuel, a US startup that tries to convert ordinary household waste into green methanol. It has also backed C1 Green Chemicals, a company with its own technology for producing green methanol which it says can be scaled in a cost-effective way.

Shipping accounts for around 3% of global greenhouse gas emissions and regulations on the sector are being tightened. From January this year, for example, all large ships in EU ports have been covered by the EU’s Emissions Trading System (ETS), which caps a company’s allowable carbon dioxide emissions. The International Maritime Organisation (IMO) is expected to release new recommendations for binding global regulations on shipping emissions in April next year.

Fueling choice

Finding an alternative shipping fuel is therefore crucial, but methanol is not the only candidate. Ammonia and hydrogen are also potential options. All three have their own drawbacks and benefits.

MOL Plus, the CVC arm of Mitsui O.S.K. Lines, a Japanese shipping company, has invested in Amogy, which is focused on developing renewable fuel out of ammonia. Neither Maersk Growth nor MOL Plus have invested in hydrogen fuel startups, but some innovation is being driven within the Belgian shipping company CMB, which began piloting hydrogen engines on small vessels in 2020 that were developed by its R&D branch, CMB.Tech.

Smout says Maersk Growth is focusing on methanol because it’s a nearer-term solution than ammonia.

“[Methanol-based maritime fuel] is maybe five years ahead of ammonia, in terms of getting it working on ships, if not more,” he says.

But he concedes that there is an “idealist” argument for using ammonia because its production doesn’t require carbon, so it is outside the carbon cycle. Also, capturing carbon to produce methanol is often expensive and requires intensive engineering, whereas ammonia is made out of the more abundant nitrogen and hydrogen elements, making production less restrictive.

At the same time, both MOL Plus and Maersk Growth are hedging their bets and investing in other power options, such as batteries. MOL Plus counts Fleetzero, a marine battery maker for hybridising ships, and Everimpact, which makes emissions tracking technology, among its portfolio companies.

Maersk Growth has invested in adjacent startups such as Altris, which is making a sodium-ion battery out of sustainable materials. It has also backed more experimental approaches , including Prometheus and Aircela, two US startups that are turning carbon dioxide captured from the atmosphere into fuel.

Fuel sceptics

Other shipping lines are more sceptical about the wisdom of investing in alternative fuel startups. IMC is a Singaporean international shipping company. Its CVC unit, IMC Ventures, also has a mandate to target decarbonisation startups, but Axel Tan, venture partner at the CVC, is focusing on investments that improve efficiency.

There is no clear winner in terms of fuel alternatives, says Tan, and it is not a problem that can be solved through startup investment.

“Fuels present a chicken and egg problem [for shipping companies]”

Axel Tan, IMC Ventures

“Fuels present a chicken and egg problem [for shipping companies],” Tan says. “If the infrastructure is not there [to supply ships] then there is no need to adopt the fuels.”

He thinks that the adoption of new fuels will come as a result of governments putting incentives in place and working closely with the corporates.

But efficiency is something startups can address. One of IMC Ventures’ portfolio companies is Sea Machine Robotics, a US startup making autonomous, AI-assisted systems that help vessels reduce fuel consumption. Another, Swat Mobility, uses AI to plan more efficient sailing routes.

Geert van de Wouw, a climate tech investor and former CEO of Shell Ventures, is also sceptical of any startup being able to develop an alternative maritime fuel. It will need large energy companies which have deep enough pockets.

“The amount of investment [that will be] needed to get a renewable fuel for maritime use is staggering. We’re talking multi-billion-dollar investments,” he says.

“There’s clearly a future for startups that are developing new pathways to achieving, for example, biomethane,” he says. “But eventually the capital that will have to be put into plants [to produce the fuels at scale] will not come from startups, because it’s too capital intensive. It will be covered by developers and energy companies.”

But Van de Wouw does admit there can be a role for “visionary” maritime companies that might “consider investing upstream in fuel production.”

Smout thinks this is precisely the advantage a CVC can bring.

“Most climate tech startups need well-aligned partners and supporters,” he says. “[So that they can] get infrastructure built, sign offtake agreements, get feedstock. There are a lot of partnerships required to build a successful climate company.”

“I think strategic investors that can help support the business are a necessary partner for them to grow and achieve scale.”

Smout also believes that it could pay off for Maersk to get there ahead of the competition.

“It’s always difficult to predict what’s going to happen over a 15-year horizon,” he says. “But I think it’s a transition all [shipping companies] will have to make, so if we can be a first mover in that space, hopefully we can build an advantage.”


Future Energy Ventures finds opportunities amid solar and EV “disaster"
Future Energy Ventures team photo
The Future Energy Ventures team

“Solar is a disaster and the EV market is struggling,” says Jan Lozek, managing director of corporate-backed VC firm Future Energy Ventures (FEV), which invests in startups that can help bring about the energy transition.

Germany, where FEV is headquartered, has been among the most fervent installers of solar energy in recent years, to the point where it is now a larger part of the grid than fossil fuels. But that has led to grid instability, as sunny days produce more energy than there is demand for, sending prices tumbling. At the same time, international conflicts and job insecurity are superseding climate change in the minds of consumers across Europe, making them less willing to pay for clean energy systems.

Although electric vehicles (EVs) are making up a larger proportion of new car sales, overall sales in both the US and Europe have not hit the heights expected by many.

Headshot of Jan Lozek
Jan Lozek, managing director, Future Energy Ventures

“There are a lot of challenges overall in our markets,” says Lozek. But all of this can be turned into an opportunity for venture capital investors, he says. The more crises there are, the more room there is for startups with the technology to solve them.

“What is interesting is that we are seeing a decent number of deals on the early-stage development side. And we have seen a lot of challenges from the huge buildup of EVs in the last few years, and also in renewable energy, so there are a lot of topics and a lot of problems to be solved.”

FEV began life as the corporate venturing arm of German electric utility RWE, which was subsequently bought by competitor E.on. The unit spun out of E.on in 2022 but retains it as a backer, and Lozek believes FEV’s strong roots in the energy sector give it a sense of what technologies are needed to solve the acute problems in the industry.

More specifically, the technologies are often digital-first. Recent FEV investments include Piclo, developer of a decentralised energy marketplace, and Reev, which automates EV charging.

“We are seeing a lot of opportunities, especially on the early-stage side,” Lozek says. “And with that market situation, it means pricing is also quite attractive.”

In addition, while growth rates for a lot of startups may have slowed from the expectations set during the recent boom years, many startups in the energy sector are still growing.

“The kinds of companies we have invested in in the past are growing decently even in the current market environment. If you took a look at the top 10 companies from our first fund, business growth, pessimistically, is 50% and optimistically it is 75%,” Lozek says.

“There is growth. Maybe it’s just that we’ve gone from fantastic and great to just normal growth. So, we shouldn’t complain, it’s just that the market was expecting more, so we then feel like it’s a disaster.”

Charging an EV
Photo courtesy of FEV portfolio company EV.Energy.

Lack of exits is making the fundraising environment challenging

VC firms have found it difficult to raise new funding in the current climate. FEV, too, has taken longer than hoped to raise cash for its second fund. It received a €40m commitment E.on, two years ago and started making the first investments. But the fund is still some way off its original €250m ($264m) target.

Lozek however says the finishing line is now in sight.

“By the end of November, we will be above €160m for the fund,” he says. “So, we are definitely near where we want it to be by the end of this year.”

Fundraising has been challenging, Lozek adds, partly due to an exit market which remains stagnant for startups in general, particularly on the public markets side.

Lozek says the fund’s limited partners include CLP, an energy utility and infrastructure manager with assets across China, India and Australia, as well as Austrian electricity utility Energie AG, the European Union-owned European Investment Fund, and a couple of family office investors. FEV is in talks with some additional backers as it looks to reach a final close.

“We are currently closing with two more institutional investors – public and private-side banks – and two more strategic investors from Turkey with a global portfolio of different assets, which are adjacent to or part of the energy transition,” he says. “We are [also] focusing on more institutional investors and maybe one or two more strategic partners.

“We still have some room for investors, but it felt quite difficult to get to a decent amount of additional capital, more difficult than in 2023,” he says. “We wanted to exit more companies than what we have achieved right now. That’s mainly due to the fact there’s less of a market for takeovers, fewer trade sales, less IPO opportunity. So, that’s not nice.”

But having a fund at all, Lozek says, will put the firm in a very strong position in the current market.

“It’s great because we are on the buy side, so there is a lot of opportunity, a lot of things. And we feel like, with the current market situation, it’s a great vintage and we are benefiting from our investments. We feel privileged to be able to invest into the market.”


A new US president and the data centre boom will boost the energy sector in 2025

Reports - New US President & data centre boom

The incoming US presidential administration and the power needs of data centres are set to give a hefty push to the energy tech sector in 2025 according to some prominent corporate investors. Some technologies, such as batteries, heat pumps and hydrogen may suffer, however, if the subsidies that have sustained them are cut.

“We think that energy will see a huge gain from the next administration, just based on deregulation,” says Pete Bastien, the US-based president of Hitachi’s corporate venture arm.

Although the Trump administration is yet to come into power, the signs are that it favours an ‘all of the above’ approach to energy that will boost investment in several areas at once. Part of the reason for that is the new administration’s favourable views on power-hungry areas like artificial intelligence and cryptocurrency.

“If you just look at the stated positions of the incoming administration in the US, I think it’s clear that AI is going to be front and centre,” says Pradeep Tagare, head of investments for energy utility National Grid’s CVC subsidiary.

“Crypto meanwhile is increasingly looking to be front and centre, and both of those are going to create huge energy demands. So, anything that supplies from an energy perspective, that can address that increased demand is obviously going to be a huge winner.”

But ‘all of the above’ may not actually mean all of the above. Both Bastien and Tagare believe areas like electric vehicles (EVs) and batteries, hydrogen and heat pumps will be vulnerable due to a comparative reliance on subsidies.

All of them were recipients of subsidies and incentives in President Biden’s Inflation Reduction Act two years ago – a bill Trump has threatened to repeal. He has also claimed he wants to kill offshore wind energy development “on day one” of his administration. But the new government could be good news for another low-emission power source: nuclear.

“Oil and gas will maybe see the major boost, but I think fission will get lifted up and especially small reactors, because Trump has actually mentioned in a few interviews that he thinks nuclear is a viable way to generate electricity and the regulations are way too strict,” says Bastien. “But he also thinks the large reactors are too complex and have many cost overruns, so he wants to see something different.

“This is just talk. But we think that talk can lead to interest in the market. At a high level, that’s basically what we see right now.”

The data centre boom will drive funding for energy generation

2024 has put energy front and centre in the overall technology space because of the energy requirements of AI data centres,” says Tagare. “As AI sort of grew exponentially, the attention around energy for data centres grew similarly.

“There is going to be a renewed interest in figuring out how to solve that problem. And that is going to create a bunch of interesting investment opportunities, both directly related to energy and on the compute side that can lower energy demands.”

“The question is, especially with the data centre demand, does fossil fuel play a role there or not?”

Pradeep Tagare, National Grid Partners

That kind of activity can already be seen at the startup level. Just last month, a startup called Crusoe raised $600m from investors including AI chipmaker Nvidia to finance development of data centres powered by gas which would otherwise be flared off. A Swiss startup, Deep Atomic, is less than six months old but is working on a small modular reactor (SMR) designed to power data centres.

The demand is there too. Amazon and Google signed the first ever power purchase agreements with SMR developers in October, specifically to serve their data centres.

“The question is, especially with the data centre demand, does fossil fuel play a role there or not?” says Tagare. “That is the big question. If it starts to play a bigger role in the short term, I think you’re going to see a lot of investment go into that sector.”

Grid technology is hot – and a lot of it is going to be AI

The increase in demand for energy, coupled with projected growth for onshore renewables projects, is also going to put a lot of strain on electricity grids. Grids were originally designed around central generation but, with more and more decentralised sources like renewables coming online, the distribution system needs to be changed to orchestrate it all.

The problem is that grid hardware can’t be replaced cheaply or easily, so startups that can increase capacity in other ways will be in demand. That means software, and in particular AI is going to come into play – “AI to solve the AI problem,” as Tagare puts it.

National Grid Partners (NGP) is already exploring that area, with startups like LineVision, which uses lidar technology to monitor grid and weather conditions to calculate how much energy can be transmitted, and which can expand capacity by 20% to 30% without requiring new infrastructure to be built. Investments in the past six months include TS Conductor, developer of a new type of conductor material that can increase capacity by up to two or three times, and Urbint, which uses AI to automate safety monitoring for the grid.

For a firm like Future Energy Ventures (FEV), which began life inside Germany-headquartered energy utility E.on before being spun off with corporate backing, the shift to software and digital tools is welcome.

“We believe digital tools and the current environment are the most effective tool to decarbonise the sector,” says managing director Jan Lozek. “And they are largely financially viable. That’s why it makes a lot of sense to focus on that type of asset class in the venture capital space right now.”

The majority of FEV’s portfolio uses AI and Lozek says it is a “great opportunity” for climate tech. Decentralised energy infrastructure like heat pumps, solar panels and electric cars are only going to become more important, and AI is going to be needed to quickly and proactively solve problems in this more complex grid.

Corporates are still willing to spend on edge tech – but nuclear could outpace hydrogen

While digital energy technology is set to see considerable growth in 2025, the need for baseload energy and the urgent need for decarbonisation means hardware cannot be ignored. In terms of energy generation, the two recent breakthrough areas have been in hydrogen and innovative nuclear technology. The latter in particular looks set for continued growth.

“We think that there are lots of tailwinds, mostly in the US but maybe internationally as well, for these smaller reactors, especially with data centres becoming more intensive going forward,” says Bastien. Fusion also saw an uptick in funding activity, he adds, but that’s still considered the energy source that will come after the next one.

“The next administration will have whatever rules they want, but the corporates themselves have longer-term goals for decarbonisation.”

Pete Bastien, Hitachi Ventures

While small modular fission reactors look promising in the shorter term, investors also have an eye on nuclear fusion technology. The familiar joke is that it’s one of those technologies that is always 15 years away, but there were several breakthroughs in labs last year, and that number may finally be set to drop. As far as startups go, Zap Energy and Tokamak both closed nine-figure rounds in the second half of 2024, following in the footsteps of the likes of Commonwealth Fusion and Helion.

“The initial signs are very promising,” says Tagare. “Is that going to happen in the next five years at scale? Obviously not. But it’s very exciting because it’s getting to the point where we can say that it’s feasible. I don’t know that anyone is going to put a number on it – five years, seven years, 10 years, whatever. But it increasingly looks feasible.”

Hydrogen is a trickier case. Lozek compares it to offshore wind, which is producing energy but which needed partnerships between governments and large utilities to truly emerge. For Tagare, the sector’s dependence on subsidies to finance development and deployment of the projects are what makes it vulnerable, especially in the US.

“The technologies that are used, especially around things like green hydrogen for example, are first-of-a-kind projects. And so, the cost curve for those projects is not yet at a point where it can be sustainable as an independent entity. So, they have to depend on subsidies,” he says.

“If these subsidies are not there, then they are not cost competitive, and if they’re not cost competitive, the market is not going to accept it. It’s that simple.”

There is a general agreement, however, that new technologies are going to be needed, both to meet projected energy demands and to meet decarbonisation targets. Lozek believes the industry is going to need new asset and hardware technology from 2030 at the latest in order to complement the advances that have been made with digital technologies. But, from carbon capture and hydrogen to nuclear, batteries and geothermal, corporate investors have been willing to invest in the future, and that seems likely to continue.

“The next administration will have whatever rules they want, but the corporates themselves have longer-term goals for decarbonisation, and I think that their shareholders are on board with it. So, I think the corporations will drive a lot of this, regardless of what regulations there are,” Bastien says.

“I think there is enough interest because if it works, the markets are huge,” Tagare adds. “So, people are still willing to bet on the technologies, they are willing to bet on teams and they are willing to bet that the markets will need this at a point in time. And I think there’s enough interest that you will continue to see funding.”


Decline in oil and gas-backed rounds continued in 2024

Silhouette of man looking at sunrise

The dollar value of startup funding rounds backed by oil and gas corporates fell by $1.5bn in 2024, their lowest level since 2020, continuing the decline seen since the apparent peak in 2022. Amid the falling level of investment, the industry is seeing a rapidly shifting landscape.

The new US administration is expected to usher in a raft of deregulation that will boost fossil fuel supply and may encourage a shift away from renewables in the US. At the same time, demand for oil is damped by the slowdown in the Chinese economy, while profits for LNG businesses might increase, as prices stabilise. The picture for green investment is no simpler. The ultimate trend towards a fossil fuel phase out is likely to remain, but oil and gas corporates in the group analysed in this report have differing attitudes to their sustainability strategies.

Climate tech was the standout sector for corporate venture investment this year. It was the only one that grew in terms of investment volume from 2023, with the others either falling or staying the same.

Some of the largest funding rounds of Q4 2024 were in nuclear energy startups and carbon capture and storage technology. The slowdown was most pronounced in the latter half of the year, with Q3 and Q4 each registering fewer than 40 deals. But the annual drop in investment value is far less steep than that between 2022 and 2023 ($3.4bn), suggesting the decline may be slowing.

Here, we break down what the year’s figures show for the sector.

Sub-sector analysis

Cleantech was the only subsector that attracted more corporate-backed funding rounds than in 2023, with deal volume rising 7%. This suggests that the pressure to diversify in the face of climate change targets remains a strong influence.

Investment in core oil and gas technology remained flat against 2023, although the deal volume was already very low. At just five rounds, it is no longer a major focus for CVC innovation.

Oil and gas company investments in IT-related startups fell 8%. This is in contrast to the CVC sector as a whole, which increased investments in this sector by 12%, driven by the rush to invest in AI. High valuations or AI startups may be making oil and gas companies more reluctant to invest.

Mobility startups saw the biggest fall in numbers. Startup funding rounds fell by 17% from the previous year. The end of 2024 saw a string of bad headlines for the EV sector. The closure of battery maker Northvolt signalled a weakness in the European market, which was echoed by the poor performance of Volkswagen that had been struggling with its pivot to EVs.

The median value of the funding rounds backed by oil and gas corporates was $25.7m in 2024, which is 17% higher than in 2023 ($22m). Both 2024 and 2023 figures may have been distorted by a handful of large deals but, overall, the 2024 level is still comparable with the pre-pandemic 2019-20 levels.

Oil and gas sector companies can vary greatly in the types of startups they back.

Shell, Chevron and Equinor have been taking the lead in cleantech investments since 2014; Saudi Aramco and Chevron lead on investments in IT technologies; and Shell and BP have had most investments in transport and mobility startups.

 

Over the years, oil and gas corporate venture investors have steadily shifted their focus toward non-core areas, notably IT, cleantech, transport and mobility. These non-core sectors hold the greatest disruptive potential for energy companies, which must navigate the eventual phaseout of fossil fuels in a global push to combat climate change. The rise of electric vehicles threatens to reshape their customer base, though the pace of this shift remains uncertain.

Industrial activities are undergoing rapid digitisation, significantly boosting production and efficiency. Ongoing developments in AI, edge computing and emerging quantum computing technologies have accelerated this momentum, which seems set to continue.

Energy storage powers on

Carbon capture, energy storage and hydrogen tech accounted for most of the cleantech funding rounds backed by oil and gas companies in 2024.

In the transport and mobility space, automotive technology (especially related to electric vehicles), logistics and various mobility-related services were the most popular investments in 2024.

Much like most of last year, futures contracts indicate that markets generally anticipate the WTI price to average within the $60 to $80 range, though with broad confidence intervals ranging from $40 to $120.

The latest US Energy Information Agency (EIA) Short Term Energy Outlook report (from early January 2025) expects the Brent benchmark to average $74 per barrel in 2025, 8% lower than in 2024. It is expected that global oil production will grow more than global oil demand. The EIA has also revised its previous forecasts on natural gas prices and now expects them to rise over the next two years, averaging $3.10/MMBtu (million British thermal units) in 2025 and $4.00 in 2026. This is up from a historically low average of $2.20 registered in 2024. The forecast has much to do with rising global demand outpacing production growth.


Deals

Oil and gas majors Chevron, Shell, Petronas and BP were investors in the largest funding rounds by dollar size in the final quarter of 2024. The largest funding rounds were for startups in a wide variety of areas, from carbon capture and hydrogen tech through nuclear power to logistics solutions and plant-based foods.

Heirloom

Australia-based Heirloom, raised $150m in its series B funding round, which it intends to use to bring the cost of its technology down and to fund other projects. The round was co-led by Future Positive and Lowercarbon Capital and also featured industrial conglomerates Siemens, Mitsubishi Corporation (Americas), Mitsui & Co and Japan Airlines, among others.

Zap Energy

US-based fusion energy developer Zap Energy closed $130m in its series D round, marking significant steps toward a commercial fusion power plant. The round was led by Soros Fund Management and featured, among others, Chevron Technology Ventures and Shell Ventures, the venturing arms of oil majors Chevron and Shell, respectively. Zap’s power plant, dubbed Century, claims to be one of the largest tests of a plasma-facing liquid metal blanket to date. The new funding will be used to continue parallel development of both plasma R&D and systems-level plant engineering and integration.

Tractian

US-based manufacturing AI tech developer Tractian secured $120m in a series C funding round, which was led by Sapphire Ventures, with participation from Siemens’s Next47 venturing arm, and Nokia’s NGP Capital, as well as General Catalyst. The company builds streamlined hardware-software tools to give maintenance technicians and industrial decision-makers oversight of their operations. It intends to use the funds to expand operations and its development effort.

Radiant Industries

US-based advanced nuclear tech developer Radiant Industries received $100m in its series C funding round led by DCVC. The round featured Chevron Technology Ventures, as well as a16z’s American Dynamism and Union Square Ventures, among others. Radiant’s Kaleidos microreactor is a 1MW nuclear power plant in a box that replaces diesel generators, providing power for military installations, remote industry, data centres, EV charging and more. The round brought the company’s total funding to $160m raised to date.

Becis

Singapore-based BE C&I Solutions Holding (Becis) raised $53m in equity financing from existing shareholders, including Siemens. Becis specialises in decarbonisation solutions, including solar, bioenergy and a rapidly expanding portfolio mainly in cooling and heating services. The new equity funding, coupled with the recent completion of debt funding rounds, will enhance the company’s growth strategy, enabling the company to strengthen and expand its premier EaaS platform as the trusted partner for large multinational corporations with sustainability and decarbonisation goals.

Koloma

Japan-based energy and utility company Osaka Gas invested in US-based hydrogen tech developer Koloma’s $50m series B round. Koloma is engaged in the exploration, development and production of natural hydrogen. Natural hydrogen is found in natural deposits several hundred metres to several kilometres underground. It is a new resource tapped mainly in the US and Australia in recent years. While natural hydrogen can be extracted using established oil and natural gas drilling technology, greenhouse gas emissions during production are expected to be small.

One Rail

US-based delivery logistics provider OneRail raised $42m in a series C round, which was led by Aliment Capital and also featured Petrona’s venturing arm Piva Capital. OneRail intends to use the funds to enhance its software as a service (SaaS) platform, OmniPoint®, expanding capabilities that enable dynamic fulfillment and a seamless unified commerce experience for consumers.

OQ Technology

Luxembourg-based satellite 5G communications provider OQ Technology secured a convertible loan investment as part of its $32m Series B round, which was backed by Waed Ventures, a venture capital arm of Saudi Aramco and Phaistos Investment Fund from Greece. The loan came from the newly-established Luxembourg Space Sector Development fund, co-led by SES S.A. and the Luxembourg government. The investment will help OQ Technology to accelerate its commercial operations globally, expand its licensed spectrum market access and convert its existing pipeline into paying customers. OQ Technology already has commercial partnerships with customers such as Aramco, Telefonica, Deutsche Telekom, Transatel and others. The company deployed the first batch of its satellites in 2019 and is looking to expand its satellite constellation.

Plantible Foods

US-based protein maker Plantible Foods closed a $30m series B round, co-led by Petronas’ Piva Capital and Siddhi Capital, with participation from new investors Betagro Ventures, Cultivate Next (the venture arm of Chipotle Mexican Grill), Nourish Ventures (the venture arm of Griffith Foods) and existing investor Astanor Ventures. Plantible Foods is a business-to-business food technology company, which aims to develop the most functional and applicable plant-based protein in the world
by harnessing nutrient-dense plant genus Lemna.

Oxford Flow

K-based valve and regulator tech developer Oxford Flow secured a £20m ($25m) investment in a series C funding round co-led by BP Ventures and Energy Impact Partners. The company’s valves eliminate traditional mechanical components such as drive trains, stems and diaphragms, addressing common failure points and leak paths. The funding will expand Oxford Flow’s operations and support its work to cut fugitive emissions and improve valve reliability in the energy sector.

Cool Planet Technologies

Germany-based carbon capture company Cool Planet Technologies successfully raised $24.7m in a series A2 funding round, which was led by Taranis Carbon Ventures and featured oil and gas company Eni’s Next venturing arm. The investment has been provided by industrial investors, validating the appeal of its low-cost membrane-based solution. It also included other corporate investors, including BlueScopeX and NEVA SGR (the Intesa Sanpaolo Group’s venture capital unit). This funding will help the company to complete the demonstration of its technology at scale, while accelerating commercial deployment, including the construction of a membrane manufacturing facility.


Funds

We only saw two new funding initiatives involving corporate investors in the energy sector in the fourth quarter of 2024.

Inndigo

Colombian energy utility Interconexión Eléctrica formed a corporate VC arm called Inndigo. Wayra, an accelerator and investment subsidiary of Spain-headquartered Telefónica, is supporting the initiative, as is Telefónica Movistar Group’s open innovation group and corporate fund. Inndigo is set to invest up to $130m by 2030 in energy transition companies from the series B stage onwards. Santiago Hoyos, Colombia-based head of innovation, will oversee the CVC team.

Pangea Ventures V

Pangaea Ventures, the Canadian venture firm focused on hard science startups, opened its first office in Asia, as a slew of Asian corporations join the company’s fifth and largest fund, which closed at $85m. Mitsui OSK Lines’ MOLPlus unit, JX Nippon Mining and Metals, chemical producers Mitsubishi Chemical Group, JSR and Toagosei – all Japanese corporations – were among the 11 LPs for Pangaea Ventures Impact Fund. GC Ventures, part of Thailand’s PTT Global Chemical, is also among the investors for the fund. Pangaea Ventures invests in materials science, biology and chemistry-orientated startups, or ‘hardtech’.


People moves

We reported a few people moves in the energy sector over the last quarter of 2024.

Steve Smith

Energy utility National Grid has promoted Steve Smith, formerly president of corporate venture arm National Grid Partners (NGP) to chief strategy and regulation officer. The NGP team will continue to report to Smith, with Pradeep Tagare overseeing NGP’s venture investment activity as vice president and head of investments. Ian Cooper heads the corporate venture capital activities for the unit in Europe. Smith came to National Grid in 2021 as head of strategy, innovation and market analytics, moving to president of NGP in February this year. He replaces Ben Wilson in his latest role, who is set to head up National Grid Ventures, the company’s large-scale clean energy infrastructure investment arm.

Maximilian Fleischer

Munich-based Maximilian Fleischer took up a ventures chief technology officer role at Siemens Energy Ventures, an investment arm of Siemens Energy. His role will be to identify emerging energy transition technologies and market trends, working with portfolio companies and formulating strategies. Fleischer worked at Siemens for nearly thirty years before joining Siemens Energy in 2020.

Madhu Basu

Madhu Basu was made venture client manager at Siemens Energy. Based in Dubai, Basu will use startup technologies to solve strategic issues for Siemens Energy. She has spent nearly five years at Siemens Energy, most recently as head of business excellence. She also held UK-based roles at Siemens and Dresser-Rand, the oil field equipment manufacturer, which was acquired by Siemens in 2014.

Mandy Philipp

Mandy Philipp will lead energy transition-focused venture building as innovation programme manager at Siemens Energy. After nearly 12 years at Siemens, Philipp joined Siemens Energy in 2020 and was most recently an innovation experience manager, where she helped launch the group’s corporate centre in Berlin.

Lukasz Michalak

Lukasz Michalak joined the Ukrainian energy company DTEK as deputy head of clean tech solutions and ventures, after nearly 12 years working for the UK investment company Octopus. He will work under Nacho Gimenez, who is head of clean tech solutions and ventures and also has a CVC background. DTEK is a Ukrainian energy company working across oil and gas, coal and renewable sources of energy. Michalak joined Octopus in 2013 as an investment manager, rising to investment director in 2020 after a role in corporate development. Octopus has subsidiaries in energy, real estate, investment management and venture capital.

Yusuke Shioyama

Yusuke Shioyama, former principal at 31Ventures, the corporate venturing arm of Japanese real estate company Mitsui Fudosan, joined Japanese power company JERA, Japan’s largest power generation company, in an investment role. He will continue to do corporate venturing at its CVC arm, JERA Ventures. Shioyama worked at Mitsui Fudosan for five years, where he built a reputation for his expertise in scouting decarbonisation startups. He was a GCV Rising Star in 2023.

Ravi Jain

Ravi Jain joined the Indian office of TDK Ventures, the corporate investment arm of Japanese technology company TDK. Jain, who will lead Indian investments for TDK Ventures, joins from his role as business head and vice-president of Krutrim, an Indian AI company making large language models and other components necessary for a full system. Previously, he was head of strategy for Ola Electric, an Indian electric vehicle manufacturing company which also makes battery cells. He joined the Ola Group in April 2021 as head of the Ola Cars business.

Dawn Brooks

Dawn Brooks left her role as associate principal at UK mining multinational Anglo American’s CVC arm, Decarbonisation Ventures. She joined Anglo American in 2018 in the marketing team as a specialist in platinum group metals. She moved to Decarbonisation Ventures in 2021. Her new role will be with Wood Mackenzie, a UK consultancy firm for the energy, chemicals and mining industries. She joins as a principal analyst for copper demand. Anglo American disbanded the Decarbonisation Ventures team later in the year. The investments remain on the balance sheet and are now being managed by the iron ore commodity marketing team rather than a dedicated corporate venturing unit.

© 2024 Mawsonia Ltd. All rights reserved.
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