There’s a new global venture capital player in the startup nation, and they’re looking for Israeli startups. Specifically, there’s a competition
With the successful launch of Innogy Israel on December 6, the new European energy company — innogy — has a different, agile approach to changing the world: Disrupting current business models by collaborating with the innovators. The event was an introduction to the changing industry perspectives that resulted in innogy, and also to their new startup competition for Smart & Connected Homes and Businesses. Innogy has been active in Israel for the last two years under the name of its parent company, RWE.
We got a chance to sit with Managing Director Thomas W. Thomas and Investment Manager Véronique Hördemann to discuss what changing the world of energy looks like from the investor’s side, and what opportunities exist for Israeli startups.
When was the VC unit created? What is the planned investment volume?
TT: RWE and innogy already have a long history of venture capital investments. With our activities, we are the latest “venture generation” and started investing in early 2016. Our investment volume amounts to €130 million for a 10-year period.
How close is the VC to the business? Do you invest in any company or only in ones that are close to the innogy fields of interests?
TT: The VC unit is set up as an independent company with its own financial targets to ensure that we essentially operate as any other VC, i.e. for each investment, we aim for a successful exit. Ventures, in which we invest, are driven by disruptive digital solutions in areas such as big data, IoT, blockchain and gamification, and ideally operate in these fields:
- SMART & CONNECTED economy, including mobility, smart city and urban solutions, privacy and security, and smart home.
- NEW ENERGY, including smart grids and metering, decentralized energy markets and platforms, decentralized energy and energy storage as well as efficiency
- MODERN RETAILING, including customer engagement, online marketing, marketplaces, and lead generation.
This list is not exhaustive and we are always interested in further diversification of our ventures.
Do you consider yourselves a strategic or financial investor?
TT: As mentioned before, financial performance of our investments is key and is what we are incentivized on. Therefore, we consider ourselves a financial investor with the backing of a corporate that has a vast network of experts and industry know-how of which our portfolio companies can profit from.
Average size of the investments? In which maturity does the CVC like to invest?
VH: We mainly invest in early-growth stage companies, which primarily is series A and B. Our usual ticket size for our initial investment ranges from €1 million up to €5 million, of course with the option of follow-on investments. Given an investment volume of €130 million, we seek for a well-balanced diversification throughout our portfolio.
Can you tell us more about companies you have invested in?
VH: In the last few months, we have invested in move24, a leading relocation service provider in Central and Western Europe. With the new funds, move24 plans to broaden its range of offered services as well as expand to further countries. This is also why innogy works with this company – people that relocate also might want to swap their electricity, gas or telephone provider and buy smart home products.
TT: Other examples are Bigchain.DB, a scalable blockchain database provider, and a US-based company that develops a Home IoT platform.
Do you tend to follow or lead the round? What kind of support does the VC provide to the startup in which it has invested?
TT: We cover both – lead and co-investments with leading VC partners.
How does the VC support a startup?
VH: The venture team now consists of serial entrepreneurs, long-standing VCs and energy industry experts — with this combination of skills, we are able to support a startup from all necessary directions. Plus we have the backing of the whole innogy ecosystem as mentioned above, which is a key differentiator for us and enables us to provide more than “just” capital.
What are the key criteria that you evaluate in a startup in order to invest in them?
TT: Our key objective is to invest in brilliant startups that offer a game-changing proposition in their respective industries. This requires more than anything else a top team, but of course also other aspects such as value position and scalability. A key question for us also is if we are the best partner to support this company in its growth path.
Innogy and its investors continue to work hard to inspire change in their industry, and are always looking for new startups to partner with, mentor and fund, with the hope that through collaboration will come real change.
For more information on innogy’s Smart & Connected Homes and Businesses competition, click this link: http://innogy-israel.com/.