ENGIE launches venture capital arm in Singapore
Over 80 startups have signed up to its programme aimed at accelerating renewable energy deployment in the Asia Pacific.
ENGIE launched ENGIE Factory Asia-Pacific in Singapore, the energy giant’s strategic venture arm for the Asia-Pacific region, to focus on ventures with startups, corporate partnerships, and strategic investments in renewable energy. In an interview with Asian Power, Quentin Vaquette, managing director of ENGIE Factory Asia-Pacific, discussed their BUILD-SCALE-INVEST approach to startups and the types of firms they’re looking to invest in and grow.
Of all Asia Pacific countries, why did ENGIE decide to set up ENGIE Factory in Singapore?
With over 40,000 local startups across multiple verticals, great connectivity to the rest of Asia-Pacific and a robust infrastructure for supporting energy innovation, Singapore is the ideal place to grow a business. The Singapore government has played an active role in helping to transform the global energy sector and has been supportive towards the growth of the startup ecosystem in the city-state through initiatives such as the StartupSG Network, a virtual platform that connects you to all the players you need in Singapore's vibrant tech startup ecosystem.
Singapore is furthermore the hub in Asia-Pacific that brings together most VC activity, events, and support programs. Therefore, it was a natural decision for ENGIE Factory Asia Pacific to establish our co-development, regional headquarters here.
We believe ENGIE, through ENGIE Factory Asia-Pacific, can play an active role in helping to expand and develop Asia-Pacific’s rich ecosystem of energy startups and co-develop innovative solutions that help us all reach a more decarbonised, decentralised, and digitalised world.
What opportunities are there in (1) Singapore and (2) Asia Pacific that ENGIE Factory wants to tap into? How do you enable growth for these opportunities?
Our mission is very simple, we are here to accelerate the Energy Transition in Asia-Pacific. We are doing this by (i) increasing the use of energy efficiency, (ii) accelerating the adoption of green mobility, (iii) accelerating the deployment of renewable energy production and (iv) enabling universal access to clean energy in remote areas. Singapore’s and the region’s thriving startup ecosystem provide us with an opportunity to achieve across the region.
With our BUILD-SCALE-INVEST approach, we are looking for startups and great founders across Asia-Pacific who are passionate about making a meaningful impact. We want to work these founders in making that possible by focusing where economics meet impact. To date, over 80 startups have applied to be part of our program and have expressed interest in collaborating with the ENGIE Factory, and we look forward to welcoming more onboard.
What major energy issues do you want to focus on with ENGIE Factory and how do you build models to solve them?
There are four key energy challenges faced by the Asia-Pacific region that we would like to address, which include (i) energy efficiency in building and industry, (ii) replacement of the region’s vehicle fleet by clean alternatives, (iii) increasing the share of renewable energy production and (iv) ensuring universal access to energy for all. None of these four subjects is limited by technological constraints, instead, they are limited today by adoption. They are limited by the number of products, solutions, startups, companies (whatever they may be) that provide an offer that users really care about and that works for them.
We believe that if we want to resolve these issues, we must listen to what the users tell and build products, solutions and companies that bridge the gap between the available and economically viable technologies and the user. This is what founders and startups are so good at and that is why we want to work with them. At ENGIE Factory, we are looking to empower in solving those issues them by providing them with access to resources, experts, customers, test sites, the ability to brainstorm with us and funding, to help make bring their ideas to life.
How do you know that a startup or corporate entity is fit for partnership or investment?
We look primarily at three things:
- Strategic fit and market: Do they solve a problem that we care about considering our mission? Are they working on a subject that really matters? But also, are they working on a subject for which there is a market? Is there a real customer pain point or is an invalidated “great idea”? Is the market big or small and especially is the market growing? Is anyone else solving this? (if not, I am always a bit more sceptical as someone else generally thought about your great idea before you and that is good because it can validate your idea in a different market or different context)
- Founders: Do they really believe what they are saying? Are they passionate about it? Are they really really good at something important for their business and are they aware of what they are not good at? Can they be coached and helped on what they are not good at? Can they “hussle” (ie. can they get to customers, are they not afraid of asking questions and gently insisting on being there)? Do they get stuff done or do they talk about?
- Traction: What have they really achieved? How many customers do they have? How many projects have they realised? How many leads do they have? Are they really focusing on customers or are they focusing on technology or product without looking at customers?
What is the ideal setup for investment or partnership with these firms?
The most important criteria is that we can actively contribute to each other, so we don’t see ENGIE Factory necessarily as a means to diversify our activities. Instead we believe that startups and corporates can enhance each other by working closely together. In some cases, we work with founders to build entirely new companies from scratch in one of the verticals mentioned above.
We will then make available our expertise, assets and footprint to help the company achieve product-market fit quickly and grow rapidly from there. In other cases, we will work together as partners at arms-length, sometimes without any equity, sometimes with equity, to bring relevant innovation in and help the company improve its product at the same time.
What of ENGIE Factory's plans can we look forward to in the future?
As a mission-focused organisation, ENGIE Factory is committed to accelerating the deployment of (i) energy efficiency, (ii) green mobility, (iii) renewable energy and (iv) universal access to energy. We will do this in three ways.
Firstly, by building entirely new ventures jointly with passionate entrepreneurs. Secondly, by establishing partnerships with startups that have a validated product and help them scale. We are present in over 70 countries so that if there is a match, we can help scale rapidly. Thirdly, we are investing in startups with ready-to-implement solutions that need capital to grow
What is your outlook towards Asia Pacific's renewables scene and the role of venture capital in it?
Venture capital is not the right tool to finance infrastructure. Instead, it is the right tool to finance business model innovation, which in turn allows adaption. Today, neither technology nor cost is holding back the deployment of more renewables (at least those mature ones like solar and onshore wind). Business model innovation, software, marketplaces and shared-economy platforms will help further accelerate the deployment of renewables and that where venture capital and entrepreneurship can play an important role. in my opinion.
We are reaching an extraordinary moment in time where clean solutions make economic sense (electric cars, solar energy, battery storage in some cases, energy efficiency algorithms, etc.) and where technologies are mature. A lot of tech (software) companies that will enable and accelerate the uptake of these technologies through products and services that people really care about. Personally, I am super excited about this.