This article was published on September 24, 2021

Dear Venture Capitalists, you can help save the world — by investing in carbon neutral startups

B2B startups can be the future of green solutions

Dear Venture Capitalists, you can help save the world — by investing in carbon neutral startups

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Technology is evolving faster than ever before. It creates the opportunity for new products, business models, and bringing products more quickly to market. But what does it mean for industries such as mobility and energy? I spoke to Girish Nadkarni, the CEO of TotalEnergies Ventures, to find out.

TotalEnergies  Ventures focuses on finding, funding, and fostering high-potential startups that will create a low carbon future. This encompasses areas such as renewables, distributed energy, new mobility, energy access, energy storage, bio-plastics and recycling, AI, and IoT.

The challenges for B2B startups in the Venture Capital space

According to Nadkarni, success in the B2B space is markedly different from B2C.

In the B2B industrial space, it’s not just that technology takes time to develop. It’s a sector characterized by long development and sales cycles. In the B2C world, within nine to 18 you know whether or not you will be successful.

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Industrial B2B startups disrupt large established companies, and traditional industries like utilities and manufacturing. They often focus on internal transformation or introducing new products to mission-critical functions and tasks. Therefore, startups need experience in the industries they aim to disrupt and support from a solid network to open doors. 

TotalEnergies Ventures focuses on later-stage investments. Nadkarni explains:

There are three risks that startups face: technology, market, and financing. So we say, ‘Okay, show us that you have customers willing to pay.’ We have a business development team, which works with our portfolio companies, and we address the barriers to success, make sure they talk to the right people.

Over the last couple of years, TotalEnergies Ventures have negotiated 25 different pilot projects and agreements and has another 55 under negotiation. According to Nadkarni:

We are making sure that we are not just a passive investor but a value-added partner.

Venture investment in ChargeTrip is a
Venture investment in companies like ChargeTrip unlocks the potential of electric mobility.

Failure and barriers to innovation

Nadkarni sees failure as part of progress for startups as it provides a learning opportunity. He notes that:

Sometimes you thought the project through only at a very superficial level, so the crucial success factors are not in place yet. Maybe the infrastructure is not there yet. Or sometimes, you’re applying an old mindset to new technology.

His favorite example is when desktop computers first came to people’s homes:

“People said, ‘Oh, now I can store my recipes conveniently.’ Well, yes, you can, but that’s not leveraging the power of the computer.”

In technology, being too early is sometimes the same thing as being wrong. Nadkarni explains:

A company called General Magic actually designed the functional equivalent of an iPad. The only problem was, they were five years too early. The processors didn’t go that fast. Touchscreen technology was not that good. The cables and the cellular connections weren’t great. So now they had everything that was sufficient, but not everything that was necessary.”

The future of venture capital is green energy 

venture capital accelerates hydrogen technology
Venture capital support accelerates carbon dioxide recycling efforts by B2B startups like Deep Branch.

Total Energies is a founding member of the Oil and Gas Climate Initiative, a CEO-led initiative that aims to accelerate the industry response to climate change. Nadkarni has a significant interest in hydrogen infrastructure and is leading an initiative with Air Liquide to raise a 1.5 BEUR clean hydrogen infrastructure fund. He notes:

The point of the fund is to kick start the hydrogen ecosystem and not just let’s find the best investments. We realize that there are many players just waiting in the wings for somebody to start the race. So what we want to address is the major sectors such as mobility and generation of green hydrogen. Regarding mobility, it’s about avoiding the chicken and egg problem by picking a territory at a time, and then funding the acquisition of the truck fleets and setting up all the hydrogen refueling stations at the same time.

Nadkarni assets that large companies are recognizing the need to get lower their carbon emissions:

There is pressure from regulators and reporting requirements. There’s pressure from investors. Incentives increase through governments offering subsidies. Additionally, younger consumers are becoming more aware. Even if it’s more expensive, companies like Tesco and Stella McCartney will pay more for bio-plastics. All the stakeholders are putting pressure. So there is no place to escape.

Do EVs excite your electrons? Do ebikes get your wheels spinning? Do self-driving cars get you all charged up? 

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