The investments of corporate venture capital funds in startups in the energy sector have represented a total turnover of 5,980 million euros between 2018 and 2020. This is revealed in the NTT DATA ‘Energy Trends’ report, where it is has analyzed these investments to provide an overview of current trends in the energy macro-sector, around venture capital investments made in technology startups and new business models. “This report shows us that, from its origins, the energy sector has opted for innovation as a fundamental pillar of the industry, impacting the way of life of millions of citizens around the world”, explains Héctor Pinar, Partner in charge of Gas & Power at NTT DATA Europe & LATAM.
Investment in the energy sector
Investments have continued on an upward trend with growth recorded at annual rates of 17% since 2008. However, the arrival of the pandemic in March 2020 caused a significant drop in the number of deals and investments. These operations, which the sector estimated could have reached 132 investments, fell during 2020, reaching 46 investment events. All this, bordering on 6,000 million euros. Regarding the maximum amount invested during this analyzed time range, the average amount of the TOP 5 new investments was 200 million dollars. As a novelty regarding the sector, the report prepared by NTT DATA detects a substantial change in relation to the leadership of electricity companies compared to oil companies. A trend that has been reversed over the last three years, as the latter have taken the lead by participating in 20% more investment events than electricity companies.
Investment by geographic area
The main investment poles, based on the headquarters of the invested startups, are in the US and Europe, with California and Germany being the most prominent.
The energy sector has invested 6,000 million euros in technology startups
The USA concentrates almost 50% of all investment events, while the Old Continent accumulates almost 40%. However, these main investment points are giving way to emerging markets, standing out above all the Middle East. LATAM, Asia, the Middle East and Africa are beginning to grow their innovative ecosystems, thanks to the promotion of their large corporations in startups from their own geography, betting on their own talent, which will lead to the appearance of hubs in the coming years that increase the creation of new startups and innovative solutions for the sector.
Industry trends and 2030 vision
In short, it is expected that these data will continue to increase year after year, due to the boost offered by government aid and measures, launched in favor of these new models. Direct investment in renewable energies through the Next Generation funds, or the commitment of the United States or Asia to less polluting production, storage and mobility models, lead us to foresee an exponential growth in innovation in the sector in the coming years, applying disruptive models that increase the value of the energy sector and its possible applications. This growth will also be driven by the consolidation of new collaboration models between corporations and startups, models that are highly attractive to both parties, offering less risk and more independence for startups, thus not limiting their growth or agility.