The energy industry is similar to other traditional sectors (think construction, for example) that have been slow to adopt new technology, yet are ripe with inefficiencies.
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The energy industry is also massive. According to the International Energy Agency, total investment in the U.S. energy sector was valued at a staggering $350 billion in 2018 (the second-largest in the world).
For venture (and corporate) investors, such a huge market spells huge opportunity.
To that end, a newly-formed venture capital firm called Piva announced today the launch of its inaugural $250 million fund with the mission of ushering in “a new era of industry and energy.” Specifically, the San Francisco-based firm is looking to invest in early-to-growth stage companies across North America, Europe and Asia.
Petroliam Nasional Berhad (PETRONAS) – the national oil company of Malaysia with $62.2 billion in revenue – is the fund’s sole LP. Piva, however, insists that it operates independently from the energy giant (which separately formed a corporate VC fund in October called Petronas CVC).
GE Ventures alum Ricardo Angel is at the helm, serving as the firm’s CEO and managing partner. While at GE, Angel also served as the managing director for Energy Technology Ventures (ETV), a $300 million joint venture formed by GE, NRG Energy Inc. and ConocoPhillips.
He’s joined by a slew of partners hailing from a variety of companies in the industry such as BP and Schlumberger.
“New types of technologies will solve the most critical industrial, material and energy problems we face today,” Colombia-born Angel said. “We see huge opportunity coming to fruition in the next five, 10 to 20 years.”
Piva plans to invest in 15 to 20 companies out of the new fund with an initial investment ranging from $5 million to $10 million. Over time, it is seeking to deploy $20 million to $30 million into each company.
The new firm’s main areas of interest include: the future of industry (Industry 4.0), such as revolutionary cyber-physical solutions; the future of energy, (including new energy source and generation, distribution, demand and consumption); and the future of materials.
“This is about much more than just renewables,” Angel told me. “Yes, we need to continue to make them cheaper, more efficient, available and economical. But in addition to that, we’re looking to leverage technology and innovation to make existing operations operate more efficiently and cost-effectively, as well as greener and safer. We’re also looking to increase new sources of energy.”
Illustration: Li-Anne Dias