As part of Total’s commitment to a better energy future, Total Energy Ventures constantly tracks the start-up ecosystem in order to identify, promote and capitalize on breakthrough innovations. We sat down with Ugo Catry, investment manager based in San Francisco to learn more.
Total Energy Ventures is the Corporate Venture arm of Total, it invests in innovative startups that can help build new business in a low-carbon world. We have invested more than $200M in 30 investments. These investments we have made are both in startups but also into VC funds.
We invest mainly in:
Two thirds of our active portfolio is located in the US, and about half in the Bay Area. The reason we decided to have some of our team here was to be able to maintain a close relationship with our portfolio companies. We also wanted to be able to follow, review and close deals from A to Z where they are happening.
I am an investment manager, which means I source startups and engage with entrepreneurs to see if there is mutual interest. I will run the due diligence that could then lead to potential investment, and I also have board seats on five companies. Ultimately, I help them create commercial relationships with the group.
It’s pretty informal. I work with a network of internal sponsors who are top executives and have innovation within their scope of work. I speak to a lot of the strategy directors of every branch, with the R&D directors, the Chief Digital Officers; basically anyone in the company who can be interested in growing new businesses and new activities.
I try to set up meetings with the startup, have the CEO pitch to top executives at Total, and middle level management. It is important to target the top because that is where the decision happens, but it is also important to convince those who manage the everyday P&L to reassure them that this new business is not such a big deal, and that it’s an opportunity rather than a threat.
The goal at the end of the day is to transfer the responsibility of interacting with the startup to someone on the operational side and get them to be the project leader. I am just here to help move the relationship along.
The new CEO of Total asked the employees and top management to think about what Total should be in 20 years. It led to the definition of a new long-term vision to 2035 called “One Total”. It says 3 main things:
We have to abide by the Paris Climate Agreement and the 2 degrees objective. This implies that we will have to evolve our energy mix production towards low carbon energy
We are out of coal and we are transitioning from oil to gas. At Total we believe gas is the best transitional energy vector from the old world of energy to the new world. It is realistic to think that we need gas for the next 30 to 40 years to make up the baseline energy of our mix.
By 2035 our objective is to develop 20% of our business into renewables. Today renewables only represent 2%.
This is a huge shift in strategy. This is why we are here. We don’t have the internal capability to develop this business, we are not from the utility or electricity world, we need to feed the group from external innovation and competencies. This explains why we developed our investment activity over here. I think we are the only ones in the oil and gas industry to have taken such a commitment and the only one that is shifting its core business model.
Obviously it is both and electric mobility is 100% in our strategy. We are a market taker, not pricer, so if our customers need electricity to consume mobility, then we have to adapt and serve it to them. We will approach electric vehicles through our electricity retail business, more than with our gas business, since 90% of the charging will take place at home or at the office.
We are an old industrial company and we need to catch up, clearly! We are starting to digitalize our operations and industry 4.0 is on its way. However, when it comes to managing the relationship with our customers, we are far behind the retail industry. We need to master the digital tools to increase loyalty, customer engagement, and the CRM side of our business.
People come to us when their tank is low, or if you are part of a fleet, you have a loyalty card that incentivizes you to come to our gas station. Connected cars are a huge opportunity for us. We can gather data on our customers, know where they are, know when we can provide products and services they need in real time.
For our B2C customers, we would be able to know when their tank is low and provide them with information on the nearest gas station with a map or Waze integration, and offer them a cup of coffee when they fill up or some other form of reward to increase their loyalty.
This is a revolution because it is a customer-centric approach, and until now we have taken a supply-first approach.
The Open Innovation Club has been a tremendous opportunity for us to stay on top of all the hot topics of the moment and latest technology developments and innovation. It allows us to have a good understanding of what is happening even if it is not core to our business.
We are happy to maintain good relations with our peers in the Bay Area, other French companies that have outposts over here. We also enjoy the opportunity to have access to entrepreneurs and startups every month.