In November 2016 “DONG” became “Ørsted”. What was once a fossil-based black power generating utility became a green transformation leader. It was a far from an effortless, overnight process, but a 5-year long transformation, that like any other, involved a great deal of self-reflection.
Of course, Ørsted was never a stranger to supporting and learning from the ever-growing world of innovation happening outside the company. For many years, and what is de facto still happening – each of the departments across the organization would engage in individual venture activities, separately approaching the external environment, concentrating mostly on what they can generate and create internally.
But the real big step, the one that caught our attention the most, happened when they decided to start Ørsted Venture - a single vehicle to the external ecosystems. This allowed the whole organization to simultaneously tap into the outside innovation, and use it as a supplement to what is being built internally. Based on the analysis of the organization’s innovation space and market intelligence, Ørsted realized the possibilities that venture investments can bring.
In Ørsted, innovation is the bread and butter of our work, so to speak. Diversity helps drive innovation we rely on so heavily to be able to stay competitive in the markets where we're operating.
What truly makes Ørsted stand out in the sea of corporate venturing is their search and dedication to involving startups as allies and not only assets. The startups that they choose to invest and collaborate with are essentially the ones that will not only bring financial returns but would generate strategic value for the organization.
To achieve this, they decided to look for the companies that would be relevant for diverse parts of their business, and engage with them in a variety of ways, that would at the same time bring benefits both to the corporation and the startup.
The very definition of ‘partnership’. Building unique relationships with startups that bring value to the business, while at the same time contribute to the startup’s own development with more than just capital, is a great example of symbiotic relationships, or what we would often refer to as a ‘win-win situation’. This exchange for innovation and fresh perspective is always tailored to the specific situation and can include anything between access to assets and customer base to exchange of engineers and skills.
Since Ørsted Ventures is not a stand-alone fund, the starting point is going to the Ørsted investment committee with an investment proposal. This committee is the one taking all investment decisions from the smallest to the very large offshore wind funds.
And because of the already mentioned strategic mandate when serving the business, the Venture team also needs a sponsor - one of the heads of the business units must become a sponsor of the idea. Which means that every such voyage starts by linking the startup with a relevant person from one of the business units that would be responsible for leading the collaboration. The Venture team does facilitate the collaboration, but it is eventually something that is nested within the relevant business unit.
Finding and Choosing the Startups to Work With
In order to collaborate with a company, Ørsted first makes sure that a given startup is the right one for them, and at the same time - they are the right company for the startup. On one hand, they go through the startup’s product: the problem they are solving, their business plan, do they have market traction ready, and so on. But on the other hand, they make sure the startup itself can benefit from this relationship. Do they need access to Ørsted’s assets? To their customers? Do they maybe need help in developing their business further? It is only once both sides of the equation match, that a decision for collaboration is made.
The Type of Startups Ørsted Ventures Is Interested In
The search areas are always based on the organization’s current activities: offshore wind, bioenergy, B2B energy customers, and emerging energy solution solar businesses. But in terms of startup characteristics, it is mostly companies that can equally benefit from such a relationship with Ørsted that are of interest. Especially in terms of market expansion, market entry, commercialization of a proven product, etc.
They are looking for startups with a proof of concept, successful pilot projects, and revenue. And in terms of the investment round, Ørsted looks at startups that find themselves in their series B or C.
Finding the Right Startups Is a Time and Energy Consuming Job
At a time where the number of promising, agile startups are growing at an exponential rate, finding and deciding on the right one to work with is a very challenging, time-consuming task for a corporation such as Ørsted. It requires a combination of many hours of desktop research, engaging dialogue with the startup, understanding their needs, and realizing what the organization can offer them in return.