How Ørsted Venture Turns Startups into Allies, Not Just Assets

Orsted
Money Bag

REVENUE

€10.7 Billion

HEADQUATERS

HEADQUATERS

Fredericia, Denmark

Portfolio

EMPLOYEES

6,080 People

Factory

INDUSTRY

Electricity Generation

Emerging from a recent 5-year-metamorphosis, Ørsted found itself peeking at the outside world again, at the grassroots, around the company.

In November 2016 “DONG” became “Ørsted”. What used to be a fossil based black power generating utility became a green transformation leader. And just as one might think, it was a far from effortless, overnight process, but a 5 year long transformation, that just as 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 organisation would engage in individual venture activities, separately approaching the external environment, concentrating mostly on what they can generate and create internally.

Mlejny

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 organisation to simultaneously tap into the outside innovation, and use it as a supplement to what is being built internally. Based upon analysis of the organisation’s innovation space and market intelligence, Ørsted realised the possibilities that venture investments can bring.

Emphasis on Strategic Value

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 a strategic value for the organisation. 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.

Building Symbiotic Relationships

Which is basically the very definition of ‘partnership’. Building unique relationships with startups that bring value to the business, while at the same time contributing 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 ‘win-win situations’.

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.

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Once a Potential Startup Is Found

Since Ørsted Ventures is not a stand alone fund, the starting point is always 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 with linking the startup with a relevant person from one of the business units that would be responsible of leading the collaboration. The Venture team does facilitate the collaboration, but it’s eventually something that’s nested within the relevant business unit.

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MILESTONES ACHIEVED

co2

67%

CO2 REDUCED BY

800mill

356

WINDMILLS IN DENMARK

multiple-users-silhouette

11.7M

CUSTOMERS

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 that, at the same time – they’re the right company for the startup. On one hand, they go through the startup’s product: the problem they’re solving, their business plan, do they have a 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’s only once the both sides of the equation match, that a decision for collaboration is made.

Finding and Choosing the Startups

Aarhus Case Competition 2017 – Ørsted Facebook Page

The Type of Startups Ørsted Ventures Is Interested In

In terms of the search areas, they’re always based on the organisation’s current activities: the offshore wind business, the bio energy business, the B2B energy customer business, and an emerging energy solution solar business. But in terms of startup characteristics it’s the companies that have the need for the type of help that Ørsted can offer – market expansion, market entry, commercialisation of proven product, etc.

This means that they’re trying to find startups with a proof of concept, successful pilot projects, and some sort of revenue (doesn’t have to be substantial revenue, but some revenue). In venture terms, you could say that they’re looking to invest in in companies that find themselves somewhere around the series B or C round, depending on the exact definition.

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Finding the Right Startups Is a Time and Energy Consuming Job

At a time where the number of promising, amazing startups seems to grow exponentially, 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.

windmill

Valuer Connects Corporations with Startups

Valuer helps corporations find “high potential” startups that specifically fit the corporation’s strategic innovation requirements. In order to achieve this, Valuer developed a platform that uses crowdsourcing and artificial intelligence to detect, predict, evaluate and select startups that are particularly relevant to large companies.

When a large company starts using the platform, the Valuer radar is calibrated to explore the areas which are mission critical for the company. This way Valuer helps corporations navigate and cure the vast amount of startup data within their individual innovation areas.