Energy Ventures, a Norwegian first time venture fund investing in energy related early stage technology companies, has proved that early stage, technology and a first time fund are not necessarily a recipe for disaster by announcing its first closing last month. The magic ingredient in this recipe, however, must rest with an agreement drawn up with energy giant BP in the summer of last year prior to the launch of Energy Ventures and its fund.
The agreement means Energy Ventures gets advice from BP, the possible use of test sites to do technology due diligence and deal flow. The latter is important, explains Helge Tveit of Energy Ventures, because although a significant buyer of energy related technology BP’s policy prevents it from investing directly in such opportunities. However, as a significant buyer it has a vested interest in seeing that new technologies of benefit to the energy sector are developed.
Energy Ventures was formed by a group of energy sector advisers who were inspired by a good deal of quality venture capital deal flow they came across in their previous capacity.
BP has a similar technology co-operation agreement, as Tveit describes it, with First Reserve in Texas, USA. Although First Reserve is operating in a different field to Energy Ventures in the sense that First Reserve operates from a circa $1 billion fund while Energy Ventures has just held its first closing at 205 million kroner (about EURO30 million). Energy Ventures hopes to close the fund at circa EURO50 million in October this year since it has a shortlist of potential investors that it will be talking to in this second round. One or two investments, at most, are likely to follow before year-end.