French water and waste giant Suez Environnement has created a €50 million investment fund to help eco-innovative start-ups develop their products and get them onto the market.
Large enterprises can be useful partners to small start-ups was one lesson from the 9th ETAP Forum on Eco-innovation. “All success stories are linked to the corporate world,” said Matthias Ummenhofer from the European Investment Fund. French water and waste specialist Suez Environnement is the latest to go down this route. In November 2010, it launched Blue Orange, a new investment fund set to provide €50 million over the next decade to help eco-innovative firms get off the ground.
Suez follows in the footsteps of others such as Schneider Electric and Alstom, which together launched venture capital fund Aster Capital in 2000. Active in energy and the environment, Aster’s first fund invested successfully in over 20 companies in Europe and North America. It currently has €110 million of committed capital.
Blue Orange will fund innovative technologies in environmental services, specifically waste and water. It intends to invest up to €2 million as seed capital or development assistance in three to five start-ups per year in Europe, Asia or North America. Several dozen potential projects have already been identified, tackling challenges from developing smart networks to producing electricity from biogas.
“By investing in these start-ups, we are going to further strengthen our expertise and develop our competitiveness through new business models,” says Jean-Louis Chaussade, Suez Environnement CEO.
Research lies at the heart of Suez Environnement’s business strategy – the company invested €65 million in R&D in 2009 – and Blue Orange is intended to usher in a period of more open and collaborative innovation. But the parent company intends to reap the benefits and is imposing two conditions on companies that get Blue Orange funding: they must be sponsored by an individual division within Suez Environnement and the latter gets a seat on their board.
In return, the start-up gains access to Suez Environnement’s impressive research infrastructure – 500 cutting-edge scientists and 200 laboratories – and benefits from the group’s widespread commercial and industrial exposure as well as its market knowledge, management skills and contacts.
Blue Orange’s first deal has already been signed. It will help fund a project in the UK between innovator Cynar and Suez Environnement subsidiary SITA UK to transform plastic waste into ready-to-use diesel fuel. The project intends to implement a new conversion technology developed by Cynar in ten plants. The first is planned for 2011 in London. Each will convert around 6 000 tonnes of mixed plastic waste into diesel with a lower carbon footprint than normal diesel and at lower cost. Quality will be unaffected.