Axios Pro Exclusive Content

Expert Voices: National Grid's VC arm hones strategy

photo illustration of Steve Smith of National Grid Partners surrounded by colorful rectangles

Steve Smith. Illustration: Tiffany Herring/Axios; Photo: Courtesy of National Grid Partners

The VC arm of British utility National Grid has honed its investing focus and moved its office to Silicon Valley's Sand Hill Road, National Grid Partners' President Steve Smith tells Axios exclusively.

Why it matters: Utilities will play a key role in the energy transition, managing future soaring demand for electricity and clean energy, Katie writes.

  • London-based National Grid is one of the world's largest utilities, and its VC firm National Grid Partners has invested more than $400 million in 43 companies since launching in 2018.
  • The firm's new focus includes four areas: net zero electric networks, customer-focused energy transition, computing-based efficiency, and decarbonizing gas networks.
  • The sharpened strategy is meant to attack the problem of "how on earth are we going to build and scale our networks and digitize them fast enough to meet that rush of demand that's coming our way," says Smith.

This interview was lightly edited for clarity.

What in your view was the big news in climate-tech investing this month?

  • "The tailwinds from COP28 and the alignment of nations to act urgently provides continued momentum to invest in the climate-tech space. Global spending will be in the trillions of dollars."

What would you add to the narrative?

  • "Optimism! Major forces are aligning (eg the decarbonization of heat and transport) to make investments in breakthrough technology essential. That's a good thing for the climate, the economy and our business future."

By contrast, what's going undernoticed in climate tech investing?

  • "The legacy network. I think there are lots of opportunities thinking about the application of clean tech to gas networks."

One tip for climate-tech investors or founders:

  • "I think you have to think about the problem differently and think about how you're going to interact with some of the players who are there at the moment.
  • You need to play with the existing utilities. You need access to their networks.
  • It's not quite the same as many other sectors where you can come in and disrupt everything."

Three fun things:

💼 First job:

  • "I worked in a grocery store. I learned the importance of looking after your customers."

👑 Proudest investment:

  • "Our AI investments. Because we were way ahead of the curve."

🤦🏻‍♂️ Facepalm investment or investment you wish you made:

  • "I did some personal investing before I did NGP, and I invested in a company in the payment space in the U.K."
  • "That was just a real lesson. That's a big market, dominated by so many players. If you think you could do something on a small scale, forget it."
Go deeper