Axios Pro: Climate Deals
May 10, 2022
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📉 Situational awareness: Rivian shares sank 21% Monday as early stakeholders like Ford and Amazon unloaded shares following the end of the public listing lockup period. In other news, oil slumped 6% to $102. More about the market selloff is on Axios.com.

1 big thing: TotalEnergies dismantling venture arm

Illustration of a closed sign in the shape of a 100 dollar bill
Illustration: Sarah Grillo/Axios

The oil and gas giant TotalEnergies is shuttering TotalEnergies Ventures, its climate-tech investment arm, and replacing it with an accelerator, three sources tell Alan.

Why it matters: With investors crowding clean energy and climate-tech — and sending valuations skyward — some corporate VCs are pushing into earlier stages to break away from the competition.

  • An accelerator model, with the smaller investments it brings, offers a way to mitigate early-stage risk while still gaining access to potential innovations, customers and new business models.

Driving the news: The head of TotalEnergies, Girish Nadkarni, announced last winter his plans to retire, and that may have presented an opportunity for TotalEnergies to reassess.

  • Energy insiders noticed when Edouard Bulteau, formerly a director at TotalEnergies Ventures, moved to the company's accelerator in December and wasn't replaced at the venture operation.
  • Later-stage rounds have become far more competitive, and climate tech valuations are soaring. That's challenged corporate VCs, which typically have less capital than traditional VC firms, to keep pace.
  • Transitioning to an accelerator allows a corporate VC to connect with startups at their earliest stages.

Background: Sources tell Alan that TotalEnergies is winding down its fund, Total Carbon Neutrality Ventures, which had managed about $400 million.

Yes, and: In its early years, Total Ventures made large investments in biofuels — a sector that at the time seemed the least alien and most aligned with the oil major's core business, but which was a long way from becoming profitable.

  • The venture arm pivoted in 2017 with new leadership, refocusing to invest in climate-tech sectors like electricity, mobility and building materials — and delivering healthy returns.

💭 Megan's thought bubble: Corporate venture arms are often among the first to go when companies start tightening their belts amid widespread volatility and uncertainty.

  • Long-term investment in startups ultimately doesn't do much for most companies' bottom lines, especially in a down market.

TotalEnergies did not respond to a request for comment.

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