Early-stage firms to be main beneficiaries of $100M Suncor, Cenovus cleantech fund
Evok Innovations hopes to give entrepreneurs, startups a "direct line" to oil and gas giants, a way into oilsands supply chain
VANCOUVER—Cleantech companies in Canada’s massive energy industry have spent a long time on the outside looking in.
Between fighting for funding, for environmental regulations and for a place at the table, cleantech entrepreneurs and startups have had to battle long and hard for each investor and every sale. While that’s not going to change, a new $100 million investment fund promises to give early-stage cleantech companies a way to cross the dreaded “valley of death” between their initial innovation and commercialization.
“Evok was largely created to address that funding gap,” Marty Reed, CEO of recently-formed Evok Innovations, said.
Backed by $50 million over 10 years from both Suncor Energy Inc. and Cenovus Energy Inc., in partnership with the BC Cleantech CEO Alliance, the new fund will be an investment vehicle designed to help transition Canada’s oil and gas sector into the country’s still-developing sustainable economy.
Most importantly for entrepreneurs, Evok plans to target early-stage companies looking to scale up.
“They don’t need to be large companies; minimally a founder or two or three really smart engineers,” Reed said.
Along with an innovative technology, Reed said the fund will be looking for a talented team, intellectual property in the form of patents or patents pending, a proof of concept, and of course, a business plan. Though Evok says its approach to finding companies to fill up its portfolio will be largely traditional—through its network of funders and managers’ personal networks—it also wants to foster innovation by being open to a broad range of ideas and proposals.
“Part of what we are telling the world and what makes us somewhat unique is we really are trying to be entrepreneurial in our approach,” Reed said. In fact, the new CEO is a serial entrepreneur himself, having founded five companies over 20 years in Silicon Valley.
“We don’t intend to be prescriptive in terms of ‘here is one specific RFP—can you please respond and then we’ll get back to you on this date?’ It will be an evergreen process whereby we’ll be making investments on a periodic basis, hoping to best match the needs of the company as opposed to making the company wait for our schedule,” Reed said.
Evok expects its investments in individual companies to range from several hundred thousand dollars to a couple million.
Once the fund has taken a firm under its wing, it plans to take a proactive approach to the investment—something Reed says can include everything from connecting the startup with funders, existing incubators and accelerators, to having Evok’s own team take on interim management roles within the company. Of course, it also plans to track its portfolio’s performance across a range of metrics, including financial return, technological development and environmental impact.
Along with simply helping companies reach the commercial stage, Evok will also aim to address what has been a major problem for cleantech companies looking to break into the energy sector—scale. Even after 18 months of struggling oil and gas and commodity prices, Suncor and Cenovus have a combined market cap of more than $50 billion. To say fledgling cleantech startups have a difficult time catching the eye of corporations of that magnitude is a significant understatement.
“It’s certainly a challenge for a small, early stage company to interact with a company the size of Suncor,” Reed said.
“What we hope to do is to be able to serve as a bit of a filter to help guide companies and improve that process and then most certainly with those that we get involved with directly, one of the values we hope to bring is a very direct line into those Suncors and Cenovus’s,” he added.
To do this, Evok intends to tap into its connections with Suncor and Cenovus, as well as the energy sector at large, and connect its portfolio with companies at all stages production—from upstream producers to service providers and engineering, procurement and construction companies.
With more than 200 companies already in its funnel, and expectations to increase that number to upwards of 1,000 over the next six months, Evok Innovations offers the oilsands giants as well as upstart cleantech firms the opportunity to start building a more sustainable Canadian energy sector from the ground up.