To grow, every SME needs funding. However, is venture capital the way to go? BP Ventures’ London-based MD Akira Kirton shares his insights.
Ten years ago, BP Ventures was set up to identify and invest in private, high growth technology companies. Since then it has invested over US$400 million in over 40 firms.
In recent years the company has grown in strategic importance to BP, becoming a third priority in the company’s overall strategy to move forward with energy transitioning. As such, the fund’s budget has grown from US$30 -US$40 million a year to US$200 million, with recent investments including AI firm Beyond Limits, RocketRoute, and Fly Victor.
In an exclusive interview with TechHQ, Akira Kirton, Managing Director – EMEA & MOW, BP Ventures spills the beans on how investments are made.
How do you know what kind of companies you want to invest in?
At least 70 percent of our investments are high network, strategic and aligned with our current strategy, but we are also opportunistic, we do sometimes see a great a company and if we believe it will fit and deliver value we invest.
At a high level we are not stage biased, we invest in companies even before they are looking for it from US$250,000 to US$30 to US$40 million for late stage investment.
Most important for us is our belief-set that we see a pathway to helping the company, but also to create value internally for BP.
Besides money, what do firms get from BP’s investment?
Alongside the equity investment, we always negotiate the commercial agreement so a company can access BPs brand or engineering capability or services.
We invested in Solidia Technologies, for example, and we helped the company develop its commercial business model.
One of my team members helped build their business plan and our technology transfer and licencing team helped them find the best way to achieve sales and revenue growth.
How do you scout potential investment opportunities?
We source in two ways predominantly. One is word of mouth, being physically present in markets and actively attending conferences and engaging with the external bench capital community, as well as engaging with our board members and investors.
We also engage with our networks to get access to and to find out what companies are doing. Because we have co-invested with over 200 other venture capitalists and corporate entities that word of mouth network is pretty powerful.