Recently, we caught up with Luís Manuel, Executive Director at EDP Inovação.
EDP is the main energy company in Portugal and the fourth largest wind energy production company in the world, being present in 19 countries and 4 continents.
This Mind the Chat digs deeper into their open innovation approach.
“The promotion of startup-corporate cooperation is absolutely vital. The capacity to work with startups is a key competitive advantage that all companies need to seek at least to have.” EDP is among the innovation leading companies awarded by ICC and Mind the Bridge as part of Corporate Startup Stars Award 2020.
EDP Inovação at a glance
EDP innovation’s journey started over a decade ago. Today, EDP Inovação manages multiple instruments:
- EDP Ventures is the venture capital arm of the EDP Group.
- EDP Starter is the flagship startup engagement and incubation activity.
- Free Electrons is an annual accelerator program matching startups with utility companies.
- EDP’s Fablab for industrial rapid prototyping tools at the disposal of the EDP community.
- EDP Open Data provides access to real data for collaboration and project development.
- Labelec is a Center of technical excellence with seven accredited laboratories.
- R&D center provides infrastructure for international projects in the energy sector.
The verticals and technologies EDP explores are mostly focused on Digital Innovation, Energy Storage, Cleaner Energy, Customer Solutions and Smart Grids.
Below, we highlight the main insights gained throughout the interview.
Attracting Startups Through Dealmaking
EDP manages to attract over 2,000 startups per year – in part because its programs are directed to make business happen. This takes place mainly through the EDP Starter and Free Electrons programs – where startups are matched with the challenges of multiple utility companies.
“Cooperating with other utilities makes the program very attractive for startups.”
Only through Free Electrons, 57 startups have signed deals with 10 utilities with a total value over 50 million euros. These startups usually are doing 500.000 to 1 million euros of revenue, so this program provides them the opportunity to double their revenue in one year.
Challenges for these programs are sourced from the different utilities participating in the program. The learnings gained in this process can lead to structuring yearly specific challenges that are run for a smaller, narrower audience – involving directly the business units.
EDP Open Data: Fostering Data Analytics
On top of the incubation and acceleration programs, EDP provides, through its public website, its own data to enable startups to identify opportunities for developing innovative products, services and projects. EDP, by monitoring the results can obtain insights – and, on a case by case basis, evolving into developing concrete projects with these startups.
EDP Inovação’s objective is to build community
The programs mentioned earlier become a platform for the innovation team to bring the business units and the investment teams. Luís reports that all these pieces fit together organically – as “we kind of like having this little mess around the innovation possibilities, because in the end, a bit of diversity and a bit of overlap is needed to do this well”.
“We don’t have a written book of rules for all this to happen.“
As a positive side of being forced to work remotely, EDP realized that it was easier to increase involvement of business units into online innovation meetings (as we encouraged all our clients participating in the online Scaleup Summits) – which had a positive impact also for investment deals.
“We involved a lot more of our business units in 2020.”
Involving different teams is part of EDP innovation’s strategy for demonstrating results. As every innovation team, Luís faces the dilemma of needing to show quick results but requiring 3-5 years of ecosystem development and internal structuring that enables success.
Startup programs are purposefully filled with C-level executives to involve them as much as possible, so they feel the energy of the communities and are convinced of their value.
“The foundation of internal innovation culture is people enjoying innovation related work”
Luís believes the added value from EDP innovation is in providing optionality: calibrating bets, balancing resources across technologies and solutions, demonstrating the benefits of spreading this risk through portfolio management.
What does EDP Invest In?
Regarding investment, EDP has been doing corporate VC since 2008 but 75% of the 30 investments so far happened in the last 5 years. With this experience, EDP is happy to lead investments, if necessary. The fund has 80 million of investment capacity with around 50% invested so far.
EDP has no geographic restrictions and the focus is on pre-series A, such as seed funding rounds, but series B is also possible. There have been a few exits so far, with EDP as an acquirer in some of the cases.
06:41 EDP’s Open Innovation Journey
09:19 Defining open innovation challenges
11:31 EDP Open data
13:23 Engagement with startups and business units
13:50 The hidden opportunity in working remotely
14:48 Synergies with the investment teams
15:55 Investment structure
18:57 Exits so far
21:26 Internal exits – EDP acquiring startups itself
24:02 Corporate VC journey
27:11 Open Innovation internal readiness
34:55 Developing an internal innovation culture
37:40 Measuring open innovation
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