What does energy group EDP offer start-ups?

Maximising innovation while minimising risk through start-up collaboration

25 European Corporate Startup Stars reveals which large companies are doing the most to support new firms. These case studies highlight some specific examples of active and successful collaboration between corporates and start-ups.

A good example of…

Adaptive processes

European Headquarters: Lisbon, Portugal

Geographical reach: EDP operates in Portugal, Spain, Italy, France, UK, Belgium, Poland and Romania, and EDP Starter operates in Portugal and Spain

Sector of interest: Technology – cleaner energy (such as wind and solar power), smart grids, energy storage, energy efficiency, Internet of Things (IoT), big data, machine learning

Works with start-ups through:

  • Incubation and acceleration programmes, with a view to developing or co-developing technology solutions
  • Prototyping, using FabLab EDP
  • Pilot projects to test technologies in the ‘real world’ (for example, on wind farms, dams and power stations)
  • EDP Ventures, a venture capital fund of €40m, which has carried out nine investments
  • Sharing resources, such as co-working spaces
  • Three events per year
  • Expert mentoring from EDP managers

 

Why does EDP work with start-ups?

Working with start-ups allows Portuguese energy supplier EDP to scout for innovative technologies, solve technology challenges, expand in new markets and create an investment pipeline for EDP Ventures.

How does EDP work with start-ups?

EDP launched EDP Starter to crowdsource ideas from start-ups. The start-ups benefit from technological assessment, advice and mentoring, and a strong global network of other utilities and companies.

Furthermore, they are supported during the prototyping phase, through Fablab EDP, and pilots financed by EDP. Every year EDP Starter selects the best performing start-ups, which are considered for investment by EDP Ventures (with strong chance of co-investment from other venture capital funds).

Dealing with technological issues is a particular challenge for the energy sector, but EDP’s lean involvement with start-ups allows it to identify most failures at the pilot stage. This minimises risk, but also allows space for innovation. For example, Feedzai software, the first product to be incubated by EDP Starter, was tested in wind farms and later invested in, and by December 2015, its turnover had reached €20m.

What has EDP done to facilitate collaboration with start-ups?

EDP Starter takes start-ups working in the energy sector through a structured collaboration process – from the ideas stage to venture capital investment. Initially, it scouts for start-ups globally through universities, R&D centres, incubators, accelerators and cleantech competitions.

Seed Race, EDP’s seed capital investment initiative, also funds start-ups for the first few months of their business. Furthermore, EDP actively helps start-ups to fundraise, through its business angels and venture capital network.

As well as offering start-ups free resources to prototype ideas through FabLabs, EDP procures and invests in many of their products and services. For example, EDP Ventures, a €40m venture capital fund, focusing on cleantech, enables EDP to work with start-ups to enter new markets, create new business models and solve technological problems.

12 EDP interim managers devote 20% of their time to working with start-ups at all stages, and it typically takes less than a month for start-up suppliers to get paid – all of which helps to facilitate collaboration.

Success story: Feedzai

Feedzai was the first company to be incubated by EDP Starter. After the technology start-up expressed an interest in trying out their software, EDP decided to test it in one of its wind farms and was extremely impressed with its data processing capacity.

EDP Ventures then invested in Feedzai, and in December 2015 Feedzai’s turnover reached €20m. Feedzai now has 100 employees and is currently focusing on credit card fraud prevention, but also still works with several business units within EDP.

 

“EDP is really doing very well. Their interim managers programme is extremely innovative

Andy McCartney, Corporate Startup Stars judge

What can other corporates learn from EDP about working with start-ups?

  • An interim managers programme provides mutual benefit: it enables corporate managers to gain entrepreneurial experience, and brings knowledge, technical expertise and management skills to start-ups
  • Dealing with technical issues in the energy sector isn’t easy. Two lessons EDP has learned are:
    a) Don’t invest before a test (even if the test is expensive, it’s a worthwhile investment)
    b) Great teams with average ideas perform better than average teams with disruptive ideas
  • Internal processes and management structures can be developed to better suit start-ups – for example, introducing faster payments and targeted managerial support

 

What is EDP looking for from the start-ups it works with?

EDP is looking for innovative technology in the energy field in the following sectors: cleantech (wind, solar, smart grids, storage, energy efficiency, electric vehicles) and IoT, big data, machine learning.

Start-ups must be multi-disciplinary rather than pure technological, resilient and innovative. Scalability and internationalisation are basic requirements.

How can start-ups get involved with EDP?

Start-ups can apply for EDP Starter programme at any stage of development, whether this is idea, MVP or market-ready, through the website: http://www.edpstarter.com

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Image courtesy of SVC2UK CEO Summit 2015.

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 644104.

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