Total becomes the founding partner of the Cathay Smart Energy Fund

Girish Nadkarni (GN) / Technology today has completely democratized.

GN / China is not just a huge market but also a place that is driving innovation, so the combination of both, just like the US, makes it a market which we can’t ignore.

Bertrand de la Noue (BDLN) / China, as far as innovation is concerned, has a very high ambition (…).and especially on electric vehicles, on robotics, on artificial intelligence…

BDLN / You have many factors. The first one of course is the political drive from the highest level in China they are pushing for innovation. They are giving a lot of financial support for innovation.

GN / Change is happening so quickly that if you are not paranoid, if you are not constantly looking over your shoulder, you could be in danger.

BDLN / In the US you have one Silicon Valley, in China you have at least 3 Silicon Valleys. You have the Beijing hub, which is more into software, artificial intelligence. You have the Shanghai - Hangzhou area which is more about logistics and e-commerce with Alibaba being present there and you have Shenzhen (…) It’s the best place for hardware in the world. It attracts a lot of innovation hubs, companies, because they have everything at hand.

GN / Since we are an energy company, clearly areas relating to energy are of interest to us. So whether it’s smart energy, distributed energy, renewables, energy storage, things like that are definitely of interest to us.

GN / The mobility sharing area clearly becomes very important to us because that is going to change the entire ecosystem of how cars are used, manufactured. We want to keep an eye on that space and be involved in it. Nobody is sure how this will all pan out, which is exactly why the best way to execute is to take equity investments and to participate in there.

BDLN/ China is taking the lead. So for us it’s extremely important to follow that, to see what’s happening and to try to see how we can benefit from all those new companies involved in innovation.

At TEV, we are the crow’s nest, we sit on top, and we can look over the horizon and see what’s coming at us. Whether it’s new countries, new technologies or whatever, it could be opportunities, it could be risks.

GN / Really this is our foot in the door for the Chinese energy market.

GN / What we hope to bring to Cathay is our knowledge of technology and especially in the energy space, and because this is meant to be a club deal, a collaborative approach, we will guide them into areas of potential interest to us, areas we want to be involved in. And we expect this to be back and forth.

GN / We have chosen to take a barbell strategy, meaning two extremes: we want to invest most of our money in companies which have been significantly de-risked, meaning that they have customers, they have traction, they have actual paying customers so we know they won’t have to struggle for the next ten years to prove they are viable, but on the other hand, because we don’t want to miss some very interesting technologies which might be at an early stage, we will invest a certain amount in “seed stage” companies which are very, very early stage but have the potential to be highly, highly disruptive if they succeed. These are the two extremes we will focus our investment strategy on.