Veolia Hits the Accelerator for Cleantech, Calls for Startups to Jump On

French Environmental Services Firm Launches Innovation Incubator

NanoH20, a four-year-old startup that spun out of nanotech research at UCLA, could be deploying thousands of its membranes in desalination projects all over the world in the near future. The company was tapped late last year by giant French environmental services provider Veolia to participate in a five-year pilot test of its membrane under various seawater conditions. If the membranes deliver the cost savings they are expected to, Veolia will be looking to install them on its future water projects.

It sounds like a great deal for any startup, but at last week's Cleantech Forum in San Francisco, Veolia Senior Vice President of Research and Innovation Philippe Martin called it simply "opportunistic."

"We need to do more," he said in a keynote address at the forum. "We need [to do] much more. We need to team up and partner. We can provide them with scale-up opportunities."

That's when the venture capitalists and startup CEOs in the crowd sat up and took notice.

Philippe went on to announce the launch of his company's Veolia Innovation Accelerator (VIA) program, through which it will be actively looking for companies with products and technologies it can use it is water, waste, energy and transportation management businesses. That means everything from companies that make sensors to detect contamination in water supplies to companies working on energy storage for the grid to companies looking at innovative ways to turn waste into new and useful products.

"The main research areas supported by VIA are bio-resources, water and wastewater, waste sorting, recycling and recovery, sustainable and green cities, energy generation and optimization, transportation, health and environmental performance, carbon capture and storage, and energy storage," explained Marie-Anne Brodschii, the company's vice president of innovation.

If that sounds like a list of all the areas the average cleantech venture capitalist would be interested in, that's at least partially due to the role The Cleantech Group played in helping Veolia to conceptualize and design the VIA program. VIA is illustrative of a new direction for the group, which has traditionally been focused on conferences and is now broadening its focus to include customized research and consulting for large companies looking to connect with cleantech innovators. As an advisor to Veolia, The Cleantech Group helped the company figure out which sectors to get involved in, who the innovators are in those sectors, and how to go about connecting with them.

So far, the response from both start-up companies and venture capital investors has been great, according to Brodschii, who says some companies have already directly registered on the VIA site and that venture capital firms have brought opportunities to Veolia's attention as well.

With 850 scientists, researchers and engineers working in the company's new Research and Innovation unit and 10 full-time staffers responsible for interfacing with potential partners, Veolia is clearly serious about forming real partnerships that benefit both its customers and its partners.

Brodschii says the plan is to secure four partnerships in 2010 and triple that to 10 or 12 partnerships in 2011. After that, she says the program will be adjusted and refined according to the company's experience with it in its first two years.

"The point is not the quantity but the quality of the fit between the start-up and Veolia's present and future requirements," she says.

From a start-up's point of view, such a partnership could be a big boon, providing not only a big name to brag about in press releases, but also a way to get its technologies and products into the market place and tested in a credible way.

The Veolia program is along the lines of other successful partnership programs at companies like IBM and Johnson Controls, both of which have partnered with dozens of cleantech start-ups over the past several years on projects related to smart grid, energy efficiency and storage, retrofits and, in IBM's case, water, said Cleantech Group Vice President Greg Neichin. The key to success for these companies, and for Veolia, is that they're service companies.

"As a services company, Veolia is a good onramp to areas that are hard for startups to break into and are not a competitive threat in terms of being a tech company looking to encroach on their territory," Neichin explains.

It also helps that Veolia is staying open to multiple types of partnerships, and taking each company on a case-by-case basis.

"There's no dogma on the kind of partnership Veolia will build: from co-development of technology, to sales and marketing agreements, pilot testing and technology deployment," Brodschii explains. "Each agreement will be specific according to Veolia requirements and the start-up's development phase and requirements."

The company is also open to partnerships with start-ups at varying stages of development, a fact that has venture capitalists as excited about the program as start-up CEOs are.

"We see urbanization as one of the most important global trends with huge implications for water, power, transportation and waste management. Veolia is uniquely positioned to address these needs around the world, which is why several portfolio companies of ours have a unique opportunity to partner with Veolia," said Ajit Nazre, partner of Kleiner Perkins Caufield & Byers.

As for whether Veolia may be looking to acquire some companies through its accelerator, Brodschii doesn't totally rule it out.

"We don't prohibit ourselves from buying companies but this is not the main purpose," she says.

 

See also:

Corporations: The Latest VCs to Get in on Cleantech?

Climate Change Could Bring Water Bankruptcy With Grave Consequences

Water Scarcity Becomes a Growing Business Risk

 

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