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Interview:

Bella Zhang of Plug & Play

We spoke with Bella Zhang of Plug and Play Tech Centre ahead of the Future Energy & Tech Investment Forum on March 27th, at PwC Innovation Centre.

Bella Zhang is the Head of Plug and Play’s Energy & Sustainability Program in China.

Plug and Play is one of the most active early stage investors and largest global innovation platforms. Since its launch in 2016, Plug and Play’s Energy & Sustainability program has run three batches in its Silicon Valley headquarters. The program also invests in variety of startups and connects them with corporations such as Cepsa, DCP Midstream, Dominion Energy, EnerjiSA, Linde Industrial Gases, Osaka Gas, Pacific Gas and Electric Company, Siemens Power and Gas, Tokyo Gas, and Uniper.

Bella received her master’s degree in Chemical Engineering with a designated emphasis in product development and new ventures from University of California, Berkeley, and her Bachelor of Engineering in Chemical and Bio-product Engineering with minor in Business Administration from Hong Kong University of Science and Technology. She holds the Chartered Alternative Investment Analyst (CAIA) designation.

Q: Hi Bella, thanks for chatting with us. Tell us a bit about Plug and Play. How many startups have been through the Plug and Play program? Are these mostly energy based?

A: Plug and Play is a global startup ecosystem and venture fund specializing in the development of early-to-growth stage technology startups. Since inception in 2006, our program extends worldwide through established programs in Europe, South America, and South-East Asia. With over 200 corporates and investor partners, Plug and Play is an open innovation ecosystem that has helped over 3,000 startups. At any given time, 350 startups work from our HQ in Sunnyvale, California. Our portfolio has raised over $5 billion in funding with over 100 successful exits to date. Among all of these cases, about 100 startups and 10 investments are energy-based.

With the aim of becoming a close innovation partner for corporates, cities, governments, universities and talents, Plug and Play China was launched in 2016 in Beijing. Currently included Beijing, Plug and Play China has 4 regional hubs with different target verticals. Our program has covered 22 cities in China for helping startups. By the end of 2018, under 10 introduced verticals, 118 startups has accelerated with 65 corporates on our platform, and 42 new corporate partners joined us. To build our business in an innovation ecosystem, we also held over 200 events in the past year and 193 corporates-startups dealflows. Through introducing of resources, talents and capital to the innovative ecosystem, the system achieve sustainable operation and rapid development.

Q: What are some of the key elements that PNP looks for in an energy startup?

A: We hope to find startups with established industry or academic backgrounds, leading to unique technologies and profitable business models. We have seen some startups truly understand the core needs of energy companies by showing us their sophisticated strategic plans and deep understanding of the industries or sectors they serve. A comprehensive business scope is crucial for both startups themselves and corporates partners.

We do not expect every startup to be perfect, but we want every startup to be unique, no matter whether they are unique in product and technology, in the team background or in business model. In China, we have seen a lot of startups that offer the similar solutions. We like to choose the one with some unique characteristics. We also hope that startups will have a clear target market or customer, so their products and technologies can be applied to the most suitable scenarios. Some technologies and products are not perfect, but they can be applied in a scenario where the product suits the best.

Q: Energy Trading seems to be one piece of the energy sector that startups are focusing on. Does PNP see this as a large market? Tell us about some of the energy trading startups in your incubator.

A: VoltCat (伏特猫) is one energy broker we have in our portfolio. We made this investment back in 2016 and always believe in the potential of energy trading market. This market will develop with the restructure of our energy system leading by the State Grid and government. Currently energy trading is happening between large corporations and power plants owners with energy brokers. We have already seen a lot of new business models and technologies being applied by energy brokers. We expect to see more energy trading happens later in the energy distribution system. By that time, current customers will be the suppliers of power.

Q: What are the challenges facing the energy tech companies in getting their solutions to be adopted?

A: In China, the energy industry is dominated by large state-owned enterprises. We have seen some excellent technologies and companies in the market who lack good channels to connect with energy companies. Because of the lack of channel, some advanced technologies have not found an application scenario suitable for it. There are also some technologies that perform well in small-scale or pilot-scale tests, but the team lacks the ability to scale them up.

On the other hand, due to the relative monopoly of the industry, some large enterprises lack the motivation to explore and understand new technologies, and innovative technologies are slowly promoted within the enterprises.

One of Plug and Play's main tasks is to provide these startups the channel to reach large corporations, while educating and helping large corporations with external innovation solutions by showing them the potential value of innovation. Every year, we provide a large number of events to startups and large corporations for communicating, and expect to see more technologies can be adopted after these events.

Q: Where does PNP see most of the potential in the energy markets? Is there opportunity in established markets (Australia, US, Europe), or does most of the potential exist in the emerging markets (Philippines, Malaysia, Vietnam etc.)?

A: We are excited about the innovation happening in different stages of energy value chain. In China, this year we are especially focusing on digital transformation and energy storage.

We believe there are opportunities in both established and emerging markets, although the focus areas are very different. The energy use almost stays constant in OECD countries but grows at 5% annually in developing countries because of the economic development and population growth. At the same time, the per capita energy use in developing countries are still much lower than that in developed countries. We see tremendous opportunities in developed areas such as energy trading and management, energy efficiency and cybersecurity, at the same time looking for innovative solutions targeting developing areas such as small-scale generators, solar cookers and micro-grid.

Q: What does the next 5-10 years look like in the energy tech space?

A: In the future, we think energy will be effectively free due to the cheaper renewable energy, cheaper storage and cheaper data analytics, and the dynamics of the energy industry will be changed. Energy-as-a-service will be a major trend in the market. More profits will be generated from energy as a service (EaaS) along the value chain.

To find out more about Plug and Play you can check out their website and Linkedin page.

Want to hear more from Bella? She will be part of one of the panel discussions at the Future Energy & Tech Investment Forum at PwC Innovation Centre in Shanghai on March 27th, 2019.

To register at YooPay (China): https://yoopay.cn/event/fetiforum

To register at EventBrite (Outside of China): click here

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