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BP Ventures in China – “I don’t expect to find limitations.”

Updated: Dec 17, 2018

I enjoyed speaking to Jin Hu, BP Ventures’ Shanghai-based China Lead, about how she is

re-adapting’ to her country of birth after 16 years in the UK. She sets out also the strategic rationale behind BP’s $10m backing of NIO Capital and pledges to demonstrate value to venture investors in China, which in her opinion is the “best market to trial new technologies.” Jin will be speaking at the GCV Asia Congress in Hong Kong on September 20th, where I will be moderating a session on advanced mobility and energy. Please come and join us.

How does it feel going back to China after so long in the UK?

I have been happily living in the London-centric ‘global citizenship bubble’ for the last 16 years. The UK is very international and BP is very inclusive and diverse. China is of course no less global in its outlook, but it has a different feel and a very different tempo. For non-Chinese corporates to venture there, it requires adaptation to the local culture. And yes, even though I was born in China, I feel that I now have to adapt or perhaps ‘re-adapt’. I am walking this journey with a BP Ventures’ hat on.

How? What is BP Ventures’ approach to China?

BP is of course known in the energy sector in China and enjoys a good reputation. So, it’s not as if we have a standing start. Globally, BP Ventures has a reputation for creating strategic value as a corporate VC, but we need to demonstrate our value to China. This is true for any corporate VC operating in any part of the world, but I think it is particularly true in China because the local VCs are so active and it’s so difficult for non-Chinese investors to get to the table to see the best deals. One of our first investments is in NIO Capital, a Chinese venture company that shares our focus on mobility and advanced energy transition. This is an important step for us.

What’s the rationale for your investment in NIO Capital? And what strategic value do you bring?

NIO Capital’s roots are very interesting. First, there was NIO, a very successful Chinese car company that was backed by leading Chinese VCs. NIO’s founder, William Li, had previously built a very successful internet company, which he took to IPO in the US. So, he brings a fresh perspective to mobility. And now he has founded a venture firm, NIO Capital, which I believe extends this fresh approach to investing in start ups. By the way, I’m not saying that the traditional OEMs have less to offer. They have plenty to offer, and we hope also to collaborate with them. Right now, there’s a good fit for us with NIO Capital. It shares the same focus on the new energy vehicle ecosystem, including advanced mobility and smart energy. Their management team includes individuals with strong experience and background. We can be an effective partner to them. In addition to capital, we bring knowledge and experience of energy and advanced mobility from around the world. We can also give Chinese businesses a platform to expand outside of China.

Are you looking at direct investment opportunities?

Of course. We are filling our pipeline and are working on a number of deals we expect to close soon. Our first investments are likely to be in early stage companies in the new energy value chain rather than in completely new ground-breaking technologies. We will also be supporting incubators, so we can get an early view on potential investments. This year, we sponsored the 2018 China Cleantech competition run by TusStar, one of the most well-known networks rooted in TsingHua University, together with ADB bank. Besides its financial sponsorship, BP Ventures also brought a new set of exciting start ups and Chinese VCs to the launch event. Overall, our venturing in China will be like the approach that BP has taken in other parts of the world, where we have developed relationships with great local venture and incubator partners, and where we make direct investments.

Why is BP ventures now prioritising China? Some non-Chinese corporate VCs are already active there. Others have yet to arrive. Why is now the right time for BP?

There is a lot of passion and energy in China and new firms can really turn the ‘impossible’ into the possible, which I guess is what venturing is all about. Chinese consumers are very receptive to new ideas. Entrepreneurs can quickly test technologies and business models, and move forward. And the Chinese government is very supportive of innovation, particularly in our priority areas, low carbon energy and advanced mobility. In my opinion, China is also the best market to trial new technologies from anywhere in the world. Europe and the US are less open to disruption through rapid adoption and scale up. Of course, I could be biased!

China tends to divide opinions in the venturing world. Many are still wary. Why is this do you think?

Opinions on China are changing. I heard some VCs describe how easy it is in China for entrepreneurs as it is a lot easier to access money, while others see it as a very difficult environment. The truth is that some VCs came here and didn’t spend enough time learning and adjusting to the local culture and environment. BP is not going to make this mistake.

What are the long-term plans? You’re BP’s first venture appointment in Shanghai. Will there be others?

Yes, we will be growing the team, expanding our footprint in China, especially in Beijing and Shenzhen. We have to. I don’t expect to find limitations in China. If we can’t do enough deals it will be because of us, because we’re not adaptable, agile and fast enough or because we can’t make our value proposition relevant in this market.

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