After Half a Year,
What is the Vision of JERA’s
CVC —JERA Ventures—
and What are its Unique Strengths?
After Half a Year,
What is the Vision
of JERA’s CVC
—JERA Ventures—
and What are its
Unique Strengths?
JERA Ventures was established in July 2023 as a corporate venture capital
(CVC) arm of JERA to make strategic investments totaling 300 million
USD.
JERA
Ventures stands
out among JERA’s other initiatives, but what are its aims and what are
its strengths as
its activities grow? We spoke to Ken Ohyama, a key figure in the launch
of the
initiative.
INDEX
What is JERA Ventures’ Vision?
As JERA’s CVC, what does JERA Ventures mean to JERA?
As JERA’s CVC, what does JERA Ventures mean to JERA?
JERA Ventures is a platform for JERA to work on innovative ideas and collaborate with startups. I could go a step further and say we’re JERA’s antenna, its laboratory, and its spearhead. Our role is to lead the journey to achieve the JERA vision.
JERA Ventures is a platform for JERA to work on innovative ideas and collaborate with startups. I could go a step further and say we’re JERA’s antenna, its laboratory, and its spearhead. Our role is to lead the journey to achieve the JERA vision.
What do you mean by “spearhead”?
What do you mean by “spearhead”?
JERA Ventures invests in startups with expectation on potential synergies. But synergies don’t necessarily have to be realized immediately, and we also take risks by investing in businesses that have future potential. Our role, then, is to take the lead in jumping into areas JERA Corporate cannot enter as matured businesses, to share what we learn, and to create synergies. That’s what I mean by “spearhead.”
JERA Ventures invests in startups with expectation on potential synergies. But synergies don’t necessarily have to be realized immediately, and we also take risks by investing in businesses that have future potential. Our role, then, is to take the lead in jumping into areas JERA Corporate cannot enter as matured businesses, to share what we learn, and to create synergies. That’s what I mean by “spearhead.”
What is JERA Ventures’ vision?
JERA Ventures’ vision is “empowering all individuals to pursue their visions, igniting their futures by harnessing sustainable, affordable and stable energy.” In other words, a world in which everyone has access to clean energy and can focus on realizing the future to which they aspire rather than worrying about securing energy.
JERA Ventures’ vision is “empowering all individuals to pursue their visions, igniting their futures by harnessing sustainable, affordable and stable energy.” In other words, a world in which everyone has access to clean energy and can focus on realizing the future to which they aspire rather than worrying about securing energy.
This fits in with JERA’s mission of “providing cutting-edge solutions to the world’s energy issues,” doesn’t it?
This fits in with JERA’s mission of “providing cutting-edge solutions to the world’s energy issues,” doesn’t it?
That’s right. There is a bit of history in reaching this concept. Before launching the CVC initiative, I’ve worked on projects aiming for decarbonization through carbon credit frameworks, on gas field development, and have experience in the M&A industry. Frankly, the primitive carbon credit framework was nothing but a redistribution of wealth from developed countries to developing countries under the guise of “reducing emissions,” and it didn’t have much impact to slow climate change.
That’s right. There is a bit of history in reaching this concept. Before launching the CVC initiative, I’ve worked on projects aiming for decarbonization through carbon credit frameworks, on gas field development, and have experience in the M&A industry. Frankly, the primitive carbon credit framework was nothing but a redistribution of wealth from developed countries to developing countries under the guise of “reducing emissions,” and it didn’t have much impact to slow climate change.
So, on its own, guise of reducing emissions doesn’t address the fundamental issue, then?
So, on its own, guise of reducing emissions doesn’t address the fundamental issue, then?
That’s what I felt. On the other hand, on gas field development projects, I saw a world in which massive amounts of capital and equipment were being used to develop natural resources, and where wisdom and technology were directed toward supplying the energy that supports people’s lives around the world and drives the future. And then from my experiences with M&A deals, I learned that companies can not only make growth by thinking about the future as a tomorrow that follows today, but also about achieving multiplicative inorganic growth through synergies that combine the strengths of different companies. At some point, all these experiences came together.
That’s what I felt. On the other hand, on gas field development projects, I saw a world in which massive amounts of capital and equipment were being used to develop natural resources, and where wisdom and technology were directed toward supplying the energy that supports people’s lives around the world and drives the future. And then from my experiences with M&A deals, I learned that companies can not only make growth by thinking about the future as a tomorrow that follows today, but also about achieving multiplicative inorganic growth through synergies that combine the strengths of different companies. At some point, all these experiences came together.
In what way?
Rather than simply negating the negatives by aiming to reduce emissions efficiently, what the world really needs is to create positive energy, by realizing people’s dreams, support their lives, and create the future with clean energy. That became the vision for JERA Ventures.
Rather than simply negating the negatives by aiming to reduce emissions efficiently, what the world really needs is to create positive energy, by realizing people’s dreams, support their lives, and create the future with clean energy. That became the vision for JERA Ventures.
So, you’re trying to combine creating positive energy, the need for decarbonization, and the realities of energy?
So, you’re trying to combine creating positive energy, the need for decarbonization, and the realities of energy?
That’s right. Energy use is the driving force for growth and for creating the future. I want to create a future that unleashes the full potential of this driving force. To achieve this, I think we need a multiplier effect between cutting-edge decarbonization technologies, their social implementation, and discontinuous growth that creates synergies between diverse companies.
That’s right. Energy use is the driving force for growth and for creating the future. I want to create a future that unleashes the full potential of this driving force. To achieve this, I think we need a multiplier effect between cutting-edge decarbonization technologies, their social implementation, and discontinuous growth that creates synergies between diverse companies.
And a CVC structure was necessary to realize that vision?
And a CVC structure was necessary to realize that vision?
The relationship between JERA Ventures and startups is not like that between a financial investor seeking capital gains and companies hungry for investment, but rather one of co-creation in which both bring their strengths together to create something new. Leveraging JERA’s network and assets has the benefit of being able to scale up the innovative ideas and technologies generated by startups, making them easier to mainstream at scale and have an impact on the world.
The relationship between JERA Ventures and startups is not like that between a financial investor seeking capital gains and companies hungry for investment, but rather one of co-creation in which both bring their strengths together to create something new. Leveraging JERA’s network and assets has the benefit of being able to scale up the innovative ideas and technologies generated by startups, making them easier to mainstream at scale and have an impact on the world.
A Unique Support Menu that
Opens Up Massive Assets
You mentioned that startups can leverage JERA’s assets, but could you elaborate a little more?
You mentioned that startups can leverage JERA’s assets, but could you elaborate a little more?
You mentioned that startups can leverage JERA’s assets, but could you elaborate a little more? JERA Ventures offers a menu of three kinds of support for startups. The first is providing a place to conduct pilots and demonstration testing when scaling up to the commercial level.The second is supporting operation and maintenance (O&M) for the use of huge facilities. The third is support for entry into the Japanese market.
You mentioned that startups can leverage JERA’s assets, but could you elaborate a little more? JERA Ventures offers a menu of three kinds of support for startups. The first is providing a place to conduct pilots and demonstration testing when scaling up to the commercial level.The second is supporting operation and maintenance (O&M) for the use of huge facilities. The third is support for entry into the Japanese market.
JERA has one of the world’s largest energy value chains, which we can open up to startups as a place to demonstrate their cutting-edge technologies. For example, new technologies involving chemical reactions or hardware may test well at labo or small scale but then struggle to replicate that success when scaled up to the commercial level. By offering our power plant facilities as commercial-scale sites for demonstration testing, we can support the final step needed to achieve mainstreaming. JERA’s thermal power plants are monster machines that use significant volume of energy and emit associated volume of CO2—completely different from experimental machines.
In addition to providing huge facilities, we can also provide the plant operation support needed for demonstration testing as well as materials such as LNG and hydrogen. In our O&ME department, we have master-class employees who know about their power plants more than anyone else, as well as employees with innovative minds and a keen interest in new technologies. By leveraging their skill and curiosity, I trust we can support the commercialization of innovative technologies.
When entering the market, compliance with Japanese energy regulations and the legal system is essential. As experts in this industry, we follow the law and can support—and sometimes drive—the introduction of new things to Japan. We can also become a buyer of startup products ourselves, as well as acting as a bridge to other companies.
Options can be broadly divided into (1) those
that help
improve performance
(optimization/efficiency) and (2) those
that remove factors that inhibit performance
(burden
reduction).
Example of (1): Solutions such as sleep
improvement
programs, etc.
Example of (2): Alleviation of menstrual
pain and menopausal
symptoms, etc.
The ability to use JERA’s equipment sets you apart from other CVC units , then?
The ability to use JERA’s equipment sets you apart from other CVC units , then?
A typical CVC unit provide funds, know-how, human resources, customers and so on, but not many also open up the commercial facilities and plants used by their main business. Often they deal in additional new businesses or in ancillary businesses that use the main business’s facilities and plants. As advocates of co-creation, what sets JERA Ventures apart is that we offer up our own assets as we seek to work together to grow both our core business and new businesses.
A typical CVC unit provide funds, know-how, human resources, customers and so on, but not many also open up the commercial facilities and plants used by their main business. Often they deal in additional new businesses or in ancillary businesses that use the main business’s facilities and plants. As advocates of co-creation, what sets JERA Ventures apart is that we offer up our own assets as we seek to work together to grow both our core business and new businesses.
About the Three Investment
Areas:“Decarbonize, Deliver, Support”
About the Three
Investment Areas:
“Decarbonize, Deliver, Support”
JERA Ventures has established three investment areas: Energy Transformation, Customer Centric and Corporate. What does each area cover?
JERA Ventures has established three investment areas: Energy Transformation, Customer Centric and Corporate. What does each area cover?
Energy transformation covers creating new technologies to form decarbonized energy -mainly technologies associated with hard wares needed for decarbonization. Customer Centric covers digital technologies that add value to the energy created through Energy Transformation and deliver it to customers. Corporate covers technologies that improves the workability and well-being of the employees who sustain JERA’s business.
Energy transformation covers creating new technologies to form decarbonized energy -mainly technologies associated with hard wares needed for decarbonization. Customer Centric covers digital technologies that add value to the energy created through Energy Transformation and deliver it to customers. Corporate covers technologies that improves the workability and well-being of the employees who sustain JERA’s business.
For Customer Centric, is your aim to develop technologies that address how to sell energy that meets customer needs?
For Customer Centric, is your aim to develop technologies that address how to sell energy that meets customer needs?
No, rather than taking a seller’s approach to thinking about how to sell energy, it means being responsive to customer needs. Energy Transformation is about developing the technology for decarbonizing energy—our product—to meet the demand for CO2-free energy. But succeeding in that task will be meaningless if it doesn’t also meet the needs of customers. It might make us feel smug, but won’t solve anyone’s energy issues. The Customer Centric area will utilize digital technologies to provide energy in ways that meet customer’s needs, tailor-made to resolve their concerns. We also harness that energy to serve as a source of added value to our customers' customers, or to create markets where customers can trade with each other directly, and to add various layers of value to energy itself.
No, rather than taking a seller’s approach to thinking about how to sell energy, it means being responsive to customer needs. Energy Transformation is about developing the technology for decarbonizing energy—our product—to meet the demand for CO2-free energy. But succeeding in that task will be meaningless if it doesn’t also meet the needs of customers. It might make us feel smug, but won’t solve anyone’s energy issues. The Customer Centric area will utilize digital technologies to provide energy in ways that meet customer’s needs, tailor-made to resolve their concerns. We also harness that energy to serve as a source of added value to our customers' customers, or to create markets where customers can trade with each other directly, and to add various layers of value to energy itself.
Your Corporate area seems unique. This area is focused on JERA employees rather than on companies around the world?
Your Corporate area seems unique. This area is focused on JERA employees rather than on companies around the world?
This area is for JERA employees. The reason is that they’re important colleagues who are indispensable for realizing JERA’s vision. Corporate aims to create a virtuous circle that enables employees to exercise their talents and be happier while working at JERA by providing options they can use to help them perform at their top gear.
This area is for JERA employees. The reason is that they’re important colleagues who are indispensable for realizing JERA’s vision. Corporate aims to create a virtuous circle that enables employees to exercise their talents and be happier while working at JERA by providing options they can use to help them perform at their top gear.
That you talk about “top gear performance” also seems unique.
At JERA Ventures, in addition to diversity & inclusion, we believe that creating a flat culture where everyone can speak their mind, be active, and create added value is essential for JERA’s future development and survival. We won’t be able to generate the necessary innovation or adapt to rapidly changing social needs using solution created under a culture of homogeneous values. That’s why we take a well-being perspective in investing in programs that optimize and improve efficiency to enable JERA’s employees to perform at their maximum or optimal level, and in technologies and products that address factors that get in the way of peak performance. This is the approach we adopted in September 2023 when we invested in the NEXTBLUE FUND II, a venture capital fund related to Femtech, which uses technology to solve women’s health issues.
At JERA Ventures, in addition to diversity & inclusion, we believe that creating a flat culture where everyone can speak their mind, be active, and create added value is essential for JERA’s future development and survival. We won’t be able to generate the necessary innovation or adapt to rapidly changing social needs using solution created under a culture of homogeneous values. That’s why we take a well-being perspective in investing in programs that optimize and improve efficiency to enable JERA’s employees to perform at their maximum or optimal level, and in technologies and products that address factors that get in the way of peak performance. This is the approach we adopted in September 2023 when we invested in the NEXTBLUE FUND II, a venture capital fund related to Femtech, which uses technology to solve women’s health issues.
So, the Energy Transformation area creates decarbonized energy, the Customer Centric area delivers the decarbonized energy produced through Energy Transformation, and the Corporate area supports employees working in these areas. This is the virtuous circle you’re aiming for, isn’t it?
So, the Energy Transformation area creates decarbonized energy, the Customer Centric area delivers the decarbonized energy produced through Energy Transformation, and the Corporate area supports employees working in these areas. This is the virtuous circle you’re aiming for, isn’t it?
Yes, of course. Cutting-edge products and positioning, market analysis and the ability to understand customer needs, employees who sustain the business as a whole—no project or company can succeed if any of these are missing. Our vision will only be achieved when all three of these factors come together.
Yes, of course. Cutting-edge products and positioning, market analysis and the ability to understand customer needs, employees who sustain the business as a whole—no project or company can succeed if any of these are missing. Our vision will only be achieved when all three of these factors come together.
The Keys When Making
Investment Decisions are
Playfulness and Integrity
Your website says you aspire to “become a sandbox for people who are serious about changing the world.” What’s the idea behind this phrase?
Your website says you aspire to “become a sandbox for people who are serious about changing the world.” What’s the idea behind this phrase?
We use the term “sandbox” in the sense of a testing
ground for trying
out various things. The expression incorporates the
following three
ideas:
1. A place where people can experiment with new,
never-before-seen
ideas rather than sticking to a predetermined
schedule or
prearranged plan.
2. A place where you can think outside the box and
tackle new
ideas.
3. A place where ideas come together to generate new
ideas, and
ripple out from there.
We use the term “sandbox” in the
sense of a testing
ground for trying
out various things. The expression incorporates the
following three
ideas:
1. A place where people can experiment with new,
never-before-seen
ideas rather than sticking to a predetermined
schedule or
prearranged plan.
2. A place where you can think outside the box and
tackle new
ideas.
3. A place where ideas come together to generate new
ideas, and
ripple out from there.
That sounds pretty loose for a straightlaced power company.
That sounds pretty loose for a straightlaced power company.
It shows our commitment to taking on new challenges. When people play, they take it seriously. And because it’s play, they feel comfortable testing their limits. This is critical because unless you take on challenges that do more than just extend what you’ve already done, you won’t make big leaps forward. I want to leverage outside-the-box ideas. I want to create something that has never been seen before. That’s what I want to do, and this kind of culture will be essential as a driver of JERA’s survival.
It shows our commitment to taking on new challenges. When people play, they take it seriously. And because it’s play, they feel comfortable testing their limits. This is critical because unless you take on challenges that do more than just extend what you’ve already done, you won’t make big leaps forward. I want to leverage outside-the-box ideas. I want to create something that has never been seen before. That’s what I want to do, and this kind of culture will be essential as a driver of JERA’s survival.
You’re saying it’s time to change the culture of power companies?
You’re saying it’s time to change the culture of power companies?
Well, I think traditional power companies in Japan have already taken on tough challenges. In the 1960s, we were the first in the world to introduce LNG for power generation, have steadily moved into upstream fuel development, and then expanded into fuel trading. Today, we’re transforming from a power generation company to an energy value chain management company. Taking on new challenges is already in our DNA. I want us to remember that, and to put it to use. To play, and to take it seriously. And if we’re going to do something, I think we ought to do it on a scale that will have a real impact on the world.
Well, I think traditional power companies in Japan have already taken on tough challenges. In the 1960s, we were the first in the world to introduce LNG for power generation, have steadily moved into upstream fuel development, and then expanded into fuel trading. Today, we’re transforming from a power generation company to an energy value chain management company. Taking on new challenges is already in our DNA. I want us to remember that, and to put it to use. To play, and to take it seriously. And if we’re going to do something, I think we ought to do it on a scale that will have a real impact on the world.
You said that integrity was also important to JERA Ventures. Why make this explicit?
You said that integrity was also important to JERA Ventures. Why make this explicit?
Integrity is an essential concept at the core of JERA Ventures’ activities. We dive into areas where the future is unpredictable, but what we can rely on in times of uncertainty are the colleagues who face the work before them head on, share our values, and drive forward to achieve our vision. In such an environment, relationships of mutual trust are critical.
Integrity is an essential concept at the core of JERA Ventures’ activities. We dive into areas where the future is unpredictable, but what we can rely on in times of uncertainty are the colleagues who face the work before them head on, share our values, and drive forward to achieve our vision. In such an environment, relationships of mutual trust are critical.
So, relationships of mutual trust are important because the risks are high?
So, relationships of mutual trust are important because the risks are high?
Building relationships of mutual trust requires us to act with integrity toward ourselves, our peers and society. Specifically, the values we place importance at JERA Ventures is: 1. Not to be overly afraid of things that you don’t know yet, 2. But think things through thoroughly, 3. Discuss things constructively, and 4. Be respectful of colleagues’ opinions. We established these four principles to foster trust among colleagues and act with integrity.
Building relationships of mutual trust requires us to act with integrity toward ourselves, our peers and society. Specifically, the values we place importance at JERA Ventures is: 1. Not to be overly afraid of things that you don’t know yet, 2. But think things through thoroughly, 3. Discuss things constructively, and 4. Be respectful of colleagues’ opinions. We established these four principles to foster trust among colleagues and act with integrity.
It all sounds rather emotional, but how do you make investment decisions?
It all sounds rather emotional, but how do you make investment decisions?
We have solid governance in place. When it comes to decision-making, you should never invest just because you hit it off with some start-up’s CEO without asking the questions you need to ask.
We have solid governance in place. When it comes to decision-making, you should never invest just because you hit it off with some start-up’s CEO without asking the questions you need to ask.
Still, it must be difficult to assess the potential of startups.
Still, it must be difficult to assess the potential of startups.
Investing in a business is generally about creating systems for generating profit and eliminating the uncertainties that lies both within and outside of such systems when they are put to work. With startups working in new fields, there‘s a lot of uncertainty, which makes it a difficult a optimal balance of taking risk and eliminating the uncertainty.. I believe both playfulness and integrity are important in order to create synergies that allows us to leap beyond today while still investing with discipline.
Investing in a business is generally about creating systems for generating profit and eliminating the uncertainties that lies both within and outside of such systems when they are put to work. With startups working in new fields, there‘s a lot of uncertainty, which makes it a difficult a optimal balance of taking risk and eliminating the uncertainty.. I believe both playfulness and integrity are important in order to create synergies that allows us to leap beyond today while still investing with discipline.
If You Really Want
to Change the World,
Come to JERA Ventures
What kind of people do you hope will join your team?
What kind of people do you hope will join your team?
People who share our commitment to changing the world. And since the challenges we face are not easy ones, it would be nice if they enjoyed them. The kind of people who enjoy being in a place with no path to follow, who leave their own path behind them. And since JERA Ventures is a sandbox, just like children at playgrounds, I’d like to generate the kind of chemistry that brings people together spontaneously to create new things, not only within the company but also with startup companies and outside partners.
People who share our commitment to changing the world. And since the challenges we face are not easy ones, it would be nice if they enjoyed them. The kind of people who enjoy being in a place with no path to follow, who leave their own path behind them. And since JERA Ventures is a sandbox, just like children at playgrounds, I’d like to generate the kind of chemistry that brings people together spontaneously to create new things, not only within the company but also with startup companies and outside partners.
What are the prospects for the future?
What are the prospects for the future?
We’re continuously evaluating potential investment opportunities as well as moving forward with demonstration testing of several technologies. In the not-too-distant future, we may be able to unveil investment to novel hydrogen and ammonia technologies that hope to fit with JERA’s main decarbonization strategy, as well as potential game-changing technologies that will astound the world.
We’re continuously evaluating potential investment opportunities as well as moving forward with demonstration testing of several technologies. In the not-too-distant future, we may be able to unveil investment to novel hydrogen and ammonia technologies that hope to fit with JERA’s main decarbonization strategy, as well as potential game-changing technologies that will astound the world.
So, you are also investing in other approaches in addition to JERA’s main strategy of introducing hydrogen and ammonia fuel?
So, you are also investing in other approaches in addition to JERA’s main strategy of introducing hydrogen and ammonia fuel?
Correct. It’s important, of course, to search for technologies that is essential missing piece to JERA’s strategy, but as a CVC unit we can also explore investments in disruptive technologies that compete with the main strategy. Our major objectives of decarbonization and achieving our vision are the same as JERA’s.
Correct. It’s important, of course, to search for technologies that is essential missing piece to JERA’s strategy, but as a CVC unit we can also explore investments in disruptive technologies that compete with the main strategy. Our major objectives of decarbonization and achieving our vision are the same as JERA’s.
As we wrap this up, do you have any closing message?
As we wrap this up, do you have any closing message?
Decarbonization will not be achieved overnight. And we can’t do it alone. We need to collaborate with startups. If you’re going to do something, why not do something that impacts the world? Let’s work together to create a world where everyone can use clean energy and is motivated to create the future. We’re a sandbox for people who are serious about changing the world. If you really want to change the world, please knock on our door. We look forward to seeing you.
Decarbonization will not be achieved overnight. And we can’t do it alone. We need to collaborate with startups. If you’re going to do something, why not do something that impacts the world? Let’s work together to create a world where everyone can use clean energy and is motivated to create the future. We’re a sandbox for people who are serious about changing the world. If you really want to change the world, please knock on our door. We look forward to seeing you.
Go To JERA Ventures
PROFILE
Ken OhyamaManaging Partner JERA Ventures
A native of Tokyo, with 25 years of experience in energy related investment and M&A. Joined JERA in 2019 after working at Tokyo Electric Power, Accenture Japan Ltd and GCA Corporation. As Head of M&A Execution and Strategic Partnerships, he led numbers of strategic M&A deals including the 2021 M&A with Belgian offshore wind company Parkwind. In the current position since 2023, he aims for a new future through co-creation with startup companies and others, driven by the desire to make tomorrow even a little bit better through innovative technology and creative business models.
