A year ago, the YPF leadership team undertook a trip to learn more about what was happening in the world in terms of innovation and energy.
For that, they decided to go to the entrepreneurship factory: the city of San Francisco, in the state of California, United States. During that visit, he finished maturing what the company had been planting for some time: his own venture capital fund. It's called YPF Ventures, which operates under two large vehicles:
- A bridge fund, called Argentina Energy Bridge, which works as a link between the place where innovation is generated and Argentina
- A seed fund, called YPF Early Stage Fund, which will seek to accompany local and regional entrepreneurs in their projects.
In dialogue with iProUP, its General Manager, Tomás Ocampo, details how the initiative works, from which the company plans to invest in a dozen projects per year, with a contribution of between $ 50,000 and $ 300,000. for each.
"The objective is to add innovation to the company, we know that in venture capital funds many projects fail, but those that work pay for all those that did not," the executive says.
The company saw that the world of energy was in transformation, hand in hand with the massification of electric cars and renewable energy increasingly cheaper. The passage through San Francisco was, in that sense, the breaking point that led YPF to take a new position regarding technological transformation.
"On that trip, we began to talk specifically about how we could begin to participate in that transformation and we came to the conclusion that a corporate capital fund could be an answer," says Ocampo.
In this regard, he clarifies that this is an initiative "very important for YPF, but relative in terms of numbers". He adds that, even if it is a small unit, "history shows that these innovative companies can modify whole industries and we want to be part of that impact".
Of course, YPF Ventures does not seek to cover all the verticals of the startup universe. The incubator finances projects related to:
- Energy, from hydrocarbons and biofuels, to renewable
- Mining, which includes the production, commercialization and development of lithium batteries
- Consulting in business related to energy
- Electric vehicles, from its manufacture to the sale of mopeds, motorcycles, bicycles and tricycles. Even stations and recharge centers
- Research, development, production and commercialization of technology, software, hardware, goods and services associated with any of its businesses
In this way, its president, Miguel Ángel Gutiérrez, aims for the oil company to achieve flexibility and agility to venture into different types of projects or partnerships, with capital injection.
This decision to open up to technology-based startups is not coincidental: during his tenure, the company was analyzed by Boston Consulting Group and held talks with professors from Singularity University, the most innovative study center in the United States, in addition to the aforementioned trip to San Francisco. The firm also had contacts with managers of the local technological unicorns who, coincidentally, worked in YPF.
One is Martín Migoya, founder of Globant, who signed an alliance with the state company to offer Big Data services. The other is Marcos Galperín, CEO of Mercado Libre, whose Mercado Pago solution is already accepted at 1,500 service stations for customers to pay from their cell phones.
Another motivating element is the thriving Argentine entrepreneur ecosystem, considered one of the most dynamic and successful in Latin America. Proof of this are the five unicorns born from the minds of local entrepreneurs.
"We believe that there is a giant seedbed in our country, Argentina has several of the best scientists in the world and prestigious research institutes such as Conicet, Invap or Balseiro", highlights Ocampo.
However, he warns that in Latin America "there is a lack of risk capital so that its professionals can move forward and that research has an impact on the world more quickly than in academia, using the strength of markets and creating companies that use that technology to reach people. "
For that reason, an important edge of the project is to point to the research institutes and the engineering schools, with a strong technical bias. Likewise, the developments to which it points should be based on what, they believe, will happen in the energy field in the medium and long term.
"As a general umbrella we look for energy projects, understood in a broad sense: from the electricity that reaches our homes to the one that moves us every time we go from one place to the other, or applied innovation in agriculture", explains the executive .
From the oil company they bet that, in the hand of the low cost of renewables and batteries, will go towards an increasingly decentralized energy world and the electrification of transport. According to Ocampo, the program also means a giant opportunity to bring innovation to YPF's core business.
In this sense, they consider that with new technologies and even a small impact on the company's current business, the financial performance in Vaca Muerta can be improved. In addition, potentially that also has an impact on the optimization of both financial and environmental operations.
How does it work
Ocampo reveals to iProUP that the fund has two purposes. On the one hand, that Argentina does not remain behind in innovation. On the other, there is a strong focus on empowering entrepreneurship, taking risks when supporting researchers and professionals in the generation of new companies.
"Many of these innovations are not happening in Latin America but in central markets such as San Francisco, Tel Aviv or China, so we try to identify those businesses that are already mature in other geographical areas but that do not yet exist here," he says. Ocampo
An example is the charging of electric cars. "For YPF, moving loads and people is a giant part of its activity, because more than half of the oil that is extracted ends up in cars and trucks, which is why we would like to participate in the electrification of these processes, something that is already happening in other developed countries, "he says.
In relation to the idea of ââadding innovation from the outside to Argentina, YPF has already signed a first agreement with Bird Technologies, a specialist in short-range electric mobility and one of the main drivers of the scooter phenomenon worldwide.
"We closed a small transaction for now but at the same time interesting, because it is estimated that 50% of mobility in cities is less than 6 kilometers, added to the congestion and the increasingly lower price of batteries, It will change the way we move in Buenos Aires, and this can have a giant impact on the YPF business. "
As for the local seed fund, it closed an agreement with Sustentator, an Argentine company founded in 2008 that follows the trend of energy decentralization: it installs solar panels in houses to make consumption cheaper and more sustainable. Through a capitalization agreement, the oil company will begin to provide services directly to the end customer "behind the meter".
The installation of this type of energy solutions in which the consumer is the one that generates its own energy, is a worldwide trend. In this framework, that agreement had been negotiated for some time, by the hand of Marcos Browne and Sergio Giorgi (two of the vice presidents of YPF).
"This company was the fastest growing company in the installation of solar panels in the country, and we believe that now, with our support in both capital and business integration, it will take an interesting direction," says the executive.
Regarding investment, a fundamental item since it is a state-owned company, Ocampo clarifies that a "very transparent process" was designed.
The step by step
"When the opportunity comes to us, and after they send us the introductory documents, we have a first call in which we talk to the entrepreneur to understand what he is doing, if it seems interesting and is within the sectors in which that we have been investing, we have a first meeting, "he explains.
The director general of the program adds: "We quickly analyze the opportunity, if it makes sense in our eyes and we see the potential of being a big business." Then we make the so-called "investment memo." That is, we put in writing what we think of the company, both conceptually and financially, and we add how YPF can help her. "
Finally, all this is presented to an investment committee made up of vice presidents of the firm, who approve the projects. The fund is designed to work in the same way as a traditional venture capital fund.
From YPF argue that they seek to add value to entrepreneurs, but without becoming a majority of the companies. They are the ones who make the decisions and carry out their business. "We contribute capital and we are always attentive to help them, but those who carry out the plan are the entrepreneurs", confesses Ocampo.
The transformation of the energy industry is already under way and YPF did not remain quiet: in an increasingly dynamic innovative ecosystem, it made the necessary movements to adapt to the coming times.
"I believe that our country not only has a giant potential, but also a fantastic present, it is also true that where it is difficult to innovate or create companies is in the sector in which we are entering, that of energy. There is only US $ 2 million per year in venture capital for this segment, which is less than 3% of the region's total, "the executive warns.
"If you think that energy companies require more capital because they use hardware, batteries, cables, pipes, etc., it is very difficult to leave the academy to the world, so that is where we are entering and trying to generate transformation. generate this path and that other investors can join, "concludes Ocampo.
