Getting started in Corporate Venture Capital: an interview with Sasol Ventures

Last year, Sasol Ventures chose to partner with Emerald through a Corporate Venture Capital-as-a-Service mandate. The mandate was created to help Sasol advance its transition away from fossil fuels via collaboration with innovative startups. In this interview, we spoke with Nicole Wainer and Sven Godorr, the leaders of the Sasol Ventures Team, about their innovation journey and their key learnings upon entering the Corporate Venture Capital (CVC) space.

What was the catalyst that led Sasol to seek innovation outside of the company?

Nicole: As we progress on the sustainability journey, the breadth of the technology we need for our existing operations and new businesses requires more than just our internal R&D focus. So, the main reason we went down the venture route was to access and monitor development of technologies that we may not wish to develop in-house.

What options did Sasol consider when looking at different strategies to access this kind of innovation?

Nicole: There is the model of doing everything in house and creating a full venture arm similar to what some of the other bigger corporates have done. On the other hand, there was a recognition that this is not exactly something that we’re familiar with. It’s a very new world. It’s a different way of working. So the model that we ultimately went with is one where we lean very heavily on Emerald. Then we get to access all of that expertise without building a large in-house function. This brings the ventures lens to the company’s innovation activities.

And why did Sasol choose Corporate Venture Capital-as-a-Service (CVCaaS) and Emerald as a partner in the end?

Nicole: We’re not used to working with startups. So we wanted to partner with someone that could bring that breadth, those resources, to assist us on the journey and help us get some of those skills into the organization. Emerald has a very unique offering in terms of allowing us to remain in control of the decisions, to really focus the investments to our strategy, and to provide us with the expertise, knowledge and experience to make it a success.

So Emerald was unique compared to what else you saw when you looked around.

Nicole: Yes, exactly. I think there’s lots of funds offering investments into their fund, and they will give you some access into the startup world. But I think the ability to control it and tailor it for our strategy in accordance with what we need at any time is the unique piece that we really like about the Emerald offering.

It’s been over a year of partnership between Emerald and Sasol. With regard to CVC, and CVC-as-a-service specifically, what are the key learnings that you’ve acquired? Is there something you wish you’d known at the outset or done differently?

Nicole: Defining the investment strategy was part of the journey that we didn’t realize needed as much attention before we started. It really took some work to get into what are the needs of the various businesses and how to structure that into something sensible for an investment focus.

Sven: I must confess, I didn’t realize that internal collaboration and alignment was such an important component and required quite as much work as it did. It’s about taking opportunities to people and facilitating the process and making sure that the opportunities find traction. Because colleagues are busy and sometimes you annoy them because you’re adding to their work and bringing in discomfort. But you must continuously find a way to do that with the correct people in the organization. You find that some people are open to this and others less so. Finding those connections into the organization, has been something that I underestimated.

Nicole Wainer, Commercial Lead Sasol Ventures, and Sven Godorr, Technology Lead Sasol Ventures

Are there any existing start-up collaborations you’d like to highlight here?

Sven: We’ve got one or two opportunities where we have established material exchanges. And people are saying, send us samples or can we send you material, for instance. This is gratifying. But for me, it’s been important to firm up the landscape of where we want to focus and will find traction.

Some of the Sprints we’ve done with Emerald have really played into understanding an area, understanding who’s playing in the area, what are the key things that people are working on, what is important, what are the main metrics, the main factors that define success or a successful technology or successful startup in a given space. For instance, what is important in something like direct air capture? What is important in something like plastics recycling? What are your alternatives? What are people wrestling with? Then getting that overview, that knowledge shared within the organization to help the organization make better choices. Even if they end up not going with one of the startups, there’s so much you can learn from having those discussions with people. Using that as a basis just for the intelligence component is extremely helpful.

What would you tell other industrial organizations that are considering adopting CVC, particularly for sustainability and decarbonization?

Sven: Have a clear strategy. One can very quickly get lost and not have focus. It’s very easy to spend money, but you need to be purposeful about where you’re going with your efforts. When the organization also buys into that strategy, you have defined a playing field in which you can work. Then the other thing is to try and involve other people from within the organization in the process. There are a lot of people who find it fascinating. They really enjoy doing the work, you get a lot of support, and you start generating the buy-in that’s needed to have an impact in the organization. Your strategy isn’t just a document, it’s something that gets talked about and then influences the whole process. It needs to become a living thing rather than just words.

You mentioned the possibility of establishing innovation hubs where startups can test their technology at Sasol plants. Are there any updates there?

Nicole: This is still on the cards, both in South Africa and in the US primarily. That said, we would still say Sasol’s operations remain a good place for a startup to come and test what they’re doing in an industrial setting. So, we have that ability. And it would be great if those activities within the organization took off because it would complement what we do.

Sven: You have to resource that in a way. You have to provide the infrastructure, the interfaces to allow this thing to work. That resourcing is something that we need to commit to and appreciate that we have to commit over a period of years so that it can actually grow and flourish.

Are there any other technology sectors that you’re following or anything on the horizon that looks promising?

Nicole: What I find interesting is that we are starting to see which areas the volume of deals come from. For parts of our strategy, it’s tougher to find deals. And in others, there’s an oversupply, even though it may not be our highest priority. For instance, carbon offsets are a big area. Other technology areas, like direct air capture, we are just starting to get a sense of what are the categories of development and what is most interesting to us within those categories.

Sven: We really like Max’s (our main energy specialist from Emerald) guidance as well. He reminds us not to forget about things like software and tools which can help to optimize, to monitor, to report, to make things visible. So that’s something that has grown in our awareness. We spend more time on it now than we did previously. And then there are other elements which are peripheral – energy generation rather than just energy transformation.

But our strategy is already relatively wide, and it was intentionally done that way. I think there was a good debate which we had at the beginning, which said why the strategy is so wide. If your fund can only allow a certain number of investments, you’ll never be able to cover that strategy. And at the time, Markus (CTO at Emerald) made the point to say, but remember, this is where you look for startups, this is where you learn and find collaboration opportunities. So you’re gathering intelligence and learning your innovation potential in the beginning. You want to be as wide as possible. In the end, you can still focus more once you’ve made clear priorities within that strategy. But the importance of keeping it wide is that you are open to many inputs and a broad spectrum of ideas. Then we’ll focus later on, when it comes to actually making the investment decisions.

And in two or three years, where do you hope to be?

Nicole: We’re hoping to have a solid portfolio that’s starting to build up with investments in some of our key priority areas. We also hope to have actioned some collaboration activity between Sasol and the startups. We don’t yet understand how difficult that is and how to get that right within the bigger corporation.

Sven: And I’d like to have the reputation within the organization of being relevant, useful, practical. All of those elements must be working so that we are regarded within the organization as a kind of go-to place that people like to go to get ideas. Or they can drop ideas with us. That’s a fertile, productive space that’s fully integrated into the organization, that people say, “this is fantastic.” We’d also like to have a reputation within the startup community as being…

Nicole: Diligent.

Sven: Diligent, technically astute…

Nicole: Patient.

Sven: And supportive, you know what I mean? And honest. That we provide our feedback, that it’s clear as to why we make decisions, and that people also enjoy working with us.

Learn more:


What is CVC

CVC and sustainability

Open innovation