UK leading energy supplier hunts for Israeli tech in bid for competitive edge

Centrica Innovations, a unit of the largest energy provider in the UK, is on the scout for Israeli technologies that can help expand the scope of products and services it provides customers. The tech push comes as the owner of British Gas faces growing competition in the industry and is witnessing a transition of consumers to online services.

Company officials are currently in Israel, meeting with local startups and making Startup Nation one of its first stops for a £100 million ($140 million) fund it set up in September.

“We see Israel as a real concentration of both entrepreneurial talent and technology talent,” said Jonathan Tudor, director of Technology & Innovation Strategy at Centrica Innovations, the innovation arm of Centrica Plc, a British multinational utility company with £28 billion in revenues in 2017. The company said in February it plans to cut an additional 4,000 jobs after profits at the group fell 17 percent.

“As technology evolves it changes our lives, and part of my team’s work is to understand and predict what those problems are going to be. And then develop and build new services to meet those challenges,” Tudor said in an interview in Tel Aviv on Wednesday.

Centrica, which has been operating since 1812, supplies energy to homes in the UK via its British Gas unit, as well as to homes in North America under the Direct Energy brand.

The firm also has a connected home business, in which it provides households in the UK, Italy and North America with connected home devices, software and services, including home energy management tools and home automation appliances.

Centrica Innovations was established in 2017 to invest in new technology and ideas, seeking to collaborate with innovative companies around the world and searching for new technologies that can be used at homes and businesses. Its key fields of interest are distribution of energy, electrification of transport and increasing connectivity through data, blockchain and the Internet of Things, explained Tudor, an Oxford university graduate and a former managing director of BP Ventures – Mobility.

Centrica’s first investment in Israel was the acquisition in 2015 of  Panoramic Power, a wireless sensor technology company.

“Panoramic power has been fully integrated into our distributed energy and power business,” Tudor said. The company is now “ready to do more” and is looking for additional partners to work with.

The new £100 million fund will scout for technologies in Israel, Europe and North America over a period of four to five years, Tudor said. The lion’s share of the fund still needs to be invested, he said, and there is no specific amount earmarked for Israel.

Disproportionate number of Israeli startups in the pipeline

“We get how important Israel is in the ecosystem of entrepreneurship and innovation and technologies,” he said. The pipeline of companies they are looking at in Israel represents a “disproportionately high number” considering the size of Israel when compared with the US and Europe.

Centrica Innovations is already “very close” to completing an investment in an Israeli startup that develops software to optimize the convenience of charging electric vehicles. “We are still in discussions,” he said. So one of the fund’s next investments “is likely to be in Israel.”

The fund invests in startups for the purposes of integrating their technologies into the Centrica group — as in the case of Panoramic Power — or partners with them when they are at very initial stages, and helps them test out the technologies at their various sites and units until they become big enough for investment, he said.