Royal Dutch Shell, Mitsubishi and Johnson Matthey have set up a VC firm, Conduit Ventures, to invest in the fuel cell industry. The aim is for Conduit to raise a $100m [E116m] fund to invest in early stage businesses [post-start up]. The three firms are acting as cornerstone investors to the fund.
Conduit is going to be run by two ex-Schroder Salomon Smith Barney investment bankers: John Butt, a former director of European M&A and John Knight, a former managing director and head of the bank’s European oil and gas team. It will be based in London but expects to be investing globally, with particular focus on Europe and North America.
The company said that the aim was to invest in companies that have established fuel cell and hydrogen technologies and are seeking further capital for commercial sales and development. The expectation is to invest US$1-10m and to take stakes of 10-40 per cent in investee.
The current market for fuel cells is estimated to be worth about $218 million but is expected to increase dramatically as more energy hungry products require free standing power sources. The sector is forecast to be worth as much as $2.4 billion by 2004 and $7 billion by 2009, according to recent studies.