In today's world of swift technological progress and rapidly changing market dynamics, businesses are under increasing pressure to grow and stay competitive. Traditional innovation approaches, such as building internal R&D capability, are sometimes not enough to maintain a competitive edge, and many companies are adding in-house venture capital (VC) capability. This means establishing a corporate venture capital (CVC) arm or dedicating resources to invest in startups with potentially far-reaching ideas and innovative technology.   

What's a startup?

While traditional R&D departments are valuable, they can be limited by existing organisational structures, priorities, and resources. In contrast, startups can operate with agility and concentrate solely on innovation. By collaborating with startups through a CVC arm, companies can harness this nimbleness and ingenuity. 

In 2020, BHP created a dedicated venture capital fund to invest in technology and startups that share our vision to pursue a lower GHG-emission future. BHP Ventures was born out of a need to identify, and invest in, game-changing technologies via emerging companies to help drive innovation and more sustainable ongoing growth within BHP.  

We believe collaboration is key to solving some of the world’s energy and decarbonisation challenges, and we are committed to working with startups that share our passion for impact.  

We also understand startups face significant obstacles navigating the complexities of the market we operate in, which is why our Ventures team provides more than funding. An investment from BHP unlocks access to technical experts, assets and strategic guidance that can help a startup build solutions the industry needs. This can provide a competitive advantage, helping accelerate their growth. 

But what exactly is venture capital?

Larger companies have long seen value in investing in external startups but in the past have sometimes struggled to get it right. In the late 1990s for example, there was a rush for corporates to invest, followed by a quick retreat as the economy changed. These shifts led private venture capitalists to view corporate VC efforts sceptically, citing their inconsistency and some high-profile failures. 

Fast forward to 2020 when we created BHP Ventures, innovation had become instrumental to the success of economies, at macro and micro scales, and has continued to be so. According to the Global Venture Capital Outlook by Bain & Company¹, global venture capital funding increased by 5% quarter over quarter in the second quarter of 2024, reaching $94 billion across 4,500 deals. This marked the second consecutive quarter of growth following a year of decline. Investments in AI, healthcare, and financial services were the primary drivers of this activity. 

The map below shows the most innovative countries ranked by World Bank income group and includes overall ranking. Based on the WIPO Global Innovation Index, the ranking weights variables like R&D, venture capital, and high-tech production. The BHP Ventures framework enables BHP to maintain connections in the world’s most innovative countries by fostering partnerships and investing in emerging technologies that align with their strategic goals.  

Why have an in-house VC team?

The main reason to develop in-house VC capability is to promote innovation. Startups can lead the way with technological advancements and disruptive business models. By investing in or acquiring these types of businesses, larger companies can gain access to groundbreaking technologies, novel business models, and fresh ideas that may be absent within their own corporate structure.  

In the four years since inception, BHP Ventures has invested in over 20 emerging growth companies, with around two-thirds of its investment spend supporting delivery of BHP’s climate change goals and targets. 

BHP Ventures investments include: 

• KoBold Metals, a world-leader in applying advanced artificial intelligence to geoscience 
• Electra, which is developing technology to produce electrolytic iron using renewable energy  
• Boston Metal, which is pioneering the use of electricity to transform metals from a raw oxide form into high-purity molten metal products, with the potential to enable more efficient, less costly and more sustainable steelmaking 
• Jetti Resources, involved in catalyst copper extraction technology that may unlock low-grade previously uneconomic copper resources 
• Ceibo, which is developing novel leaching technology to improve copper recovery rates and reduce waste  
• Plotlogic, which has developed a hyperspectral imaging technology to improve knowledge of orebodies in real time 
• Antora  Energy, which is developing an innovative electrothermal technology for long-duration energy storage, and  
• Allonnia, a waste remediation company using biology and advanced technologies to reduce environmental impacts from heavy industry.

BHP Ventures investments include: 

• SiTration, which is developing a silicon membrane-based technology for low-cost recovery of critical minerals in mining, refining and recycling, and  
• ZwitterCo, which is developing membrane solutions for the treatment of water. 

Corporate venture capital: a catalyst for market intelligence and insights

Investing in startups provides companies with valuable insights into emerging trends, technologies, and consumer behaviours. Startups can represent the forefront of market shifts, and, by investing in them, companies can gain critical intelligence about future market directions.  

Such intelligence can inform strategic decisions, ranging from product development to marketing strategies, and help identify potential threats and opportunities ahead of competitors, offering a competitive edge in responding to market changes. By investing in companies such as KoBold Metals for example, BHP has unlocked access to insights into how big data and artificial intelligence could be used to improve mineral exploration.  

An in-house VC capability can also foster an internal culture of innovation. By engaging with entrepreneurial ecosystems, companies encourage their own teams to think creatively and take calculated risks. This innovative spirit can permeate an organisation, empowering its people to propose new ideas and challenge established norms.  

Is a CVC the right funding avenue?

Startups can forge mutually beneficial relationships that extend beyond financial investment, such as co-developing new products or utilising each other’s distribution channels. For our partners, BHP Ventures provides an opportunity to collaborate with us. An example is Boston Metal, which is testing disruptive technologies with Western Australia Iron Ore and Queensland metallurgical coal assets for low-carbon steelmaking, gaining further insights from our mining expertise and partners in the supply chain. 

We support Boston Metal through technical knowledge exchanges and the supply of iron ores for testing technologies that have potential to contribute to our Scope 3 emissions medium-term goal for steelmaking and our long-term net zero goal. This illustrates how CVC can be a two-way street: our support is helping their technology evolve, which in turn can help them raise fresh capital and continue to build promise in the market. BHP is also continuing testing early-stage leaching technologies from Jetti Resources and Ceibo as part of broader copper leaching studies, both of which complement our in-house sulphide leaching technology.

BHP Ventures, Xplor and Think and Act Differently - what's the difference?

Our in-house venture capital unit, BHP Ventures, complements the innovation already underway within BHP by forging new partnerships and creating fresh opportunities to strengthen our portfolio and support the decarbonisation of our operated assets and decarbonisation opportunities in our value chain.  

BHP Ventures is best suited to high-growth startups in industries such as technology and biotech with a scalable business model that require substantial capital to grow. 

Think & Act Differently (TAD), Powered by BHP builds partnerships with people who have technology solutions to support BHP’s ambition to deliver the future-facing commodities the world needs in new ways.  

TAD work with broad innovator segments including startups, research institutions, OEMs, engineering companies, and other mining companies. TAD is focused on identifying capability and ideas from within and outside our industry, particularly from adjacent industries with technology that can be adapted for the mining sector.  

The TAD Open House is a platform that connects innovators with opportunities within TAD, BHP, and the broader ecosystem. The TAD Accelerator brings together innovators to validate and test ideas and technologies that can unlock new possibilities in mining.  Learn more at https://www.thinkactdifferently.com 

BHP Xplor is a six-month accelerator program for early-stage explorers looking to fast-track and de-risk their geologic concepts and become investment-ready. The BHP Xplor program is BHP’s front door for early-stage opportunities in the junior exploration market.  

We are searching globally for the next generation of explorers thinking about the earth’s minerals systems differently to unlock the critical minerals needed for the energy transition. 

Through our BHP Ventures, TAD and BHP Xplor programs we continue to seek new partnerships and access to game-changing technologies and insights to help drive sustainable growth for the decades ahead, and to help ensure the success of the most innovative ideas coming from the startup ecosystem. 

For more information, visit https://www.bhp.com/about/our-businesses/ventures 

Footnotes:

¹ https://www.bain.com/insights/global-venture-capital-outlook-latest-trends-snap-chart/