HG Ventures, the corporate venture arm of Indianapolis-based The Heritage Group, on Thursday announced a partnership with Innovate UK to leverage HG Ventures investments in environmentally sustainable innovation in the United Kingdom.
THG, a privately held company controlled by the Fehsenfeld family, was founded in 1930 and has more than 5,000 employees globally in its 30 portfolio companies, with about half of those employees working in Indiana. The company has various holdings in environmental services and remediation, specialty chemicals and fuel products, and construction and materials.
The company launched HG Ventures 2018, and officials said it would invest about $50 million in corporate ventures annually.
Innovate UK is part of United Kingdom Research and Innovation, which directs research and innovation funding for the UK government. HG Ventures was chosen as the only investor outside Europe to participate in the program following a competitive selection process.
Innovate UK is allocating grant funds to startups that can reduce energy and resource use or otherwise drive sustainable innovation. Startups that receive the grants must be funded by one of five investor partners and carry out a development project ranging from about $75,000 to $2.75 million that runs between 12 and 24 months.
HG Ventures has already made several European-based investments in its focus areas of environmental services, green chemistry and sustainable infrastructure.
The UK government has recognized the critical role that construction, materials and chemicals industries play in powering its infrastructure and commerce, Innovative UK officials said in a statement. These industries contribute more than $69 billion to the UK economy, are responsible for 10% of UK carbon emissions and consume substantial raw materials and energy. Innovate UK said it sees innovation in these market sectors as key to a greener, more sustainable future.
“We are honored to be chosen by Innovate UK to identify companies for our collective investment, knowing the lasting positive impact these startups will make on the environment and the economy,” said Kip Frey, HG Ventures managing director. “It is inspiring to be part of such a forward-looking vision, and exciting to participate in a program so closely aligned with our areas of investment focus and the industries in which The Heritage Group operates.”
HG Ventures makes initial investments globally ranging from $1 million to $10 million as a lead or syndicate investor, with additional capital set aside for follow-on investments. HG Ventures already has invested in UK companies in water safety and smart infrastructure and has made investments worldwide in sustainable and advanced materials, environmental management, electrification and infrastructure startups.
By leveraging the expertise of The Heritage Group operating companies and research center, HG Ventures offers a unique value proposition to its portfolio company partners, Frey said.
HG Ventures, Frey said, was born out of the desire of board chairman Fred Fehsenfeld and CEO Amy Schumacher to “invest in innovative institutions looking at opportunities through a different lens.”