Nicolas Sauvage is managing director at TDK Ventures, the corporate venture capital (CVC) arm of Japan-headquartered electronics manufacturer TDK Corporation.
TDK president and chief executive Shigenao Ishiguro said of the unit: “I believe there are three essential factors for startups: innovative ideas, entrepreneurship and, of course, funds. TDK wants to bring much more than capital to the equation.
“TDK Venture invests in early-stage innovative startups in material sciences, energy and related areas, that have unfortunately been underrepresented in venture capital portfolios, and that we know will have a profound and positive impact in the world we live in.
“We have put processes in place to help startups leverage TDK’s scale and reach to access potential customers, channels, a global ecosystem, industry connections, market knowledge, operating expertise as well as go-to-market mentorship.
“We have an ambitious vision for TDK Ventures to help us embrace and propel the digital and energy transformations of segments such as health and wellness, next-generation transportation, robotics and industrial, mixed reality and the wider IoT (internet of things) markets.”
Formed in mid-2019, TDK Ventures has 11 companies in its portfolio, nine already announced: product delivery service Starship, electric bicycle rental service Wheels, laser-light technology developer SLD Laser, electric vertical take-off and landing aircraft developer AutoflightX, medical imaging startup Genetesis, additive manufacturing startup Origin, AI accelerator Groq, ammonia-to-energy hydrogen fuel cell company GenCell, and two more to announce in coming month in robotics and 3D sensing spaces.
Regarding the plans for the remainder of 2020, Sauvage said: “We plan to build an even stronger link into our ecosystem and work closely with CVCs and VCs on investment opportunities, bringing relevant opportunities to them, sharing due diligence when appropriate.
“We also want to prove our ‘TDK Goodness’ to our portfolio companies, making sure they see how we can help them accelerate their path to success or reduce their risks getting there…We are planning to increase our reserve to make sure we can assist our portfolio companies for them to achieve their goals and dreams.
“At TDK Ventures, we offer support beyond monetary value, and aim to continue offering our services, support and counsel to our portfolio companies, ensuring they have access to the tools they need to succeed.”
As a young fund, there are also challenges. “New CVCs do not often receive the benefit of the doubt. This is okay, and validates that we must show our work and our worth, that is, show and not just tell. We always strive to show that we bring value, we are consistent with our values, and we are here for the long-term,” Sauvage explained.
“The difficult times our society is in right now present a time where many CVCs will walk back investments due to uncertainty. When we established TDK Ventures, we set it up with the anticipation a downturn was likely, with a continued commitment to the entrepreneurs first and foremost, no matter what. This is why we plan to increase our reserve, to plan for the more difficult times to come.”
To create a better CVC industry, corporate venturers must focus on the success of the entrepreneurs, according to Sauvage, who added: “This is different than focusing on the entrepreneur or making them feel good, it is a relentless effort to see what their project really needs to succeed – and requires working hard to provide all the TDK Goodness.”
TDK Ventures helps connect portfolio companies with TDK. “From the start of TDK Ventures, I created a new role called ‘startup liaison’ whose role is to bring the TDK Goodness to the portfolio companies and connect all the relevant TDK teams with these portfolio companies,” Sauvage said.
“We have kick-off meetings after investments conclude, where we bring together up to a dozen teams of TDK (about 20 people) and brainstorm with the CEO and his team on how we can help accelerate their success…We actually will measure ourselves by how likely entrepreneurs will recommend TDK Ventures to other entrepreneurs, probably the most meaningful KPI of all.”
Sauvage started as an engineer in microelectronics, moved to product management, then moved to sales and later senior director of ecosystem for TDK where he built long-term partnerships with companies including Google, Qualcomm and Samsung.
“My road to CVC is probably very unlikely if this was not for the classes I attended in 2018 at the Stanford executive program where the idea to propose the CVC project to TDK came up,” he concluded.
