The decision to upsize Robert Bosch Venture Capital (RBVC)’s recently closed fifth fund to €250m ($253m) was directly related to its expansion on the US east coast, managing director Philipp Rose (pictured) tells Global Venturing.
“The key reason to increase the size further from the €200m fourth fund to €250m is that we decided to establish another office, in the Boston, east coast area of the US, and therefore we said: ‘Okay, if we extend out activities in the market we should also have more firepower to invest with over the lifetime of the fund’.”
Launched by German industrial technology and appliance maker Robert Bosch in 2007, RBVC makes strategic investments on behalf of its parent, providing up to €25m per deal. The Boston office is its sixth, joining two in Germany and one each in Israel, China and California.
“We took a look at the global VC market as we do regularly, and the east coast is one of the largest parts,” Rose explains. “We mirrored that against our search field, and it became obvious given our search areas that the east coast is very relevant for us.
“The decision to go to Boston was also driven by things like Bosch already having a presence in Boston – Bosch R&D people are there and they have very good relationships with a couple of universities already.”
As with many VC investors, RBVC had a busy 2020 and 2021, despite having to use Zoom much more frequently. It is now meeting founders in person again, apart from its Chinese team, which continues to be impacted by stringent lockdown rules in Shanghai.
Rose says the unit has not seen signs of significant investor pullback in the present bear market, though he has observed some extra caution by certain other investors. RBVC has always been cautious with valuations, he adds, and has frequently turned down deals due to the valuation being too high.
“Overall, there was a trend in the market that valuations had gone up,” Rose says. “It is really a case-by-case decision whether we still think this is justified or whether you say this is not in sync with the risk profile of the company anymore.”
Although RBVC invests in areas that Bosch can assist with its expertise, Rose reiterates that its key focus is financial returns, and its target areas can broadly be separated into four groups.
“One is electrification and automation,” he says. “The electrification of mobility of course, but also lots of robotics and automation activities in the industry. Bosch has a large drive and control business, Bosch Rexroth, and so there are many applications in the industry where we look at how to further improve automation and support the continued electrification of processes.
“The next is energy efficiency – we look at anything that can help to save energy. To a smaller extent, we also look at healthtech wherever it is related to sensors and its applications. Bosch is one of the largest sensor suppliers in the world, and not only can those sensors be applied to mobility but also to medical and health applications.”
The last group is what RBVC calls enabling technologies: software, sensors, chips or other technology, which can bolster manufacturing or business operations. Nevertheless, it is also on the lookout for game-changing edge technologies.
“There is continually a lot of deal flow in artificial intelligence technology, in [the internet of things], augmented and virtual reality, and in robotics and any automation solutions,” Rose says.
“We also continue to look at the quantum space; we were an investor in IonQ before it successfully went public. It’s pretty much the themes we have followed in the last two years.”
Photo of Philipp Rose courtesy of Robert Bosch Venture Capital GmbH.
