Grant Allen became head of ventures at Zurich-based industrial giant ABB at the beginning of 2017. The passing of the baton from outgoing ABB Technology Ventures (ATV) president Girish Nadkarni comes after Allen had been with ABB for more than six years, and over a decade as a venture investor. At ABB, he has led more than a dozen investments, including the exits of Industrial Defender, Validus DC and Persimmon Technologies, all positive returns for ATV.
Bazmi Husain, chief technology officer of ABB, said: “Grant has the rare mix of deep understanding of the startup ecosystem and the needs of an industry technology pioneer. Participating in and leveraging the startup ecosystem is now an integral part of ABB’s technology strategy and we are firmly committed to corporate venturing as a key lever to advance ABB’s innovation envelope.”
The strategy for ATV to accelerate and enhance ABB’s corporate innovation efforts will build on past years, with the team taking a more thoughtful approach to tackling both early-stage potentially disruptive hard-tech opportunities with cheques of from $250,000 to $3m and simultaneously more strategically aligned series B and later deals with cheques of $2m to $6m. This latter category will include tight business unit alignment and investments are likely to include a memorandum of understanding (MoU), joint development agreement (JDA) or other business arrangement struck concurrently with the investment.
Allen said: “As ABB becomes an increasingly digital organisation, ATV is doubling down on enabling software and other areas that ladder up to ABB’s Ability IoT (internet-of-things) analytics platform. We are seeing a large number of terrific deals in artificial intelligence and machine learning, advanced sensing, cloud and edge analytics and cybersecurity. And as the most active corporate investor in robotics – and the most active of any VC I have come across – we continue to pursue advanced industrial robotics application software. Anything that helps makes ABB’s best-in-class robots safer, cheaper, more easily trainable and ultimately more valuable.”
ATV will also be pursuing a fund investment strategy, seeking to expand its investor relationships beyond the current stable of three funds – ClearSky, Emerald Technology Ventures and Tsing Capital through its China Environment Fund.
“Fund investing is a terrific pathway to opening up the innovation aperture,” Allen said. “Seeing more deals, and achieving maximum leverage of a team which is undersized in terms of headcount relative to its peers, though still as active in terms of deal count, is critical to us hitting both our strategic and financial goals. We are seeking close partnerships with funds demonstrating strong financial success as well as innovative and proactive modes of engaging with global companies like ABB.”
In the first four months of 2017, he said ATV had already made as many new investments as in all of last year and more than the two previous years. ATV has closed investments in Enbala Power Networks (with GE, National Grid, EnerTech, Chrysalix and Ev Williams’s Obvious Ventures), a developer of smart grid control software; Atom Power (with Siemens and Eaton), creator of a breakthrough solid state circuit breaker; Enervalis, maker of a smart energy management platform (with EIT InnoEnergy); and Bonsai AI, creator of a novel artificial intelligence development toolkit to “democratise artificial intelligence” (with NEA, Microsoft, Siemens and Samsung).
“Our new set-up is tighter and more nimble than ever and we are on track to double our deal close rate,” Allen said of the year so far. “At the same time, we are maximising value for the ABB organisation and seeing much better dealflow as a result of this better business unit engagement, because that is exactly what startups come to ABB for – talking to that PhD expert and getting access to our brand, our R&D capabilities and our channel access.
”Currently, about one in five venture deals has a corporate participant. CVC is as mainstream, as professional, and as critical to the VC ecosystem as it ever has been. Still, the number of deals has slipped and the number of active CVC groups was down in 2016 versus 2015. The ones that remain will have to showcase even more strategic value as well as financial performance to justify their existence.”
In pursuit of this, ATV will be working closely with ABB’s new chief financial officer, Nokia veteran Timo Ihamuotila, to ensure robust financial governance and a path towards cashflow neutrality, meaning new ATV investments will be funded from portfolio returns.
Before ABB, Allen was a vice-president with Core Capital Partners, a $400m enterprise software-focused venture firm in Washington DC. Among other roles, he had stints at Microsoft in its mobile and embedded devices division, working for the CEO of Jingle Networks – later sold for $63m – and at several startups, including a web services company focused on the mortgage industry he founded when was 19 years old.
Allen has an MBA from Wharton School at University of Pennsylvania and a BSE from Pratt School of Engineering at Duke University. He was recently appointed to US trade body the National Venture Capital Association’s corporate venturing advisory group. Outside ABB, he is an angel investor, with positions in more than two dozen companies, including Uber, Avizia, Catawiki, EquityZen, Munchery, AltspaceVR, Earnest and Kanler. Previous investments include LivingSocial, Alibaba and Visually. Allen is on the boards of Soft Robotics, Trilliant, Grabit and Atom Power.