Corporate venturing units in the industrials sector continued to forge ahead over the past year.
Because it was a busy period for GE Ventures, the cor-porate venturing unit of the US-based industrial conglomerate, we have again named it the most influential group in the sector, as it puts its $150m annual venturing commitment to work. See our most influential table here.
The group has also been active experimenting with its approach to innovation, taking on lean start up techniques to increase internal innovation within General Electric.
Siemens Ventures, the veteran corporate venturing unit of the Germany-based industrial business, also continued to evolve, setting up a $100m early-stage fund.
These developments and many more made it a busy year for the sector’s corporate venturers.
Deals
A number of companies backed by businesses in the sec-tor have tapped the public markets. Energy efficiency moti-vator Opower is reported to have filed for an initial public offering (IPO). In December 2010, GE backed Opower from its $200m Ecomagination clean-tech corporate ven-turing fund and the firm has subsequently closed a $50m B round. Opower, formerly known as Positive Energy, was founded in 2007 by Alex Laskey and Daniel Yates.
There has also been success in healthcare for companies in the sector.
US-based Oxford Immunotec, a medical diagnostics company backed by Dow Chemixal, raised $63m in its IPO, while Receptos, a US-based therapeutics company backed by BASF’s corporate venturing unit, also floated.
Other companies have raised large rounds. View, a US-based dynamic-glass maker for windows, has received $100m financing from growth capital investment firm Madrone Capital Partners. Before this, View raised a $60m series E funding round led by Corning Incorporated, a US-based speciality glass and ceramics maker. General Electric, a previous investor, also joined the round.
Quirky, a US-based consumer products maker that realises designs and inventions submitted through an online platform, raised $79m in series D, of which GE contributed $30m. The round included the participation of venture capital firms Andreessen Horowitz, Norwest Venture Partners, RRE Ventures, and Kleiner Perkins Caufield & Byers. Quirky has raised over $175m since its launch in 2009.
3M New Ventures invested in Lixivia, a Chile-based company with which 3M has been working on an engineering process to increase the recovery of copper sulphate.
3M New Ventures also invested in Takadu, an Israel based provider of data analytics services to monitor water networks. The deal followed ABB’s strategic investment in Takadu last year.
Germany-based materials group Evonik Industries secured its first direct investment, leading the $12m series C round raised by FRX Polymers, a US-based maker of environmentally-friendly flame-retardant plastic. Other investors included BASF Venture Capital.
Groups in the sector have also invested further afield. OpenX Software, a US-based provider of advertising revenue products and services, has raised $22.5m in its series E round from a consortium including Presidio Ventures, which invests on behalf of Japan-based conglomerate Sumitomo in the US.
Funds
Siemens last month launched a $100m early-stage fund, dubbed Industry of the Future Fund. Siegfried Russwurm, CEO of the Siemens Industry Sector Fund, said: “As digitisation and software are becoming increasingly important for manufacturers to compete in the global marketplace, the Industry of the Future Fund will support Siemens’ Industrie 4.0 strategy by providing capital to those companies whose innovative technologies and vision have the potential to change the landscape of manufacturing and industrial automation.”
GE is preparing its fourth area for corporate venturing with a team to look at advanced manufacturing. The com-pany already has corporate venturing focuses on software, healthcare and clean-tech under its GE Ventures unit. Rafael Torres, managing director at GE’s Healthymagina-tion team, said advanced manufacturing would be a fourth focus for the team of 35 professionals already investing $150m per year.
ABB is investing €2.3m ($3m) in the project, while the EU is contributing €12m. Start ups and investments in Nupharo Park will be eligible for €800m in EU grants and loans up to 2020. ABB is participating in Nupharo Park through its venture capital unit, ABB Technology Ventures, established in 2009.
Freudenberg launched IdeaTrophy, a business idea competition open to both employees and outside applicants such as new technology providers, research institutes and start ups.
People
Leslie Bottorff, formerly a managing director at US-based venture capital firm Onset Ventures, has joined GE Ventures.
Evonik Venture Capital strengthened its team by hiring Jakob Wirbatz, who worked for more than a decade with Accera, an investment arm of a Germany-based energy supplier.
Jon Salkeld joined Castrol InnoVentures, the corporate venturing unit of the motor oils and lubricants business, as technology director. Salkeld became part of Castrol’s parent BP in 2011 in charge of global product development for the automotive business, having worked in a variety of technology, strategy, marketing and business management roles at other large blue-chip companies.
Samsung’s Novaled buy yields high-definition prospects
South Korea-based conglomerate Samsung capitalised on its relationship with Dresden University of Technology spin-out Novaled when it acquired the Germany-based organic light-emitting diode (OLED) manufacturer for an enterprise value of €260m ($345m), including €30m of performance fees.
The two have been working together for some time, with the majority of Novaled’s OLED sales going to Samsung. In return, Samsung took a 10% stake in the firm through Samsung Ventures Europe (SVE) in 2011.
SVE was understood to be the sole investor in the €8.25m ($11m) round for Novaled. As part of the acquisition, SVE sold its 10%, with Samsung Electronics acquiring 40% and Samsung affiliat Cheil Industries, which manufactures OLED displays, picking up the remainder.
From SVE’s point of view, the first true exit for the venture unit, the deal is significant. Michael Jeon, head of SVE, said the deal was “Samsung Ventures’ first exit whereby a portfolio company of ours became acquired by Samsung as Samsung became more acquisitive”.
He added: “Our investment in Novaled is a huge success both strategically and financially given that the ultimate acquirer is none other than Samsung Cheil, and SVE is generating an impressive financial return from [the] investment in Novaled as well. Much to celebrate.”
When Novaled was originally founded in 2001 through a spin-off of the Dresden University of Technology and the Fraunhofer Institute of Dresden, OLED was ahead of its time and was a technology floundering without purpose. However, it did not take long for the rest of the world to catch up. The advent of the smartphones and tablets, and the continual evolution of television from the turn of the millennium to the sleek, high-definition designs of today meant OLED quickly found a role to play.
During that time, while plasma and liquid crystal displays (LCD) became the dominant technologies in the visual display markets, Novaled amassed more than 500 patents related to OLED technology. It developed several partnerships with players other than Samsung in the OLED market as use of the technology caught on in the burgeoning smartphone market.
Profile: Wanxiang snaps up Western venture darlings
China-based industrial conglomerate Wanxiang has continued to impress with the boldness of its investments in US-based technology darlings, some of which have fallen on harder times.
Last year Wanxiang won our large investment of the year award last year for the $420m series D round it backed for US-based coal conversion company GreatPoint Energy as part of a $1.25bn partnership to help it develop its technology in Asia. GreatPoint’s D round was the largest investment by a Chinese corporation into a US venture-backed company, according to news provider Dow Jones VentureWire.
Wanxiang recently made an equally bold move, taking over once-feted hybrid-car maker Fisker Automotive from bankruptcy protection in the US, while earlier last year Summit Strategic Investments, a $120m private equity fund controlled by Wanxiang, acquired Segway, a personal electric transportation company, for an undisclosed sum.
Doubtless the array of Western technologies backed and acquired by the Chinese company will make it a formidable force for years to come.