TDK Ventures aims to invest in early stage startups globally that will propel digital and energy transformations especially in materials science and hardtech, its managing director Nicolas Sauvage has told Global Corporate Venturing.
Electronics manufacturer TDK Corporation formed the corporate venture capital (CVC) vehicle in July with $50m of capital.
“We are interested in verticals such as health and wellness, next-generation transportation, robotics and industrial manufacturing, mixed reality and the wider internet-of-things markets,” explained Sauvage.
“We are laser-focused on startups that are the current ‘king of the hill’ in their technology area, with the intention of helping them to become ‘king of the mountain’ as these emerging market segments mature.”
TDK will engage actively with TDK Ventures’ portfolio companies he said. “We have a startup liaison from our corporate parent whose role is to make sure we bring all the ‘TDK goodness’ to the startups we invest in.”
This covers: identifying opportunities to leverage TDK’s scale and reach to access potential customers, channels and global ecosystem; introducing appropriate industry connections; sharing market knowledge and operating expertise; and providing go-to-market and brand mentoring.
“Already in many of our early discussions, startups have told us they actually want to leverage a strategic relationship with TDK, so of course, we will assist entrepreneurs if this is what they feel is best for them,” said Sauvage.
“Otherwise, I want to be very clear we will never gate an investment to a contractual engagement with TDK. If this happens organically before or after an investment, great, but it is not an investment criterion.”
The idea of TDK Ventures came to Sauvage while he was attending the Stanford Executive Program last summer. “Jesper Sørensen, professor of organisational behaviour at Stanford University, opened my eyes to the ‘exploitation versus exploration’ approaches of organisations,” he said.
“Professor Sørensen emphasised why corporate venturing is a valuable tool for innovative companies to use, especially when done well. It was natural to see how corporate venturing fits with an innovative company like TDK, and so TDK Ventures was born.
“As managing director, my role is to serve as steward to the TDK Ventures team and our threefold mission – first, to help the entrepreneurs we invest in to achieve the highest levels of success commensurate with the opportunities; second, to share with TDK Corporation all meaningful actionable learnings; and third, to contribute value as a co-investor in the VC and CVC community.”
Prior to joining TDK in 2016 as a senior director of ecosystem, Sauvage worked at startups and small enterprises, where he walked similar paths to many of the startups he and his team will be considering as portfolio companies.
“I have huge respect for entrepreneurs who want to build a better future,” he said. “At TDK Ventures, I plan to apply this experience along with that of our team, to more accurately identify startups with the potential to become ‘number one’ companies in meaningful market segments, and to understand what it takes to help these startups increase their odds and accelerate their success.”
The unit’s strategy involves walking before running, according to Sauvage, meaning its initial plans are to follow in rounds rather than leading.
“As such, and within our strategic and financial goals, we expect to consider observer board seats,” elaborated Sauvage.
“More meaningfully, we are looking to develop professional intimacy and genuine trust with the startups we invest in, to gain a mutual understanding of what they would value the most from all the TDK goodness we could bring to them.
“Ultimately it will be up to the startups to choose what they want to leverage, and when they want to leverage it, as we anticipate this may change over time.”
Concerning TDK Ventures’ plans, Sauvage said: “We are very much looking forward to working with the wider hard-tech investment community, to become a valued partner that adheres to industry best practices, while adding value, and increased valuation to the startups we co-invest in.”
Photo of Nicolas Sauvage courtesy of TDK Ventures.
