Gaule: Give a brief description of the your fund’s purpose.
Nadkarni: ABB Technology Ventures (ATV) invests in early-stage companies that have technologies or business models of strategic interest to ABB.
It was formed in late 2009 and we made our frst investment in 2010. To date we have invested about $150m in nine companies and three venture capital (VC) funds.
We are stage and geography agnostic.
Gaule: How do you address the issue of achieving fnancial and strategic returns, and measuring the strategic benefts?
Nadkarni: All investments have to meet two criteria – does it offer a return commensurate with the risk and is it of strategic interest to ABB?
An investment is of strategic interest to us if it is a technology we want to learn more about, a business segment we wish to explore, an industry we want to support – as it could become a signifcant buyer of ABB products and services – or company we may be interested in acquiring if it overcomes technology and market risk.
Gaule: Give a brief overview of the people in the team and the organisations you work with.
Nadkarni: We have a very lean team which has a mix of long-service ABB team members and new team members with investment experience.
We have a dedicated chief techology offcer (CTO), Kurt Kaltenegger, who has worked as CTO for one of our businesses and ran the ABB corporate research centre in China.
Andrew Tang is a managing director based in Palo Alto, California, and prior to joining us was a founder partner at DFJ Dragon in China.
Grant Allen is a vice-president based in Washington DC and came to us from Core Capital. We also have an intern.
Being a corporate venture group, we have the luxury of relying on our businesses and more than 6,000 PhDs to help us evaluate the technologies and businesses we propose to invest in.
We also work closely with major VC frms around the world. We have looked at or invested in frms such as Emerald Technology Ventures in Zurich, Kleiner Perkins Caufeld & Byers, VantagePoint, Rockport, and Draper Fisher in the US, Cedar, Giza and Israel Cleantech in Israel, and Gaja Capital Partners in India.
We also work closely with other corporate venture groups at companies such as BP, Bosch, Dow, EDF and SSE.
Gaule: What has been your most interesting recent deal?
Nadkarni: The last deal was in an Israeli company in the water leakage detection business called TaKaDu. In addition to having a very interesting technology, it has an excellent business model and execution platform.
All three factors were of interest to us. For instance, it could install a full monitoring system in a water utility in Chile remotely from Israel and have it up and running in a few hours.
Gaule: As an infrastructure business, how are you seeing the value of information and the “internet of things”?
Nadkarni: The internet of things is very important for us. It is becoming more critical as more data is available and we have to understand what it is saying to us then build intelligence at the embedded and centralised level.
Gaule: What is your view on the current market conditions for starting a new venture?
Nadkarni: It really depends on the sector you are starting the business in. One of the biggest challenges in the business-to-business sector is the sales cycle.
Even where companies and utilities need certain products or services, they seem reluctant to pull the trigger. So it often becomes a race between adoption rate and burn rate.
Gaule: What do you do to relax?
Nadkarni: I am a political junkie so I follow global and US political developments. I also love reading and music. Finally, my wife and I are avid hikers and practice competitive photography … with each other.