As chief executive, Ralf Schnell has overseen a transformation of Siemens Venture Capital (SVC), the corporate venturing unit of the Germany-based industrial corporation, repositioning its focus entirely after he took it over in February 2005. It has now grown to more than €800m ($900m) invested in 180 companies with commitments to 40 third-party venture funds.
In 2014, Siemens Venture Capital established a $100m venture capital fund to support startups in very early stages of development. The Industry of the Future Fund, launched by Siemens’ industry sector division together with the venture capital unit of Siemens Financial Services, aimed to invest up to $1m individually in very young startups with promising industrial technologies.
It was a launch in a very active year for Schnell’s team, with more than a dozen deals that year. However, the pace slowed again last year and the Future Fund and SVC suffered a blow when Mike Majors, a managing partner and head of the fund, in March this year left to join venture capital firm Data Point Capital.
But successes have also flowed in this period. In an interview with GCV reporter Kaloyan Andonov, published in the May issue of Global Corporate Venturing, Schnell said: “One of the most recent successes has been Polarion, developer of the first browser-based application lifecycle management (ALM) enterprise solution. Our partnership with Polarion commenced two years ago (through an initial VC investment) and since then we have developed and executed a joint market strategy together – culminating in Siemens’ acquisition of the company in November. This acquisition will see Polarion’s ALM solution being integrated into Siemens’ product lifecycle management (PLM) portfolio, strengthening Siemens’ ability to help companies create smart, connected products.
“This is a great illustration of our VC strategy in action. Combining investment and expertise in order that companies can meet their potential and Siemens customers can fully realise the benefits of digitalisation.”
For the Powerlist, Schnell said: “Industrial software is key as the internet of things is transforming into a web of systems and applications.”
When asked by Andonov about what investment trends he saw in industrial startups, Schnell said: “In terms of startups, the key investment criteria from our perspective would be that the startup has a genuine leading technological edge that will make Siemens and its customers more competitive by expanding and improving the products and services that Siemens offers. Second, we invest in companies that have a desire to scale their potential to realise sustainable profitability and success. Last, we look at situations where our industry experience and expertise can add value to the company in question. I think the trend of adding strategic value is one that we are seeing more of in the VC industry.”
In his more than a decade in charge of SVC, the group has become a generalised group reflecting Siemens’ four business units as well as being a fund-of-funds manager for both Siemens’ pension fund and investors outside Siemens.
Schnell said in an interview for the 2012 Powerlist said: “Before joining Siemens, I built Infineon’s corporate venturing activity from the ground up since 1998.”
Prior to joining Infineon Technologies in 1998, Schnell worked with Siemens for 11 years after obtaining his diploma degree in physics from the Ludwig-Maximilians-University, Munich and his PhD in physics with research work in semiconductor surface physics at the synchrotron radiation laboratories in Hamburg and Berlin.
Schnell added: “I did the secondary sale of Infineon Ventures almost the same day I signed the contract for SVC. We sold the Infineon portfolio on December 24 2004. On December 23 I signed the contract with SVC and joined in February 2005.”
Siemens’ investment activity since the beginning of 2015
