In March, Sue Siegel, CEO of industrial product and appliance manufacturer General Electric’s corporate venturing unit, GE Ventures, joined the board of US-based dental technology developer Align Technology.
Founded in 1997, Align produces a removable set of braces called Invisalign and a 3D digital scanning system for orthodontic or restorative dentistry dubbed iTero3D. Siegel also heads GE’s healthcare innovation initiative, Healthymagination.
Joe Hogan, Align Technology’s president and chief executive, said: “Sue brings a tremendous amount of experience across the corporate and private healthcare fields to our board of directors. She is actively engaged in advancing technology within the science sector and is recognised as an influential leader.”
It seems an accurate summary for probably the most name-checked corporate venturer among her peers.
In January, Siegel, co-chairman of the Global Corporate Venturing & Innovation Summit, told attendees “the time is now” for the industry to collaborate with entrepreneurs. It is a statement that GE Ventures has tried to live up to as an industry leader, viewed increasingly by other groups as a model of best practice.
GE Ventures’ latest deals include leading an $11m funding round for US-based workplace communication software developer Zinc.
Its five main units are equity investing, which invests in and partners startups, GE Licensing, New Business Creation, Healthymagination and Catalyst, its new early-market development discipline. Siegel reports to GE vice-chairman Beth Comstock, who runs GE Business Innovations, developing new businesses, markets and service models.
Under Siegel, GE Ventures has become the primary unit backing earlier-stage entrepreneurs. Siegel remarked at the Global Corporate Venturing & Innovation Summit in California last year: “We earn our stripes by being engaged in corporate strategy for our business units, educating on new business models, emerging technology trends, and working to always sense emerging trends. We have helped do this through the infusion of talent from the VC and entrepreneurial world. These are among a few things that we have done, and yet there is much more to do both internally and externally.”
Siegel herself joined GE from venture capital firm Mohr Davidow Ventures along with partners Marianne Wu and Alex De Winter.
Siegel sits on the board of US trade body the National Venture Capital Association as one of two strategic venturing representatives, the other being George Hoyem from In-Q-Tel. Her background was in healthcare investing for VC firm Mohr Davidow Ventures from 2007 and a career in the industry stretching back 30 years to 1985 at chemicals company DuPont and Bio-Rad Laboratories, then later as president of both Affymetrix and Amersham (acquired by GE) and before that as a student in Boston and Puerto Rico. This was a time at the dawn of medical genetics and biotech industries and venture investing as Kleiner Perkins Caufield & Byers had become the first VC firm to set up a life sciences group a year earlier in 1984, after it backed the first biotech, Genentech, founded in 1976.
Now, the sights and tools able to be used have broadened. In a profile published in March last year by GCV, Siegel referred to the GE Ventures platform as a business toolkit – a multi-pronged approach aimed at accessing innovation. This toolkit consists of traditional corporate venture capital investing, new business creation, licensing and early market development practices.
She said five new businesses had been created over the past 18 months through New Business Creation, a practice area led by Risa Stack. Add to this toolkit Catalyst, an early-market development practice that put in place “a discipline that helps identify and develop collaborations with leading science entrepreneurs creating breakthroughs that are market disruptors and could be the next big thing”, as Siegel said.
Among these new business creations has been Evidation Health, a digital healthcare company using predictive analytics to improve patient outcomes. Evidation is the result of a collaboration between GE Ventures and Stanford Health Care, the university hospital of Stanford University. Last month, Evidation raised $10m, led by Sanofi-Genzyme BioVentures. GE Ventures and B Capital were return investors.
Other startups being created are Current, which aims to provide a sustainable energy ecosystem, and GE Fuel Cells, which has developed fuel cell technology that uses stainless steel instead of platinum and rare metals to reduce costs and increase efficiency.
Siegel also pointed to the Healthymagination platform, which works on catalysing solutions for major global health challenges. The HealthyCities initiative and brain health efforts are two examples. Siegel added that “as a CVC, we are being asked to expand our focus to move beyond the role of tech scout and equity investor” in the quest for future growth. She affirmed that “GE Ventures has expanded GE’s access to the innovation ecosystem, its technologies, new business models and practices, and the incredible entrepreneurs that power them”.
And GE Ventures has set up its Edge program under Lisa Coca, managing director of corporate venture investments and commercial development, to provide what Siegel said was support for “our portfolio companies through what we can bring to their growth and development by providing access to our research and development experts, our distribution channels, our worldwide footprint and our regulatory and policy expertise”.
She added: “We have really fuelled this effort by also offering leadership educational programs at our Crotonville campus, with a curriculum ranging from leadership skills and hiring to marketing and the art of storytelling, geared at enhancing entrepreneurs’ development.”
Corporate venture capital investments “aimed at transforming industries and generating meaningful returns might require more capital or global access than a financial VC might be interested in doing”.
Siegel also emphasised the importance of collaboration among players in the field. “Corporates understand that innovation is broad and diverse, and that we cannot do it alone. Partnerships are key and GE welcomes partners in the growth journey.”
To date, GE Ventures has inked more than 100 equity deals, and technology and commercial collaborations across its five focus areas – software and analytics, healthcare, energy, advanced manufacturing and corporate productivity and operational efficiencies.
In terms of investment trends, Siegel said for last year’s Powerlist profile: “Everything is going digital in every industry. Everything will be connected via the cloud. Data is the new currency. Business models that are established in the tech vertical will be widespread into other verticals such as healthcare, energy and in oil and gas, to name just a few.”
GE Ventures, however, has not been directly responsible for all investments since inception. In 2013, the company invested $104m in Pivotal, a spinout of data services provider EMC/VMWare, in return for a 10% stake. That deal was made by the GE software centre’s business development team and, according to an unnamed insider, “since it was such a large deal, it is not considered GE Ventures for the purpose of budget, but it went through the same channels”.
GE Ventures, therefore, is increasingly seen as an effective tool to drive the innovation and growth inside the parent. As Siegel said in a speech at the GCV Rising Stars awards in Sonoma, California, in January last year: “GE has given us, the GE Ventures team, a chance. We had to earn our place in the fabric of the company, and we have to keep doing that every day.”
