Tom Whitehouse, contributing editor at Global Corporate Venturing, hosted a breakout specialty sector session on advanced manufacturing today at the GCV Symposium.
Douglas Trafelet, managing director of data provider Pitchbook, kicked off the session by presenting data on venture capital-backed investments in advanced manufacturing businesses around Europe.
The data suggested that while deal count in European manufacturing has gone down since 2012, the total capital invested in the rounds increased. When looking at leading investment deals in manufacturing, the top seven deals were all for Russia-based companies.
Grant Allen, head of ABB Technology Ventures, the corporate venturing arm of Switzerland-based industrial conglomerate ABB, emphasised that the two key areas for ABB are robotics and industrial automation.
“Robotics is the tip of the manufacturing innovation spear,” he said alluding to the motto of the 2017 Symposium. He showed a video on YuMi, a robot created by ABB to work alongside with humans in manufacturing facilities.
Allen highlighted the importance of robotics for ABB, telling the audience: “Six out of our last 11 investments were in robotics. We care a lot about robotics.”
Robotics investments allow ABB to go into new areas of equipment manufacturing, a case in point being ABB´s backing of US-based Soft Robotics whose robotic actuators for manipulation and material handling have the ability to grasp fresh produce, electronic components, consumer goods and clothing.
In terms of current hot trends, Allen named the internet of things, the rise of industrial robots and the nearshoring of US industry, as well as growing investments in manufacturing automation and industrial robotics in China, as the latter faces the problem of an aging population.
David Paul, director of business development and R&D at automotive parts manufacturer Magna International, said that while the automotive sector was, traditionally, “a very conservative industry,” recent developments in autonomous and connected vehicles have created opportunities for Magna in the emerging mobility ecosystem.
Much like Allen, Paul spoke about the significance of robots that will be working alongside humans in smart factories of the future. Among other trends, he highlighted artificial intelligence for transport, human-machine interaction, and augmented reality, which is a growing area in manufacturing for training and simulation purposes.
As usual the breakout session also included speakers from two startups: Wolf Beele, CEO of Flowcastings, a Germany-based castings manufacturer backed by General Electric; and Magnus Lindvall, managing director of Sweden-based Microbas Precision, which produces precision components and systems in special materials and metals that are customised in terms of shape, material, dimensions and tolerance.
During the interactive discussion, the speakers touched upon the issue of partnerships between corporate parent corporations and startups. Grant Allen said the best approach in his experience is to try to connect startups with other corporate divisions first so they strike up partnerships, and then to subsequently come in as a CVC investor.
David Paul added: “We are the investor and the market for many of them, which is our advantage. However, there is a great deal of mutual respect when working with those companies. It is all about respect.”
Wolf Beele said it is important to consider opportunity/cost when a commitment from a CVC brings an emerging company closer to a corporate that will be a blue-chip customer for them but which may turn away other potential big customers.
Beele also mentioned the “industry 4.0” buzzword and stated that he believes advanced manufacturing to be “the natural extension to what industry 4.0 is striving to deliver.”
