Savini has also worked as a business development, research and development, mergers and acquisitions adviser at industrial conglomerate General Electric.
He was involved in Shell Ventures’ investments in energy management technology developer Autogrid, blockchain-powered energy storage solution developer LO3 Energy and Veros Systems.
You recently joined Honeywell Ventures. What will be your new role at the venturing unit?
I joined Honeywell Performance Materials and Technologies (PMT) in March 2021. PMT is the business unit which focuses on energy and sustainability. PMT comprises world-leading businesses such as universal oil products (UOP), process solutions and advanced materials. When you jump in your car, 60% of the time you are leveraging technology produced by Honeywell PMT.
Venturing and partnerships is a key vehicle we want to reinforce to remain relevant and generate strategic optionality in this fast-moving energy market. In this role, I will shape venture’s internal process and lead our sustainability investments and partnerships. The focus will be predominantly on three areas Ð green hydrogen, energy storage software and plastic circularity.
What is the investment mandate of Honeywell Ventures and the target ticket size? How has the vehicle evolved since it started?
Honeywell Ventures was established in early 2017 and since then it has inked 23 direct investments, five investments in funds and generated two exits. Typical cheque size is $1m-$5m with global focus in early stage companies, series A to C.
Will you be seeking to establish commercial relationships for the corporate parent with portfolio companies in the cleantech space?
We want to really help the company grow and flourish. Thus, establishing a strong commercial value-adding partnership with Honeywell, early in the process, is the most important step. In every investment we evaluate to make sure we can add value to the investees in the form of incremental revenues, sales channels, co-marketing, joint research and development efforts and technology co-development.
The energy space is generally very capital-intensive and requires a longer investment horizon than other areas. What has been the level of executive support for the vehicles in terms of exploring opportunities in the cleantech space?
Honeywell has a long legacy rooted in sustainability-related innovation in capital intensive businesses. As examples, Honeywell developed sustainable refrigerants and aerosols reversing damage to the ozone layer and invented the catalytic converters. Today, Honeywell has a dedicated business division called sustainable technology solutions, led by Benjamin Owens with a leading position in renewable fuels. Moreover, Honeywell’s technology is present in 10 million commercial building where Forge Analytics is a key tool to reduce energy waste and costs. Our chairman and chief executive, Darius Adamczyk, keeps sustainability on top of his priorities.
A significant chunk of Honeywell’s revenues come from traditional energy space, particularly oil and gas. However, what are the areas of strategic interest in cleantech?
Honeywell Ventures investments will focus on several areas:
“IP-dense” technology in the green hydrogen value chain, which is very close to Honeywell UOP DNA and where we can immediately help company to scale or improve their technology.
Energy storage software (batteries management systems, energy asset management) in close collaboration with our Honeywell process solutions (HPS) business, led by our president Ujjwal Kumar. HPS will have 160 megawatt-hours of batteries energy storage systems installed by mid-2021.
Plastic circularity areas as plastic recycling technologies, which can complement and improve our pyrolysis process, software to improve feed quality and bio-sourced plastics. Here again the priority is to support our sustainable technology solutions business, generating value for the investee as well for Honeywell.
What challenges and opportunities you see in those areas?
The biggest opportunity (and challenge at the same time) is to partner with best sustainability startups globally and allow them to leverage Honeywell’s size to channel their innovative business models and technologies. Let me be more specific – generating tangible value for Honeywell and for the investees is the single biggest opportunity we have today.
Honeywell was recently defined the top industrial company (by market cap by Melius Research). With this size and global presence in aerospace, energy, commercial, industrial and residential buildings, supply chain productivity and safety we can really make the difference and create value for an early-stage company.
Is there a particularly exciting potential deal that you are already working on?
There are few deals we are actively working on – yet I would prefer to keep a low profile for now.
Previously you have led financing rounds and held a board seat at a portfolio company. Could you share some tips on best practices when in such a position for our readers?
Establishing, early in the venture evaluation process, the basis for a successful commercial partnership can be the single most valuable step a CVC can take. Let me be more explicit – even the largest CVCs funds in existence cannot really “move the needle” in a large corporation’s balance sheet only with potential or future financial returns generated. It is therefore crucial to keep the commercial partnerships and deployment potential high up in the priorities list in the early phases of an investment evaluation (especially, during the first weeks marked by enthusiasm…). It may seem as a very simple best practice but only very few CVCs are successfully implementing it in reality.