France-based aerospace products manufacturer Safran will look to invest “a few million” euros in each of its portfolio companies, and plans to make three to four investments each year, co-director Grégoire Aladjidi has told Global Corporate Venturing.
Safran announced the formation of the €50m ($56m) Safran Corporate Ventures (SCV) fund two weeks ago, and plans to invest in startups developing technology in the three sectors in which the company operates – aerospace, defence and security.
“The sweet spot of the fund is series A and B, but SCV does not limit itself and can also target earlier or later stage companies,” Aladjidi said. “The objective is to invest a few million in each company with a selective approach, say three to four investments per year, knowing that the envelope is €50m for the first three years.
“This fund is a new tool to plug Safran into the startup ecosystem, together with the open innovation strategy, partnerships with start-ups and research centres, etc.
“The objectives are mainly to benefit from the innovation done outside the group, to accelerate our innovation, to integrate external innovation in our offer and better anticipate future market trends.”
SCV’s will invest in portfolio companies with the aim of helping form partnerships through which its parent company can benefit.
Each investment will be sponsored by one of Safran’s group companies, which will sign a co-development or commercial memorandum of understanding with the startup in question, Aladjidi said, and the companies targeted will reflect an expansion in Safran’s focus, as opposed to its existing activities.
“It is a complementary tool, to address fields which are at the edge of the group today but which may become core in the future, whereas M&A is relevant for key strategic core businesses,” the director said.