What would you say have been your most successful investments?
To date, we have invested more than €800m ($900m) in 180 companies across all divisions, while also making over 40 separate investments in VC funds – so, as you can imagine, there are a large number of success stories.
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 – 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.
Over the past four quarters, most of SVC’s deals have been in IT. Why is that?
As a company, Siemens is focused on driving electrification, automation and digitisation, so it makes sense that our investments are in startup companies with digital technologies that align with these goals. Quite simply, it is these pioneering companies that can help Siemens retain its technological edge in order to ensure the very best service and offering for clients.
How has SVC’s strategy evolved, and how does your approach compare with that of your peers?
Our goal remains to identify and finance young companies during their startup phase and to provide established companies with additional capital for their growth plans. Through our portfolio companies, we offer our customers new technological solutions and tap into new markets in our divisions’ areas of business – electrification, automation, digitisation and healthcare.
In short, we manage the venture capital assets of each Siemens division, investing them to generate strategic value for the company as a whole. To ensure these investments align closely with each division’s business strategy, we work closely together to understand their individual needs and vision before screening the market for suitable investment opportunities.
What are your thoughts on the evolution of corporate venturing and its impact on innovation in the industrial sector?
VC as an industry has a key role to play in fostering technological progress. Certainly, we are significant in ensuring that Siemens stays at the very forefront of industry innovation – we focus our investments specifically on companies whose technologies and vision have the potential to drive change in the markets Siemens is active in. Speed of technological and structural change is rapid, and the startup community is at the very heart of the emergence of transformative technologies. Without a doubt, ensuring that we are in dialogue with technology leaders at the earliest possible stage holds a special appeal for Siemens.
But our approach to VC goes well beyond just providing funding. Our focus is on building strong partnerships, and we contribute our expertise to our portfolio companies, often with someone from SVC sitting on their board. Our goal therefore is to help them realise their potential, not simply to make a quick profit. We leverage Siemens’ global strength to expand into new regions, initiate development partnerships, integrate third-party products into our sales channels and conclude marketing partnerships. Hence our partnerships are always win-win, and this is how we think VC should be.
What investment trends do you see in industrial 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.
