Transcript ABB Technology Ventures

Jerusalem International Convention for Innovation & Business Development in Electricity and Energy
Girish Nadkarni -ABB Technology Ventures
Electricity 2013 - Keynote Address
www.abb.com/ventures
© ABB Group - Introduction to ABB Technology Ventures
October 15, 2013 | Slide 1
A global leader in power and automation technologies
Leading market positions in main businesses
Power
Products
Power
Systems
Discrete
Automation
and Motion
Low Voltage
Products
Process
Automation
$10.7 billion
36,000
employees
$7.9 billion
20,000
employees
$9.4 billion
29,000
employees
$6.6 billion
31,000
employees
$8.2 billion
28,000
employees
(2012 revenues)

ABB’s portfolio covers:

© ABB Group
April 8, 2015 | Slide 2
Electricals, automation, controls
and instrumentation for power
generation and industrial
processes

Power transmission

Distribution solutions

Low-voltage products

Motors and drives

Intelligent building systems

Robots and robot systems

Services to improve customers
productivity and reliability

145,000 employees in about 100 countries

$39 billion in revenue (2012)
MIT Technology Review
ABB Among Top 50 Disruptive Companies of 2013
© ABB Group
April 8, 2015
| Slide 3
Thompson Reuters
2013 Top 100 Global Innovators
© ABB Group
April 8, 2015
| Slide 4
ABB Technology Ventures Overview

ABB Technology Ventures (ATV) is the corporate venture capital arm of ABB

Goals:

Gain access to leading edge technologies and business models of strategic interest to
ABB

Increase the pace of internal innovation

Profitably invest ABB’s assets

Began investing in 2010

Approx. $150 million USD deployed so far

16 investments to date:

13 investments into companies

3 investments as Limited Partners into other VC funds

3 investment professionals, 1 technologist and 1 intern

Technology/market due diligence and portfolio company support from
businesses, industry sectors and corporate research

Report into a Board consisting of CEO, CFO, CTO and 3 other EC members
© ABB Group - Introduction to ABB Technology Ventures
January 12, 2012 | Slide 5
Investment Criteria

Target ~4 deals per year (not including refinancings)

$1-$20 million USD initial investment size

Stage and geography agnostic

Typically partner with leading financial VCs and/or other strategic investors

Indifferent to leading deal

Investment must meet traditional VC return requirements and have credible
strategic value to ABB:
Financial
•
•
Key Question

•
+
Strategic
25%+ IRR
Returns commensurate with
early-stage business &
technology risk
•
•
Would a financial VC invest?
•
•
•
Exposure/learning for ABB
Hedging bets among competing
technologies
Pre-M&A (Cisco approach)
Support nascent markets (Intel approach)
Would ABB like to own this company or
be in this space in the future?
Tight linkages with ABB business units and deep technical resources to ensure
additional value-add product pull-through and accelerated R&D
© ABB Group - Introduction to ABB Technology Ventures
January 12, 2012 | Slide 6
Why do we need a corporate venture capital group?
Emerging Technologies
Smart Grid
Cyber Security
Other CVC Groups
Renewables
Emerging Competitors
Low
Thousands of
Start-Ups
Proximity to core
technology
Other Sectors with Overlapping Interests
High
80 CVCs formed in 2011!
Proximity to
current market
Low
Teaching ABB businesses to be paranoid!!!
© ABB Group - Introduction to ABB Technology Ventures
January 12, 2012 | Slide 7
Why Corporates Invest in Startups – 3 L’s
Leverage
Leap
New technology
New market
New business
model
New technology
New market
New business
model
Not Mutually Exclusive
© ABB Group - Introduction to ABB Technology Ventures
January 12, 20121 | Slide 8
Current
technology
Current market
Current business
model
Emerging Trends & Technologies from Different
Universe….

Internet of things/M2M Communication

Big Data

3D Printing

Transfer of technology from consumer to industry

Cloud Computing

Software defined Anything

Cyber crime

Mobile apps and applications (some countries leapfrogging PC based
internet, e.g. Kenya)

Frugal and local (contextual) innovation (Kenya, Brazil, India, China)

Social media – 2 Way Communication (reputation, branding), Sourcing
(Über, AirBnB), Sharing (cars, bicycles, handbags, watches)

Crowd sourcing (there are people who are smarter or luckier)

Service Robots (vision, ease of programming, interaction with humans,
exoskeletons)

Autonomous cars

Biomimicry – learn from the master

Smart Cities – slowly but surely
Implications for:
1. Product
development
2. Business model
3. Competition
4. Disruption
…. But having long-term implications for ABB
Benefits of Working with a Corporate Investor
To Startups
• Validation for
company and
products
• Path to
commercialization
through financial
assistance and
industry knowledge
• Market access
To VCs
• Technology &
business model due
diligence
• Access to, and
perspective on, new
markets and
geographies
• Stimulate additional
interest in VC’s
portfolio companies
Source: Partnering with Corporates, Cleantech Group Report
© ABB Group - Introduction to ABB Technology Ventures
January 12, 20121 | Slide 10
To Corporates
• Expand portfolio of
customer offerings
• Validate potentially
new technologies at
low cost
• Insight into
companies for future
acquisition
• Inspire additional
innovative thinking
across the
organization
Areas of Interest 2013
Priority in Declining Order
Reports released
Theme Based
Big Data
Applications beyond
Smart Grid
Internet of Things
Applications across BUs
Incl. “real time everything”
Active Search
3D Printing
Products & spare parts
Next gen. manufacturing
Sector Strategy
to be prepared
Smart manufacturing
Connectivity, interface,
Predictive Maintenance
Service
Software
Micro-Grid
Distributed Generation
Home Automation
Multiple sensors,
convergence,
Discrete manufacturing
& Robotics
Intuitive & easy programming
Energy Efficiency
Industrial EE
Building EMS
Demand Response
Lighting Technologies
Building and Industrial
applications
High Potentials for 2014
Urban Mining
Waste to Energy
el. Power + Heat + Recycling
Partly covered in other topics
supervision, optimization, control
Geothermal
and co-development
Sub Sea Technology
Oil/Gas
ABB Technology Ventures February 4, 2013 | Slide 11
Smart City
G2L; P2G & P2L
Power to Gas & Liquid
Energy storage, Gas utilization
Unconventional O&G
Water treatment
LNG regasification
General Areas of Interest – Evaluated Regularly
Renewables
Smart Grid
Energy Efficiency
Other High Potentials
Solar PV
multi-function / BIPV
Residential
Big Data
Applications beyond
Smart Grid
Energy Efficiency
compressed air systems,
building EMS
Discrete manufacturing
Smart manufacturing
connectivity, interface,
Solar BoS
(micro) inverter
& power optimizer
Micro Grid
Distributed Generation
Predictive Maintenance
Service
software
3D Printing
(in-house study)
DC Technologies
FCL, DC CB, LV
Internet of Things
M2M
(in-house study)
Tidal energy
and co-development
of PTO
Demand Response
Partly covered in other topics
Wave energy
in synergy with APL &
far off-shore
Energy Storage
utility scale
Measuring
advanced sensors
Sensor,
High speed motion
motors and
components
Geothermal
and co-development
Data Center Cooling
incl. server and PCB cooling
Home automation
multiple sensors,
convergence,
Power Electronic
Power Quality
inverter efficiency
Solar CPV
HCPV
Cyber Security
software
Waste heat recovery
advanced heat pump
small scale generation
Sub Sea Technology
Oil/Gas
Electric and oil separation
Wind technologies
small wind /
distributed Generation
Smart City
Partly covered in other topics
No real company strategy
Lighting Technologies
LED control,
P2G
Power to Gas
Actively investigating sector / companies
Passive search – few appealing targets
Energy storage, Gas utilization
Decline unless exceptional
Moving from opportunistic investing to theme and
sector driven investing

Identify emerging sectors in conjunction with businesses and industry sectors

Conduct thorough analysis and mapping of targeted sector to identify best
technologies and investment targets

Study staffed by combination of ventures, business and research teams
Sector Studies Finished

Energy storage / utility scale battery technologies

Micro Inverter and Power Optimizer

Waste to Energy / Urban Mining

Lighting Control – industry overview

Waste Heat Recovery

Wave and Tidal

Solar CPV

Big data

Internet of things

3D printing
Investments – 1 of 2
Company
As of October 1, 2013
Board
Amount1 Status Involvement Co-Investors
Location
Description
1
Redwood City, CA
USA
Smart grid communications network
using self-forming, self-balancing,
and self-healing radio mesh
$20
Active
Observer
GE, Investor Growth
Capital, VantagePoint,
MissionPoint, zouk
2
Foxborough, MA
USA
Cyber security company with
applications for power systems,
automation, and control systems
$5
Active
1 seat
Deep River Ventures
3
Santa Clara, CA
USA
Data center automation and energy
efficiency management software
$9
Active
Observer
DFJ, Point Judith, Good
Energies, Department of
Energy
4
Rehovot
Israel
Advanced LIDAR technology for
remote sensing of wind vectors to
optimally align turbines
$3
Active
Observer
Cedar Fund, Evergreen
Venture Partners, DFJ
5
Edinburgh
UK
Marine energy conversion using
Oyster wave power technology
£18
Active
2 seats
Sigma Capital, Royal
Academy of Engineering,
Scottish Enterprise, et al.
6
San Francisco, CA
USA
Electric vehicle (EV) fast charging
technology
$19
2 seats
Public (NASDAQ: ECTY)
7
Brookfield, CT
USA
Direct current (DC) power supply
systems for the data center
N/D
4 seats
Oak Hill
2
Asset
Sale
Sold to
ABB
12/12
1 = All amounts in millions unless noted
© ABB
April 8, 2015 | Slide 14
2 = PIPE
Deals listed in chronological order of initial ATV investment.
Investments – 2 of 2
Company
As of October 1, 2013
Board
Amount1 Status Involvement Co-Investors
Location
Description
8
Fremont, CA
USA
Highly efficient concentrating
photovoltaic (CPV) solar systems
$20
Asset
Sale
2 seats
Oak Investment Partners
9
Tel Aviv
Israel
Cloud-based network monitoring
and leak detection software
platform for water utilities
$3
Active
1 observer
Emerald Technology
Ventures, Gemini Israel
Funds, Giza Venture
Capital
10
Orkney
UK
Advanced hydrokinetic device for
floating tidal streams and run-ofriver applications
$8
Active
2 seats
TOTAL, Fred Olsen
11
Czech Republic
Technology park and Incubation
center focused on direct current
(DC) technology in the LV and MV
space
€2
Active
N/A
E.ON, Philips,
Alliance Federated Energy
12
Zug
Switzerland
Technology + services company
focused on wind farm performance
through yaw alignment optimization
€1
Active
1 seat
Yellow & Blue Investment
Management,
b-to-v Partners AG
13
Santa Clara, CA
USA
Electroadhesion technology for
robotics, material handling and
industrial automation
$1
Active
1 seat
Formation 8 and Nike
1 = All amounts in millions unless noted
© ABB
April 8, 2015 | Slide 15
Deals listed in chronological order of initial ATV investment.
Fund Investments
Location
Beijing, China
Zurich, CH / Toronto, Canada
Juno Beach, Florida USA
Founded
2001
2000
2012
AUM
$271MM USD
€300MM
New fund, sponsored by NextEra Energy
Managing Partner
Don Ye
Gina Domanig
Alex Weiss
Fund Name
China Environment Fund IV (CEF IV)
Emerald Cleantech Fund III
ClearSky Power & Technology Fund
Fund Size
$350MM USD
€100MM target (€25MM first close)
$350MM target
Strategic
Focus
Targeting investments in cleantech
companies in China or those having a
nexus to China with a mix of earlier stage
to expansion stage companies
Targeting €4-10MM investments in
early and expansion stage cleantech
companies in Europe and North
America
Strategic fund for NextEra Energy
Representative
Investments
ET Solar
China Hydroelectric Corporation (CHC)
Haiyuan Group
Neo-Neon
NetPower
China Sunergy
LDK
TaKaDu1
Evergreen Solar (Nasdaq: ESLR)
Pemeas (acquired by BASF)
RuggedCom (TSX:RCM)
River Basin Energy
Synapsense
Xunlight
iControl
Clean Energy Finance
1 ABB
© ABB
April 8, 2015 | Slide 16
Technology Ventures co-investment
Targeting late/growth stage equity
investments in renewable energy
generation, smart grid, energy
efficiency, energy storage and air &
environment
Other undisclosed investments
ATV Team
Girish Nadkarni
President,
ABB Technology Ventures



Zurich
Kurt Kaltenegger

Head of Technology

Zurich
Andrew Tang

Managing Director

8 yrs. at ABB; prev. responsible for ABB’s global cost
migration program and ran global automotive business
for the Robotics Division as Sr. Vice President
Prior: EIR, View Group; President & CEO, vSimplify;
Mgr., Corp. Dev., GE; GE Capital; Prudential Capital
Nominated as one of the top 100 global corporate
venture capitalists

20 yr. ABB veteran; fmr. head of high voltage circuit
breaker development; global medium voltage products
BU technology manager
Director of Research Center in China (Beijing) and CTO
for ABB CN; more than 30 patents

10+ yrs. VC experience; founding Managing Director at
DFJ DragonFund; exits include Broadbus (MOT),
Zettacom (IDTI), and NuTool (ASMI)
Prior: Partner, Infineon Ventures; Credit Suisse First
Boston (investment banking); Intel and Motorola

Formerly VP at Core Capital Partners ($350MM
Washington, DC fund focused on enterprise software)
Notable deals: TaKaDu, Validus, Valen Technologies
Prior: Microsoft Corp., Liberty Associated Partners (VC),
Dean & Company (mgmt. consulting), 3 start-ups







MBA, Harvard
LL.M., UVA
LL.B., University of Mumbai
B.Com, University of Mumbai
PhD, Montanistic U. Leoben
(solid state physics &
superconductivity)
MSc, Karl-Franzens
University Graz
MBA, Wharton
MSEE, MIT
BSEE, UT Austin
Palo Alto, CA
Grant Allen
Senior Vice President



Washington, DC
© ABB
April 8, 2015 | Slide 17

MBA, Wharton
BSE, Duke
How to Work with a Corporate VC

Find companies which have in interest in your space

Educate yourself about their strategy and priorities

Approach their corporate venture group – Helpful but not
critical that it be through a common connection

In your presentation:


Show how your technology will help them strategically

Discuss the type of support you expect from them other
than money
If a deal develops, ensure that there is buy-in from the
relevant business unit
© ABB Group - Introduction to ABB Technology Ventures
January 12, 20121 | Slide 18
© ABB Group 091111091023- ATV
Introduction
Investment
to ABB
Strategy
Technology
& Policy
Ventures
November
April
8, 2015
1, |2011
Slide| 19
Slide 19