This Global Giant's VC Arm Invests In Technologies Of the Future With the world in the midst of what is being termed the fourth industrial revolution, most major corporates are concerned about keeping up and innovating fast enough to provide the kind of solutions asked for by customers, according to Arvind Vasu, senior vice president of Asia investments at ABB Technology Ventures.

Global technology giant ABB's venture capital arm prefers to invest in companies that have some collaborative capabilities with the Switzerland-origin firm.

"We prefer to ensure that they have a collaboration with an ABB business because otherwise ABB doesn't learn anything and neither does the startup get support to scale up and get whatever they are looking for," said Arvind Vasu, senior vice president of Asia investments at ABB Technology Ventures.

Vasu said unless there is some collaboration, they see that the investment isn't very successful.

Apart from VC investment, ABB also has an accelerator programme Synerleap, which offers mentorship, investment and access to the ABB network. Synerleap started by focusing on Sweden but is now present in eight countries.

In November, they chose three Indian start-ups who won at their pitchfest in Bengaluru to be part of the programme as well.

The start-ups that won were: Flutura Decision Sciences, an AI solutions company, Ecolibrium Energy which uses an Internet of Things platform to improve efficiency and uptime and Numocity Technologies which provides a platform for providing energy as a service.

Why Invest In Start-Ups?

According to Vasu, with the world in the midst of what is being termed the fourth industrial revolution, most major corporates are concerned about keeping up and innovating fast enough to provide the kind of solutions asked for by customers.

"If someone's already invented the wheel, then why reinvent it?" he said, explaining the idea behind most major corporates including ABB getting into the start-up ecosystem.

Gaetana Sapienza, who is head of operations at Synerleap, agreed and said, "you can be strong by yourself, but you can really be awesome if you partnership and work in an ecosystem, so that's what we see as an important way forward."

Focus Areas

Vasu said they invest in three different buckets: the factories of the future, the future of mobility and the future of smart buildings.

"The tech that we look at is quite broad...whatever takes us to the next level to the future," he said, adding, "our slogan is, let's write the future. that fits very well with start-ups."

Investment Thesis

While the accelerator is meant to support very early stage start-ups, the venture capital arm doesn't invest in paper ideas, said Vasu. For ABB technology ventures to get out there and take a stake in a start-up, it must have some kind of revenue stream and a prototype of their product that works.

They generally participate in Series A or later rounds but have made exceptions with some seed funding as well, he said.

In 2018, the firm, alongside IndusAge Partners, Bill & Melinda Gates Foundation and Qualcomm Ventures, led a $14 million Series B round in Binny Bansal-backed agritech start-up Stellapps.

Vasu said a certain momentum had come in the space of artificial intelligence and machine learning, so one could expect more investments there going forward.

From Synerleap's point of view, Hampus Scharing, who is head of collaboration for industrial automation, said he had seen a lot of potential in those areas as well and expects Bengaluru to become the industrial hub for such technologies.