Investing at the cutting edge of innovation, worldwide – ten years of Bosch venture capital
Stuttgart and Ludwigsburg, Germany – Ten years of investment, ten years of innovation: over the past decade, Robert Bosch Venture Capital GmbH (RBVC) has made a string of successful investments in tech start-ups. The venture capital wing of the Bosch Group invests up to 15 million euros in individual young start-ups, and also provides them with the know-how and contacts it has as a leading global supplier of technology and services. Apart from looking for a healthy return on the capital it invests, RBVC is also eager to help young companies develop new technologies. Here, the investment strategy focuses on complementary technologies or on business models that fit particularly well with the Bosch Group portfolio. “RBVC has successfully established itself alongside major institutional venture capital companies. Our VC wing provides us with valuable contacts to the start-up scene, and thereby makes a significant contribution to the Bosch culture of innovation, and thus its agility,” says Dr. Volkmar Denner, chairman of the board of management of Robert Bosch GmbH. The RBVC portfolio comprises over 35 pioneering technology start-ups from around the world. This international focus offers a clear strategic advantage in the field of disruptive innovations. “RBVC will continue to expand its portfolio of innovative start-ups, and thus ensure its success story continues,” Denner says. “Among its most promising investments are projects that will advance the development of automated driving and AI-based systems.” The Bosch venture capital subsidiary manages a total fund volume of over 300 million euros.
RBVC has successfully established itself alongside major institutional venture capital companies. Our VC wing provides us with valuable contacts to the start-up scene, and thereby makes a significant contribution to the Bosch culture of innovation, and thus its agility.
Dr. Volkmar Denner, chairman of the board of management of Robert Bosch GmbH
Presence in China boosts business
In view of the big long-term opportunities it sees in the Chinese market, RBVC has opened a new office there. “Our Shanghai office reinforces our presence in one of the world’s most dynamic markets,” says Dr. Ingo Ramesohl, one of RBVC’s managing directors. “Tech start-ups with interesting products and services are now emerging in China on an almost daily basis. Having a local presence will enable us to take on an even more active role in the country’s start-up scene.” The goal is to build on the company’s success in China and establish it in the local market as a leading investor in tech ventures. In particular, RBVC will be focusing on start-ups operating in the fields of artificial intelligence (AI), the internet of things (IoT), automated driving, augmented and virtual reality (AR/VR), and blockchain technology. From its base in Germany, RBVC has already been active in the Chinese market. To date, it has made a total of five investments there. Thanks to the organizational structure behind it, RBVC is one of the few non-Chinese investors in a position to make investments in renminbi, the local Chinese currency. The VC wing of Bosch operates out of five locations worldwide. The ability to engage in major technology hot spots, particularly Silicon Valley and Israel, will be crucial to the company’s long-term success.
Open innovation: speedier identification of new trends
Each year, experts from RBVC examine the new technologies and business models of over 2,000 start-ups from around the world. Only around a hundred of these make it to the shortlist. “We invest in six to ten carefully selected companies each year,” says the RBVC managing director Philipp Rose. “This strict process of selection is in line with our strategy of focusing – like an institutional VC company – on only the most promising investments. But even dealing with the start-ups we ultimately don’t select is interesting for us, because it helps widen the potential for innovation at Bosch.” RBVC regularly creates contacts between young companies and Bosch operating units. As a result, these start-ups may ultimately become a supplier, technology partner, or even customer of Bosch. This “open innovation” approach selectively involves external partners in a company’s own innovation process. It means that each party can benefit from the other’s experience and know-how. This business model, in which RBVC provides more than just venture capital, produces numerous win-win situations. “In addition to capital, we also offer know-how and operational support, which gets us directly involved in the start-up scene,” Rose says. “As a result, we get to identify new trends and opportunities a lot earlier than technology companies that aren’t involved in open innovation.”
“We are a tech investor and, as such, we often discuss highly complex technologies with start-ups,” Ramesohl says. “We are also prepared to take on the financial risk of investing in such technologies.” A look at the success of the past ten years confirms this. The current portfolio comprises thriving companies operating in areas such as blockchain technology, IoT, machine learning, and semiconductor development. Examples here include the British processor company Graphcore, which produces AI components designed to accelerate machine learning, and the Berlin start-up IOTA, which is developing a cryptocurrency for payments on the internet of things – for example, at charge spots for electric vehicles. Both these business models complement the portfolio of the Bosch Group, and both exemplify the long-term orientation of RBVC’s investment strategy. The past ten years have also brought a number of successful exits. These include Movidius, a manufacturer of image processors, which was taken over by Intel, and GreenPeak, a developer of hardware and applications for wireless systems, which was acquired by the semiconductor producer Qorvo.
The Bosch Group is a leading global supplier of technology and services. It employs roughly 402,000 associates worldwide (as of December 31, 2017). The company generated sales of 78.1 billion euros in 2017. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. As a leading IoT company, Bosch offers innovative solutions for smart homes, smart cities, connected mobility, and connected manufacturing. It uses its expertise in sensor technology, software, and services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.” The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiary and regional companies in 60 countries. Including sales and service partners, Bosch’s global manufacturing, engineering, and sales network covers nearly every country in the world. The basis for the company’s future growth is its innovative strength. At 125 locations across the globe, Bosch employs some 64,500 associates in research and development.
Robert Bosch Venture Capital GmbH (RBVC) is the corporate venture capital company of the Bosch Group, a leading global supplier of technology and services. RBVC invests worldwide in innovative start-up companies at all stages of their development. Its investment activities focus on technology companies working in areas of business of current and future relevance for Bosch, above all, automation and electrification, energy efficiency, enabling technologies, and healthcare systems. RBVC also invests in services and business models as well as new materials that are relevant to the above-mentioned areas of business.
Additional information is available at www.rbvc.com