VC/CVC Hot Trends?

Sapphire is the financial arm of the German Multinational SAP, although it operates as a fully independent and separate VC fund.

In this discussion between our CEO Marco Marinucci and Sapphire’s Managing Director Rajeev Dham, we get a good pulse of where we stand in today’s VC investment trends. Specifically we address 3 hot topics:

- Do portfolio companies need to stay private longer?
- What’s the impact of AI in today’s processes of growth VCs?
- What would be a killer feature that is still to be developed?

All Startup roads lead to … Google

In this MTC Marco Marinucci is sitting with a mentor and old friend of MTB, Uttam Tripachi, head of Startup Accelerators in Americas and Global Dev Communities at Google. In addition to a review of the current opportunities for startups to be accelerated within the Google ecosystem, we discuss about what regions around the world have implemented effective policies to
promote innovation, with a deep dive on why India today is positioned as the startup hub with massive potential opportunities.

How to master the Venture Client? Trust the process

Trust the (Venture Client) Process

DB Schenker is a subsidiary of German rail operator Deutsche Bahn that focuses on logistics. They have an innovation unit called Global Ventures and Innovation led by Patrick Hofmann that runs a wide spectrum of activities ranging from CVC and Venture Building to Market Intelligence. Among them, an important pillar is Venture Client, which is led by Ronja Stoffregen, Head of Global Startup Management. In this Mind the Chat we sit with Ronja and deep dive into the process that brings companies over the time to master the collaboration with startups and produce impact.
What makes you proud of your job? I asked Ronja at the end of our conversation. “The fact I can contribute to create value both for my company and the startups we work with”.
And Ronja and DB Schenker is definitively doing it since over 40 startups successfully passed the pilot phase and moved into industrialization.

The Siemens “Venture Builder”

The Siemens “Venture Builder”
“Siemens core business is automation. We are good at automating the knowns. The challenge is how to automate the unknowns”.
In this Mind the Chat we go through the D.I. (Digital Industries) Validation Engine with Franz Menzl, Vice President Technology & Innovation and CTO at Factory Automation at Siemens.
Ideas pass through a nine month Validation (divided in two phases, where they respectively have to talk to 100 customers and secure 2-3 pilot customers) and 12 month Incubation.The teams decide by themselves whether to move (or not) to the subsequent phases.
Here are the top 5 key learnings:
In Innovation nobody can pick up winners.
But you need to learn ahead of investment.
80% of Ideation is listening to customers.
Fast implementation of innovation is key.
Ask the right questions at the right time.

No longer a Corporate Accelerator. More than a Venture Client

Open Innovation models are evolving, we often say.
Describing the Zurich Innovation Championship, Joel Agard, Group Head of Innovation, Zurich Insurance Group, says that it is not an accelerator but it is more than a venture client.

Through its 40 group's companies Zurich Insurance Group scouts over 3000 startups per year. About 150 are invited to the local “Super Days” organised by in the different markets. Of them about 50 are admitted to the Global Round in front of the Excom. 15 enter the 4 -month program that has the goal of validating the solution through 3 sprints: “Desirability”, “Feasibility” (technical, regulatory, ethical, legal/compliance, brand consistency) and “Viability” (that means producing a joint biz plan)

No equity is involved. The outcome of the program - that is more a POC deployment rather than an Accelerator - is to start a partnership or licensing agreement that might eventually lead - down the way - to an investment or acquisition.

Which KPIs?
“Our goal is to have green or red flags. We are not interested in having many pilots (“we are not Lufthansa”) but producing results. Therefore we try to reduce the amber lights that at the end turn into zombie projects that waste resources (both for us and for the startups).”

Francesco Starace: Life after 23 years at Enel

As the CEO of Enel’s group since 2014, Francesco Starace was the main driver to turn the group into the major producer of renewable energy in the world. In this Mind the Chat we discuss about highlights (and possible regrets) of Francesco Starace's long tenure at Enel (23 years in total, of which 9 as CEO), the future of energy, the potential of key innovations in the field, and, lastly, about his next steps.

Open Innovation starts internally

Open Innovation starts internally

- “Think carefully how you promote, push and facilitate the deployment in house of external innovations. That’s where most of the corporates are not performing so well”

- “Do not start the innovation journey with the CVC. You need to have prior expertise working with startups”

In our Mind the Chat with Thierry we deep-dive into the innovation organisation and initiatives of the national postal service of Switzerland (a public company owned by the Swiss Confederation that is one of the largest employer in the country with 54,000 employees). From its intrapreneurship program (Postidea) to the innovation antennas (Silicon Valley, Tel Aviv and Shanghai) and CVC (Swiss Post Ventures).

“For us the CVC is also a pre-M&A tool.”

Swiss Post Ventures invests ahead of business and Open Innovation fosters collaborations between portfolio startups and business units. If it works and is strategic, they might acquire it, as they did with Bring!, the Swiss startup digitalizing the shopping list in Europe.

(Open) innovating at scale in the public sector

(Open) innovating at scale in the public sector

Buying innovative solutions is different than buying a table.
A different procurement approach is needed..
“Public organisations need to throw the Transactional approach out of the window and move to a Collaborative approach”
That’s the key message from Rikesh Shah, Head of Open Innovation at Transport for London. Rikesh has been behind many of the big innovations TfL has introduced in the past 20 years: the Smart ticketing, the Open data, the E-Scooters, the launch of an Innovation Hub (the first in the world for a public entity) and recently the Elizabeth Line.

“With the open data approach for every pound we spend, we get 130 back.”
It has not been a walk in the park though.
“There are big barriers but it can be done”. Some obstacles to be overcome include:
- Wrong definition of innovation (innovation is “not shiny things your engineers produce”)
- Solving the wrong problem
- Culture & Fear of Failure
- Poor Scouting (“solutions have to be searched globally, local on local is not a solution”)
- Ineffective testing
- Procurement

“The public sector can work with startups and must get a return. However there are multiple avenues other than equity. Equity does create a challenge in the public sector. Startups can create value and revenue with the public sector by having both their IP and equity protected”.

We can also work with the private sector. We initiated corporate partnerships with companies like Daimler,Bosch, and Waze. We offered them to use London as a test bed for deploying innovative solutions that can be commercialized in other cities”.

“There are 100+ sensors in a car. We can use those sensors (that are super expensive to buy) to identify and prevent road risks. This is an example of our partnership with Daimler Mercedes Benz. Now we are getting data from fleets, freights, cyclists…”.

More on the conversation between Alberto Onetti and Rikesh Shah.

“Innovation cannot be governed. It has to be connected.”

“Innovation cannot be governed. It has to be connected.”

My job as Head of Volkswagen Group Innovation?
“Organizing a central common innovation unit in a group with 10 different global brands and generating synergies. There are common tech challenges across the brands: decarbonization, software, autonomous driving, customer interface, …
Additionally companies need to be present in the main innovation hotspots, from Asia to Silicon Valley and Israel. We are there as a group.”
So says Nikolai Ardey, Head of Volkswagen Group Innovation, who also reveals the secret of Open Innovation.
“Landing innovation with the right level of maturity”, at least if you want to minimize the “not invented here” syndrome.
During the Mind the Chat Nikolai describes the different initiatives run by the group’s brands (Konnect Volkswagen Group Innovation Tel Aviv, Porsche APX Accelerator, Skoda Auto Digital Lab, Seat Start4Big) as well as provide insights about the $300M CVC fund dedicated to startups in the decarbonization space Volkswagen is about to launch. It will be an independent fund open to external LPs.

You need to have a strong business sponsor to deploy innovation

In this Mind the Chat Alberto Onetti sits with Alexandra Serizay, Chief Tech & Services Officer of Sodexo, French global leader providing catering, facilities management, employee benefits and personal home services to 100 million consumers daily in 53 countries.
Sodexo innovates both externally (partnering - through its Accelerators- with over 100 startups and scaleups from all over the world) and internally (leveraging bottom-up ideas from its own employees).
Main challenges? “Scaling startups inside the organisation requires overcoming cultural, procedural and IT integration challenges and properly managing expectations.”
At the end, whoever runs open innovation in large corporations needs to be capable of bridging the world of startups - that is used to move at warp speed - with the internal organization that has its own speed and pace.

Growing an internal venture is one of the hardest team sports

Growing an internal venture is one of the hardest team sports.

Why is it so hard?
Internally it is difficult to get the green light for innovation projects with a payoff in 10 years. And, since they will be burning money for a while, at the end they are perceived as a cost center. Then get ready for a constant battle inside the executive team.
But it is a battle that is worth fighting for. There is no alternative to innovation.

When to build a new venture inside the corporate environment?
- When the business case is good enough to run an independent company
- When you innovate outside the core business

Which metrics to be used to measure internal ventures?
- Ebit is not a good proxy (since they are burning money)
- Annual Recurring revenue are a better metric (installed products)

Which skills are required?
“You need somebody with the credibility to sit in a boardroom and the ability to work in a startup garage”.

This and more in the Mind the Chat with Daniel Szabo, CEO Körber Digital that has been recognized as “Rising Star” as part of the 2022 Corporate Startup Stars Awards. Co-hosting the chat Ralph-Christian Ohr, member of the CSS Judging Committee.

LG Nova: a new Venture Client model

LG Nova is among the new kids on the busy block of Silicon Valley based corporate innovation entities.
After the official launch of its first Innovation Festival, LG Nova has been extremely active looking for startup solutions in Digital Health, Metaverse & Gaming, Electric Mobility, Display Solutions, and Smart Lifestyle.
In our conversation with Sokwoo Rhee we cover the details of how LG Nova is structured, its macro objectives and relationships with other entities of the LG galaxy (ie LG Tech Ventures).