Looking for the next disruption
Robert Bosch Venture Capital GmbH invests in promising start-ups around the world
Robert Bosch Venture Capital GmbH scours the globe for start-ups that have the potential to rewrite the rulebook for entire industries. Earnings potential is naturally also a factor, but the primary goal is to secure Bosch’s innovation leadership.
A camera that can detect diabetes-related damage to the retina of the human eye; an electric motor that lets boats glide noiselessly over the water; smart glasses that display elevation profiles to cyclists and guide workers around warehouses. These three technologies could scarcely be more different – and yet they have one crucial thing in common: they all originated from start-ups and have the potential to revolutionize their respective industries. For the managing directors of Robert Bosch Venture Capital GmbH (RBVC), Ingo Ramesohl and Philipp Rose, as well as their colleagues, that’s reason enough to invest in these new companies.
“We’re looking for the kind of disruptive innovations that could turn a market completely upside down. We want to make the Bosch divisions aware of them, with the ultimate aim of securing and expanding our innovation leadership.”
Since 2007, the daily task of associates at this Bosch subsidiary has been to put out feelers to find what would normally fly below the radar of a large company like Bosch — at start-up conferences, at trade fairs such as the Mobile World Congress, and on the internet. RBVC currently holds a stake in some 30 companies around the world, with its share ranging from 5 to 25 percent. But Ramesohl is quick to point out that this is not about making competitors stronger, but about investing in “complementary technologies or business models.” In any event, he continues, the important thing is to be directly active on the start-up scene, and in this way to detect trends and emergent innovations early on.
2,000 companies
were assessed by RBVC trend scouts in 2016, of which roughly 100 were presented to the Bosch divisions
Acquiring the start-ups is not part of the plan. However, RBVC usually holds its shares in a company for several years until an appropriate exit opportunity presents itself. To minimize risks, the investments are spread across a variety of industries, regions, and stages of company development. RBVC currently has hundreds of millions of euros available for investment, split into three internal funds. Rose says, “All in all, for each fund we have to get back more than we put in.” Movidius, for example, proved to be a best-case scenario: RBVC invested in this manufacturer of specialized image-processing chips in 2013. In 2016, Movidius was sold to Intel in Silicon Valley – at many times the original price.
Automation and electrification
“Artificial intelligence and deep learning are the key technology drivers for innovations over the next decade. Today, they are facilitating the evolution of technologies such as autonomous systems, virtual and augmented reality, and security technology. In the future, they will feature in more and more areas of our daily lives, such as household appliances and consumer electronics. All these are major focal points for Bosch. RBVC is thus an active investor in hardware and software for artificial intelligence and deep learning. One example is our stake in Movidius, the world’s leading manufacturer of image-processing chips, which was recently bought by Intel. We have also invested in the Graphcore hardware company, which is poised to fundamentally change how deep-learning problems are processed. Turning to software, one of the ventures we have invested in is ADASWorks, a company that has developed a new software architecture for autonomous driving. Its self-learning algorithms are much more efficient than today’s state-of-the-art technology.”
Enabling technologies
“The enabling technologies cluster invests in companies active in areas such as the internet of things, human-machine interfaces, and modern software technologies. In the coming years, the internet of things will transform many areas of industry that are of key importance for Bosch, such as smart buildings, smart cities, smart transportation, and connected industry. Pubnub and Foghorn are two companies in our portfolio that are driving the development of the internet of things. Another trend we’re seeing in this field is the enormous potential for change that lies in virtual reality, and augmented reality in particular. WaveOptics, for example, is one of our investments that has spawned a revolutionary technology for designing and producing amazing and truly wearable augmented-reality glasses. One outstanding example of the collaboration between Bosch and the companies in the RBVC portfolio is the company Flybits. Its software technology is the basis of context-specific functions in the smart community app made by Bosch Software Innovations and FivePoint for the San Francisco Shipyard.”
Energy efficiency
“Urban mobility is rapidly becoming increasingly complex. Various trends such as vehicle sharing, connectivity, electrification, and automated driving will influence the ways in which people move around the cities of the future. In this context, energy efficiency and air quality will take on bigger and bigger roles. RBVC helps the Bosch Group identify disruptive innovations in the energy-efficiency field, as demonstrated by our investment in Torqeedo. This company is the world’s leading manufacturer of electric drive systems and full-hybrid solutions for boats. These technologies help keep our local waterways clean and reduce emissions from water traffic.”
Healthcare
“Two of the main innovation drivers in the healthcare sector are IT and connected devices. That’s why RBVC has invested in companies that use IT to tackle the major challenges of diagnosing and treating certain chronic diseases. Two of these companies in particular are set to make groundbreaking changes relating to diabetes – unquestionably one of the biggest health challenges of the 21st century. The first is Optomed, an innovative medical device manufacturer. It has developed a hand-held camera that can be used to examine the retina and diagnose various eye diseases, including diabetic retinopathy. Optomed is working with Bosch to make this technology available in emerging markets. Another example from our portfolio is Emperra, a company that has revolutionized the treatment of diabetes using a radio-controlled pen. Emperra’s complete system provides caregivers and relatives with comprehensive, objective data for monitoring the condition of diabetics. This improves treatment and helps rule out potential complications.”
Summary
Robert Bosch Venture Capital GmbH (RBVC) helps secure the Bosch Group’s innovation leadership. It does so by investing in promising start-ups around the world. RBVC currently has stakes in some 30 companies.