The automotive supplier is now also successful as a technology investor.
(Photo: dpa)
Stuttgart The world’s largest automotive supplier, Bosch, has been providing venture capital to start-ups for almost 15 years. Four funds have already been launched. Now the fifth with a volume of 250 million euros is added. “The tickets are getting bigger and the deals more expensive,” says Ingo Ramesohl, Managing Director of Robert Bosch Venture Capital, the group’s investment arm, the Handelsblatt.
In the USA, after Sunnyvale in California, the Swabians are now opening a second office in Boston. “We want to be even closer to the scene and be able to support our holdings on the east coast more directly,” says Ramesohl. Among other things, the proximity to the elite university MIT and the deal flow played a role. “We benefit from working together because we can often solve more complex tasks faster, more efficiently, and better together,” says Bosch CEO Stefan Hartung.
In addition to capital, the focus is also on know-how and operational support. “We see ourselves as deep-tech investors and also discuss very complex technologies with the start-ups,” says Ramesohl. To date, Bosch has primarily invested in companies in the fields of artificial intelligence (AI), chip and quantum technology, and software.
According to Ramesohl, responses to changed geo-political and economic-political framework conditions such as semiconductor shortages or disruptions in global supply chains are currently in demand. “We want to track down technology trends that can provide relief in such situations.”
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Like Bosch, many German corporations are trying to use venture capital to catch up with the big US tech corporations when it comes to new technologies. One does not deal with the start-ups any differently than a financial investor and does not want to appropriate the technology, emphasizes Ramesohl: “Otherwise one can quickly lose one’s reputation in the VC business.”
>> Read also: Three reasons why young venture capital firms are often more successful
In the meantime, Bosch has a lot to lose in the industry. More than 50 start-ups are currently active in the portfolio. With the new fund, the company is likely to have invested or committed a total of almost one billion euros. That’s more than at BASF, Porsche or Shell. BMW had recently caught up with a fund of more than 300 million euros.
Overall, however, the commitment of companies is significantly smaller than that of pure venture capital investors, who, according to the OECD, pump three times as much capital into the scene.
Chinese startups have to comply with governance rules
“As a global investor, we are part of the start-up scene to find the next disruptive innovation that will turn entire markets upside down,” explains Ramesohl. He is now traveling around the world. His team of almost 30 specialists combs through more than 2000 start-ups every year. A good hundred of them make it onto the shortlist.
In China, the Bosch subsidiary Boyuan Capital has established an investment platform that other companies can use to invest in local currency funds with venture capital. However, all Chinese holdings would have to comply with the group’s governance rules.
“As a global investor, we are part of the start-up scene to find the next disruptive innovation that will turn entire markets upside down.”
(Photo: Bosch)
“We are also very, very successful with exits,” says Ramesohl. Bosch ranks in the top tenth among industrial companies in the venture capital sector. Ten percent of start-ups with a Bosch stake are already unicorns, meaning they have a valuation of more than one billion dollars.
>> Read also: New business area: Bosch is investing 500 million euros in technology for green hydrogen
Bosch held a 2.5 percent stake in Xometry, the operator of an AI-supported marketplace for on-demand manufacturing. The company is currently worth almost two billion euros on the stock exchange. The IPO of the investment IonQ, which was the first company for quantum computing to be listed on a stock exchange, was of a similar dimension. Ramesohl does not want to give any information about the profit from the sale.
The stake in Basic Semiconductor, a manufacturer of silicon carbide power electronics, is closest to Bosch’s core business, especially in electromobility. The start-up Motive, formerly “Keep Trucking”, operates a fleet management solution in the USA to reduce truck costs and fuel consumption.
The hottest unicorn in the Bosch portfolio remains Graphcore, most recently valued at over $3 billion. The British start-up is developing new types of processors that industry experts believe are superior to Nvidia chips. The entire automotive industry is currently dependent on the chips from the US group for their new vehicles with central computers.
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