Siemens Venture Capital, the corporate financing arm of Europe’s biggest engineering company, is launching a new, $100 million fund to back early-stage startups working in the areas of industrial automation and other digital technologies that can transform manufacturing. This comes after Siemens made two notable startup investments over past few months — in 3D visualization startup Lagoa, and CounterTack, the developer of next generation cyber security software.
Corporate venture capital has traditionally been considered “dumb money”, but as this TechCrunch post noted in November last year, some of them are increasingly looking more like traditional VCs. Indeed, in October 2013, 48 venture funding rounds valued at over $719M included CVC investor participation. This represented a 14% participation rate, the highest month in the CrunchBase dataset.
Engineering and manufacturing conglomerates such as Siemens and GE are increasingly looking at newer ways to leverage data and insights captured by their devices and machines. Combined with Internet and other digital technologies, this becomes what GE and several others describe as “the Industrial Internet.” As this NY Times story noted way back in November 2012, the lines dividing old-world engineering and new age software solutions are blurring. This shift is underscored by the rise of “Internet of Things”, where Google is beginning to look like General Electric, at least on the software side.
“As digitization and software are becoming increasingly important for manufacturers to compete in the global marketplace, the Industry of the Future Fund will support Siemens’ “Industrie 4.0” strategy by providing capital to those companies whose innovative technologies and vision have the potential to change the landscape of manufacturing and industrial automation,” said Siegfried Russwurm, CEO of the Siemens Industry Sector.
According to the company statement, this new fund will back start-up companies early in their lifecycle and aims to foster partnerships with companies, which will transform industrial markets or even create completely new ones through pioneering technologies .
We have requested Siemens to provide more specific details of this fund and will be updating after hearing from them.