Corporate Venturing Powers Progress

In the newly formed ABB Technology Ventures (ATV) wing of ABB Electrification, our team is pushing the boundaries on the speed of invention, collaboration and open innovation.

Building Value with Start-up Partners

At ATV, we focus on Corporate Venture Capital (CVC) as our instrument of choice. Why CVC rather than just standard financial venture capital (VC)? Because CVC isn’t just about providing and making money, it is about building value together with our start-up partners. Every dollar from a CVC is worth more than one from a financial investor, because the “smartness” of a CVC dollar yields value in terms of domain knowledge, market accessibility and qualified research and development (R&D). CVC has the potential to add more value and get more distinctive products out on the market faster. That is the potential – but it doesn’t come easily.

Progress through Digitalization

ABB has a powerful heritage of developing state-of-the-art hardware; now, it is critical that we broaden our horizons in the software space as well. The integration of the two will allow us to build the smart solutions we need to make business, transport, and infrastructure sustainable.

Since 2010, ABB has invested more than $200 million globally in deals with start-ups focused on digitalizing the industry – from robotics, artificial intelligence, and machine learning, to electric mobility and distributed energy. These disruptive technologies are already transforming the way we live and work.

Speed and Intrapreneurship

Start-ups are by their very nature entrepreneurial, challenger brands that want to disrupt the status quo. They bring different personalities and skill sets, which, coupled with our corporate muscle and experience, and channeled in the right direction, can be an incredibly powerful force.

To make it work, we at ABB must embrace new ways of thinking, so that the threat of change becomes the possibility of change. Top management supports us taking on the necessary short-term risk to achieve a long-term vision.

We have to remember that it’s not a sprint, but a marathon. On average we will hold the companies we invest in for seven years, so we need to have an eye on the target, and that’s not in the next quarter, but almost the next decade.

Our CVC team likes to do deals, and I like to move fast. We have to be intrepreneurs, educators and challengers. Working with our six divisions, we act as the bridge between the start-up and

ABB, pushing the pace of our publicly listed mothership to match the tempo of our start-up partners.

Being a Change Ambassador

I believe all good leaders are very “human”. We are all people first, and employees second. My team and I build strong personal relationships. We trust each other, we laugh together. In our business, you take risks, so you have to be open and honest, and if anything goes wrong, you talk about it and adjust course quickly. If I were to give one piece of advice, it would be to give your team members the freedom and trust to be advocates for your organization. Let them share their technological vision and the value that CVC can bring to the community.

We all have to be good ambassadors for ABB in the broader community, to forge relationships and work with industry and government partners to make our world safer, smarter and more sustainable.

Extra challenges in a virtual world

There is no doubt that the past 12 months have brought additional challenges. I have never before invested in companies without having visited their offices, and meeting people face-to-face, getting a feel for their culture and work ethic. But that’s just the reality we are facing. We have to keep going, because the technology advancements won’t stop!

It’s the same with my team – not only are we spread across the globe, but in fact we have never once met in real life. I used to sit in a co-working space with a sign that read “a meeting without good coffee and a nice snack is called an email!” Physical meetings with people give you so much energy, but now we just have to find new ways to keep that energy going, as we continue to grapple with the challenges of a virtual world.

The future is now

Software is the future and it’s devouring the world. Data software applications are growing exponentially in value, and things are only getting faster. If you’re not moving fast now, it will be incredibly difficult to catch up. That’s why every third dollar invested in venture now comes from CVCs, and 75 of the Fortune 100 Companies have their own CVC teams. CVCs are here to stay. It was an honor this year to be named the Rising Star by Global Corporate Venturing (GCV)! Kudos goes to our entire CVC team, and also to the CVC community at GCV including James Mawson and Felix Dewe. It really shines a spotlight on the importance of venture capitalism in innovation, and the role we play in shaping a safe, smart and sustainable world for future generations.

The truth is, in our fast-paced world, the biggest risk is not doing anything. We cannot stay still – venture is all about speed of innovation, and we have to keep moving!

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About the author

Malin Carlstrom

I am Head of Ventures at ABB Electrification. My team scouts for and acts on investment opportunities globally in startups and scaleups that are of strategic relevance to ABB Electrification’s current and future operations.
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