Evonik goes into venture capital

German giant follows BASF, DSM example
 

Evonik Industries has announced plans to further strengthen its innovation capacity over the medium and long term by establishing a new Corporate Venturing organisational unit within its Innovation Management unit, which will be headed by Dr Bernhard Moler.

Via this, the company will invest up to €100 million over the medium term “highly promising start-ups and leading specialist venture capital funds”, mostly in Europe, the US and Asia. The investments will be focused on the global mega-trends most important for Evonik, such as resource efficiency, health, nutrition, and globalisation, supplemented by other specialised fields.

Executive board member Patrik Wohlhauser said that corporate venturing “supplements the Group's existing innovation processes and structures in an ideal way” as part of its growth strategy. “With corporate venturing we’re creating excellent opportunities for accelerating the development of new businesses and opening up future growth fields,” he said.

Evonik’s approach in this field appears to be basically similar to those of its peers, BASF and DSM. Both are both active in the field and both tend to invest as minority owners in both emerging companies and as partners in funds that invest in them.

BASF Venture Capital, which was established in 2001, has a stated aim of “exploring new growth potentials based on investment in start-up companies and funds”, usually shortly after they are created and as a minority owner. It invests in both start-up companies and capital funds, with a focus on “innovative technologies with a high growth potential where chemistry plays an important role, as well as new materials and substances with significant market opportunities”.

The most recent investment has been $5 million in Solidia Technologies, a US-based supplier of technologies for more sustainable production of construction materials, in early February. BASF Venture Capital put in $5 million as part of a $27 million financing round that included BP Ventures and two other venture capital firms.

Likewise, DSM Venturing invests in start-up companies with a focus on emerging technologies, developments and activities that are strategically important to the company. It describes this as “an integral part of DSM’s innovation approach”. All investments to date have been in the broad areas of life sciences and material sciences that are core to DSM. They include companies active in biopharmaceuticals, probiotics, medical devices, genetics and others.

DSM Venturing’s most recent investment, in December, was an undisclosed amount in NanoHoldings an American company that commercialises what it describes as “breakthrough nanotechnology discoveries in the field of energy”. DSM said at the time that this could provide it with additional open innovation potential in nanotechnology.