PRINT THIS PAGE

Das Venture Kapital

European corporate venture capitalists are taking an increasingly active interest in Asia. Some are even planning on opening offices in the region in the near future, according to the Asia Private Equity Review.

In the late 1990s more than three quarters of the Fortune 100 companies were setting up corporate venturing arms, according to a report jointly produced by Ashridge Strategic Management Centre and London Business School. With Asia being the centre of global economic growth, it is perhaps not surprising that the corporate venture capital units of multinationals are becoming increasingly active on the Asian private equity scene. European investors, traditionally more reserved than those from the USA, are nevertheless taking up an active role on the Asian stage.

In early August, Nokia Venture Partners, a subsidiary of the Finland-based mobile phone giant, added its fourth unit in Asia when it set up an office in New Delhi, India. The move followed a recent US$10 million commitment to a domestic start-up company that develops a new class of enterprise security solutions. Nokia Venture Partners already maintains offices in Hong Kong, Seoul and Tokyo. The firm’s recent commitment in Asia represents one of the most rapid developments in Asian private equity.

Earlier in the year, German chemical powerhouse BASF entered the Asian venture scene with the establishment of a venturing arm in Hong Kong. Differing from many of the corporate venturers, BASF Venture Capital GmbH does not invest in some of the most popular technologies used by Asia’s growing consumer markets, says Dr Knut Eichler, head of East Asia operations of BASF Venture Capital. Rather than focus on information technology, semiconductors, telecommunications and pharmaceuticals, the firm instead concentrates on new material science, applications of nanotechnology fuel cells and electro-chemicals, among others. Dr Knut believes BASF Venture Capital will benefit potential portfolio companies by sharing its 'competence in chemical related areas' in addition to capital deployments ranging from $1m to $5m. After a brief four months in operation, Dr Knut has already travelled to more than 11 countries in Asia to search for opportunities, and he believes has already identified a 'gem' investment.

Another corporate that is contemplating an Asia office for its venture capital arm is Siemens. Mr Bjoern Eske Christensen, Chief Executive Officer of Siemens Venture Capital GmH, indicated that both Beijing and Shanghai are being considered as their Asian base. 'Taking advantage of Siemens’ 150 years of history in China', says Mr Christensen, an office in the world’s most populated nation would represent “an expansion of its (Siemens’) global value chain”.

Perhaps one of the largest corporate venturing operations in Europe, Siemens Venture Capital has five funds, with an estimated $500m under management. Its corporate venturing arm is a platform to develop its global network of innovation. 'We target ‘diversified technologies’ including alternative energy, medical solutions and information technologies', says Mr Christensen.

Within Siemens’ corporate venturing arm is also a fund of funds division that is set up to 'complement deal flow', says Ms Doris Blasel, head of Seimens Venture Capital’s Fund in Fund. In line with the firm’s corporate strategy to develop the China market, Ms Blasel indicates that she is looking at China funds for both 'strategic and financial results', adding that their approach to China investments would necessarily be cautious.

Schott Glas, a German glass manufacturing heavyweight, is also seeking opportunities in Asia. Headquartered in Mainz, Germany, the Schott Group has manufacturing plants in all major markets. With E125m ($150m) earmarked for research and development, the company supports the fields of electronics, optics and opto-electronics, as well as automotive engineering, household appliances and display. Its corporate venturing and new business arm has a modest $10m to support start-ups in early stages in order to generate new business opportunities for the company. 'We will go after proven concept and early stage investments', says Mr Matthias Rindt, Investment Manager with Schott’s venturing and new business unit. Schott Glas’ new business team believes it has experience in taking ideas to implementation and can give start-ups the support they need. Mr Rindt stresses that the goal of bringing new technologies that 'tie in to the core business' of the company is only part of the firms’ mandate, noting that optimal returns are also an important part of the equation.

Schott Glas’ corporate venture activities have primarily been in the USA, and Europe, to a lesser extent. However, Asia is increasingly appearing on its corporate radar, with China being the centre of its attention. Mr Rindt indicates that in Asia he hopes to seek opportunities in nascent companies that are developing products in the fields of advanced optical, opto-electronics and solar.

According to Ashridge Strategic Management Centre and London Business School, less than five per cent of corporate venturing units created by the parent company were profitable. Whether BASF, Siemens and Schott Glas will ultimately fulfill their goals in Asia remains to be seen. But their presence will undoubtedly help to advance technology in the region and is a welcomed development to the Asian venture capital scene which is in dire need of technology mentors.

Asia Private Equity Review (APER) is the foremost voice on matters related to private equity/venture capital in the region. Well-recognised as being the singular source for accurate and timely news, in-depth analysis and global perspectives, APER is published by the Hong Kong-based Centre for Asia Private Equity Research. For further information please visit our website at www.asiape.comor email us at info@asiape.com