How to Select Industrial Partners, with Robert Gallenberger, Partner at the Industrial Technology Fund of btov Partners
This is the 11th episode of the podcast Deep Tech: From Lab to Market’ where Founders and Investors share how ‘deep tech’ innovation can go from lab to market. It is available on Apple Podcast and other platforms and hosted by Benjamin Joffe, Partner at SOSV, a global early stage fund focused on deep tech. SOSV runs multiple accelerator programs including HAX (intelligent hardware) and IndieBio (life sciences). To hear about new episodes, sign up to the newsletter or follow us on twitter at @LabToMarket.
Few VC funds focus on deep tech in industry, and few investors have a strong industrial background. Robert Gallenberger at btov Partners is one of those rare people. He invests across Europe where he sees an industrial renaissance based on the combination of fresh tech talent with industry veterans, and making use of the strong industrial base particularly in Germany, Switzerland and more.
For other episodes covering industrial investments, check out Kelly Chen (DCVC) on Investing in Old School Industries and John Ho (Anzu Partners) on Breakthrough Industrial Tech.
A former BMW engineer, MBA from London Business School and BCG consultant, he became a VC over a decade ago, and has mostly focused on industry startups ever since.
Founded 20 years ago as ‘brains to ventures’, btov Partners invested in deep tech companies such as Volocopter (raised €118.2M) and OrCam (raised $86.4M), and built a network of 250 Private Investors to support their portfolio.
In this episode, Robert talks about:
His transition from industry to investment,
His vision on the opportunities in the sector (including 3D printing and the reinvention of supply chains in a post-covid world).
Why industry veterans from companies like Siemens are now open to work at a startup,
How some exits in the sector gave confidence in its growth (e.g. Relayr IoT middleware platform developer exit to Munich Re for $300m).
He also shares:
His approach to investment in industry and the difference between industry 4.0 and usual software,
We’re talking about in some cases completely different timescales. We’re talking about different capital needs at different points in time.
The advantages of industry solutions including hardware,
You have completely different lock in effects with many of the industrial hardware products that we see.
Practical insights on how startups can avoid wasting time with the wrong industrial partners,
You need proof points with well-known industrial players and some of them waste your time. It boils down to your champion on the other side of the table.
Industry Partner Willingness Check List
Test the willingness to pay
Test the willingness to pay significant amounts at the right point in time
Is there talk from the top about the importance of collaboration with startups?
Is there talk from the top about the importance of innovation?
In the end, it boils down to the champion on the other side. If you can’t see that person, you should probably stop your efforts at some point.
We then wrap up with ideas on what could be done to grow the ecosystem.
BigRep: large-scale additive manufacturing (up to 1m3).
DyeMansion: global leader in 3d-printing finishing, from eyewear to personalized car interiors.
The Dawn of the Deep Tech Ecosystem by Hello Tomorrow and BCG
Deep Tech Investors Mapping by Hello Tomorrow