GEs Corporate Venture efforts

by Marie MOREL, Apolline MORELLE, Alexandre MOUEN MAKOUA, Marc PUISSOCHET

17/11/2014

TABLE OF CONTENTS
1

GE VENTURES .......................................................................................................................... 1
1.1
1.2
1.3
1.4
1.5
1.6
1.6.1
1.6.2

1.7

Overview.................................................................................................................................. 1
History of the fund .................................................................................................................. 1
People ...................................................................................................................................... 2
A win-win game ....................................................................................................................... 2
GE Ventures by the numbers .................................................................................................. 3
Featured investments.............................................................................................................. 3
Stem .............................................................................................................................................. 3
Nanosonics .................................................................................................................................... 3

The selection process .............................................................................................................. 4

JOINT CORPORATE VENTURE CAPITAL ............................................................................................ 4

OPEN-INNOVATION POLICY .......................................................................................................... 5

3.1
3.2

Competitions and challenges .................................................................................................. 5

OurCrowd ................................................................................................................................ 5

SOURCES ................................................................................................................................. 6

Founded in 1892 by Thomas Edison and Charles Coffin in New York as a manufacturer of dynamos and
electric lights, General Electric grew to become a worldwide conglomerate which operates in various
fields such as energy, transportation, infrastructure, finance and oil and gas. Today, GE employs more
than 300,000 people in over 140 countries.

In 2001, Jeffrey Immelt was appointed CEO of GE and he decided to reconnect with the companys
roots: innovation in all spheres. Thus, he changed the corporate signature to GE imagination at
work and started a huge advertising campaign.
Innovation is a critical point for GE. The company is involved in open-innovation programs through
which it agrees to collaborate with several companies providing them the right to use some GE tools
and processes.

GE is doing all of it: Were big in [mergers and acquisition].

Ries came over to do startups. We have licensing groups [to
license out GE inventions]. And then theres the venture
group. Incubations are a great example of how we can be
helpful.
Karen Kerr, GE Ventures Adv. Manufacturing

1 GE VENTURES
1.1 Overview
GE Ventures is a venture capital fund which invests in four main types of businesses in which GE has
capital, technical and commercial expertise. Those businesses are:

software & analytics: data & analytics, XaaS, machine to machine automation, cloud and
security

healthcare: precision medicine, big data & clinical decision support, life sciences, minimally
invasive guidance, patient monitoring & safety

energy: distributed generation, including renewables, smart grid applications, next generation
transportation and infrastructure, oil & gas, thermal technologies

advanced manufacturing: material science, digital fabrication, 3-d printing, additive

manufacturing

1.2 History of the fund

According to Colleen Calhoun, Senior Executive Director, Energy Ventures, GE has been in venture
capital for more than 20 years through its GE Capital business. GE Capital provides loans and leasing
solutions to its customers (usually small or medium enterprises) as well as deep industrial knowledge
that regular banks cannot offer. However, GE Capital does not aim specifically at venture businesses.
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In 2005, Jeff Immelt committed to invest more resources in R&D, launch new solutions that save
money and minimize GEs environmental footprint. The commitment was called ecomagination and
led to technology advances and new partnerships which benefited GE.
Following this successful enterprise, he launched healthymagination in 2009 to improve quality,
access and affordability of healthcare globally.
In 2012, the company created Access GE, a network of 600 experts within GE who provide nonfinancial advice to clients of GE Capital.
Its finally in January 2013 that GE restructured its health, energy, software and manufacturing venture
investment groups into its GE Ventures unit with a $150M annual fund commitment.

1.3 People

Dennis Cinelli

Sue Siegel

David Mayhew

Chief Financial
Officer

Chief Executive
Officer

Chief Risk Officer

Brett May

Colleen Calhoun

Rafael Torres

Karen Kerr

Head of Software &

Analytics

Head of Energy

Head of Healthcare

Head of Advanced
Manufacturing

1.4 A win-win game

GE Ventures works by investing, incubating, licensing out its own innovations and helping partner
companies to build successful businesses. The selected companies are allowed to use GE intellectual
property according to GE Open Innovation Manifesto. That gives them access to more than 50 years
of innovations, techniques and patents from GE.
One of the obvious goals for GE in this process is to get good returns on their investment. But GE
Ventures also is an antenna for the corporation in the external world, which allows it to spot promising
ideas and to flag potential disruptions that will help drive better outcomes for their customers and
society.

Our venture opportunity is about bringing both technology

and the startup culture into the organization.
Karen Kerr, GE Ventures Adv. Manufacturing

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1.5 GE Ventures by the numbers

Only in 2013, GE participated in 17 deals, representing $ 535M in funding.
GE Investment Deal and Funding Trend

Sector Breakdown of GE Investments

23

Energy & Utilities

17

15

8%

4%
4%3%

Healthcare

31%
Software (non-internet)

8%

10
$ 695M
$ 535M

$ 483M
$ 243M

Industrial

14%

Internet

28%
2010

2011

2012

Investments ($M)

2013 YTD

Computer Hardware &

Services
Electronics

Deals
Other
www.cbinsights.com

If we have a look at GEs investments since 2010 by sector, we can notice that 60% of its deals have
gone to either healthcare or energy/utilities companies, while only 14% of GEs investments were in
the software space.

1.6 Featured investments

1.6.1 Stem
Stem provides software-based solutions to reduce the energy consumption of companies and cities.
This company created in 2009 is now among the leaders in advanced energy technology. In October
2014, Stem entered the 2014 Global CleanTech 100 which honors the most innovative and promising
ideas in Clean Technologies. The partnership between Stem and GE Ventures seems to be a success!

1.6.2 Nanosonics
Nanosonics develops innovative technology for infection control, with a focus on Hospital Acquired
Infections. GE Capital invested in Nanosonics in 2012 through its healthymagination Fund which has
since then been taken over by GE Venture.

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1.7 The selection process

In the various interviews they gave, the managing directors of GE Ventures systematically emphasize
two critical dimensions:
i.

The pain-point: the Corporate Venture Fund gets feedback from GEs units of which
problems are considered as bleeding-from-the-neck problems and that they hope to get
through in the next three to five years they also are paint-points in the society, but the
focus is pain-points for GEs business units;
The management team: GE Ventures prioritizes companies that have a management team
with great reputation and that can execute.

ii.

As for the pain-point, key areas for GE Ventures are global access to healthcare, distributing power, oil
& gas, big data, robotics and the automation of the house, additive manufacturing.

Were looking for technologies and service solutions that are

focused in the disruption of our key areas and are attracted
to management teams with a great reputation.
Colleen Calhoun, GE Ventures Energy

In an interview to CleanTech, Colleen Calhoun gave three pieces of advice to technology companies
who approach GE for a partnership:

be specific: GE is a large company with lots of resources, the startup has to be specific about
how they want to partner with GE, what their expectations are and where they see success;

be pushy: GE is attracted to startups because they have the ability to innovate quickly and to
capitalize on things in a different way than GE can, it is crucial that the startup be able to stay
focused and does not let a big company like GE derail them;

be bold: you dont get if you dont ask, the company must not hesitate to ask for what they
need to make the partnership a success.

2 JOINT CORPORATE VENTURE CAPITAL

Founded in January 2011, Energy Technology Ventures is a joint
venture involving General Electric, NRG Energy, and ConocoPhillips.
The fund is focused on the development of next-generation energy
technologies and invests in venture- and growth-stage companies.
The main areas the JV invests in are renewable power generation, energy efficiency, emission controls,
smart grid, oil, natural gas, coal and nuclear energy, water and biofuels sectors. With their deep and
complementary technical and financial expertise, relationships, services and products, the three
market leaders GE, NRG Energy and ConocoPhillips intend to help start-ups develop next-generation
energy technology.

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3 OPEN-INNOVATION POLICY
Today, GE is one of the most involved companies in open innovation. It understood very
early that very advanced manufacturing techniques and highly complicated processes
required collaboration. By crowdsourcing innovationboth internally and externallyGE is
now driving advancements across industries.

3.1 Competitions and challenges

Recently, GE had an innovative way to come up with innovations related to the emerging
smart electric grid: the company asked for ideas. Last July, GE launched what it called an
ecomagination challenge, a competition in which startups and inventors were asked to
present technologies that could help GE accelerate its development of products and services
related to the smart grid. GE got 4,000 submissions. It gave $100,000 cash awards to five
young companies and formed strategic partnerships with 12 others; all of them are
expected to help GEs business in one way or another in such areas as energy storage, utility
security, energy management software, and electric-vehicle charging services.
In another field, GE and its partners announced winning Open Collaboration innovations
of industrial internet flight quest 2 and 3D printing production quest. Flight Quest 2 is aimed
to help GE develop first-of-a-kind solution allowing airlines to determine the most efficient
flight route in real time; could save the industry $3 billion each year. 3D Printing Production
Quest identifies three fabricators with capabilities to produce complex medical imaging
device parts with high precision; it will drive greater product performance, quality and cost
savings for healthcare customers.

3.2 OurCrowd
In November 2013, GE Ventures
entered a co-investment partnership with Israeli crowdfunding platform OurCrowd that will
enable GE Ventures to co-invest with OurCrowd in select early stage companies. This
demonstrates GEs confidence in crowdfunding as a valuable method to discover
companies.
OurCrowd is an equity crowdfunding platform exclusively for accredited investors, who need
to invest at least $10,000 per deal.

OurCrowd has created a unique platform for dynamic early

stage origination and funding, the partnership will give GE
increased access to early innovation.
Sue Siegel, GE Ventures CEO

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4 SOURCES
-

http://www.geventures.com/
http://www.ge.com/sites/default/files/GE%20Ventures%20EXTERNAL%20Fact%20Sheet%20FIN
AL_0.pdf

http://www.mediapost.com/publications/article/8197/ge-imagination-at-work.html

http://www.stem.com/archives/11445
http://www.nanosonics.com.au/
http://www.ninesigma.com/
http://www.technologyreview.com/
https://www.cbinsights.com/blog/ge-siemens-venture-capital/
http://www.crunchbase.com/organization/ge-ventures/people
http://www.crunchbase.com/organization/energy-technology-ventures
http://allthingsd.com/20130520/ge-ventures-officially-opens-for-business-in-silicon-valley-video/
http://blogs.wsj.com/venturecapital/2014/05/05/ge-ventures-sue-siegel-accelerators-reduce-riskfor-early-stage-investors/
http://www.chicagotribune.com/bluesky/series/big-company/chi-ge-ventures-karen-kerr-bsi20140930-story.html
http://blog.cleantech.com/companies/company-spotlight/10x13-ep-8-colleen-calhoun-sr-exec-dirfor-energy-ventures-at-ge-on-themespartnerships/
http://allthingsd.com/20130520/ge-ventures-officially-opens-for-business-in-silicon-valley-video/
http://venturebeat.com/2013/11/04/ge-enters-the-crowdfunding-arena-with-ourcrowd-partnership/
http://www.forbes.com/sites/markfidelman/2013/11/12/heres-what-general-electrics-ge-big-bet-oncrowdfunding-looks-like/
http://www.ge.com/about-us/openinnovation
http://volans.com/project/investing-in-breakthrough-corporate-venture-capital/

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