Corporate venture building is a powerful way to drive profits and growth — but it also offers organizations an unmatched opportunity to create meaningful global impact.
Mach49 Board-Member-in-Residence Rob Majteles recently joined Gregoire Viasnoff, VP of Business Incubation for Schneider Electric, and Ryan Letourneau, CEO and Co-Founder of Grain Ecosystems, to explore how to bring to market valuable, high-ambition solutions that accelerate sustainability.
For Fortune Global 500 company Schneider Electric, climate and sustainability-focused innovation is a core value. The corporation has been listed as a Global 100 most sustainable company for 12 years in a row, and in 2021 was named the most sustainable company in the world. It has also received widespread recognition for its transparency around emissions and its concrete plan to achieve net zero across its value chain.
But for Schneider Electric, those commitments are not just good marketing: they’re vital business drivers.
A 2022 IFC report shows a $23 trillion market opportunity for climate-focused investment in emerging markets before 2030. Companies that act now stand to make massive profits — while those that fall behind on sustainability face increasing regulatory risk and consumer backlash.
Schneider Electric’s day-to-day work is primarily focused on energy use management and reduction — but the company’s ambitions are far more expansive.
As Viasnoff explained, however, game-changing innovation can’t come from a business-as-usual approach.
“Even if you have bold ambition, when it comes to execution, you need dedicated resources focused on driving innovation,” he explained. “Usually, the mothership’s business units are focused on their R&D roadmaps or maybe on M&A acquisitions that can offer differentiators, but are usually quite expensive. You cannot rely on organic growth or acquisitions if you want to operate in markets that are changing almost every day.”
Recognizing this reality, Schneider Electric partnered with Mach49 in 2018 to launch a venture incubation program and a CVC arm, SE Ventures, which now has over $1 billion in assets under management. In contrast to the high failure rates of most corporate incubators, SE Ventures has a near 100% success rate, with past incubations including eIQ Mobility, an EV fleet as a service offering; Clipsal Solar, a top Australian residential solar energy provider; and Dash Energy, an intelligent energy monitoring solution.
For Gregoire, longer-term plays through venture investing aren’t enough — they need to work in tandem with internal venture building.
“We all know that the best way to predict the future is to shape it yourself,” he said. “The incubation practice is about filling in the gaps between what is available now and what is needed to achieve your future vision.”
That’s where the mothership advantage — corporations’ unique access to resources, customers, and talent — comes in.
“We don’t want to replicate something that already exists or that a startup will do in the next month,” Viasnoff explained. “The capability to tap into data, expertise, and market knowledge, is something only a corporate can do. With bold entrepreneurs, we can explode this goldmine into opportunities and create independent ventures which we back through our VC, because we’ve found that it’s important to operate within an open ecosystem.”
As Rob noted, corporate incubators are most likely to succeed when they find opportunities adjacent to the company’s core business yet are innovative enough that they aren’t duplicating the work of corporate R&D.
“If you really want to give an unfair advantage to your incubation,” Viasnoff added, “You need to have subject matter experts who are able to scale it faster, but you also need to be fulfilling market needs that are untapped.”
One of Schneider Electric’s most successful incubations, Grain Ecosystem, arose this year from the company’s venture competition.
The initiative, called Dare to Disrupt, drew unprecedented engagement from Schneider Electric’s global workforce, with over 2,500 participants attending an initial workshop. The competition, moderated by Mach49, received 242 proposals from teams spanning 44 countries, and 24 shortlisted teams received 180 hours of mentoring from 27 experts.
The ultimate winner, Grain Ecosystem, offers a disruptive, science-backed solution to the complex and frequently fraudulent carbon offset market. As Ryan explained, following Mach49’s unique incubation process after winning the competition set the fledgling startup up for success.
“The real magic happened for us in the incubation,” said Ryan. “It was 12 weeks where we really had to be customer focused, and it was also an opportunity to build our culture. We went from being in different departments within a large multinational, sometimes grabbing a coffee together and sometimes being on different continents, to being together for 12 weeks working specifically on this problem, talking to customers directly, building the different solution sets to the problems that we had identified, testing them, and coming up with a business case.”
Today, Grain Ecosystem has spun out with funding from SE Ventures and has its own employees and board of directors. In March 2023, the Grain team had a successful platform launch at North American Carbon World.
A successful spinout, however, was never the Dare to Disrupt competition’s sole goal.
“From day one when we framed this contest, I engaged with two executives,” said Gregoire.
“One was our Chief Innovation Officer, and the second was our Chief Human Resources Officer. This was really about demonstrating to thousands of employees that there are different ways to think about and drive innovation and opening their eyes to different methodologies and ways to engage with customers.”
Gregoire’s hope — shared by Schneider Electric’s leadership — is that engaging employees across the organization with innovation projects will surface previously unknown talent that can be nurtured and developed to move the company forward. And armed with a new understanding of the venture-building process, some of those employees may create the next Grain Ecosystem.
If you missed “Building the Next Billion-Dollar Business Within,” watch the full webinar here.
Get in touch with the Mach49 team to build an innovation culture that supports a pipeline and portfolio of sustainability ventures.