With a 3x larger second fund, an open “deep exploration” approach, and a top 20 CVC accolade, Nicolas Sauvage and his team have built a new corporate venture capital model — and we think other companies will follow.
Last year, Mach49’s Venture Investing Chairman and 2401 Board Member Paul Holland highlighted that TDK Ventures, under the leadership of Nicolas Sauvage, probably had the fastest start ever in the history of corporate venture — three exits in just 18 months after their first investment.
Today, their growth and innovation continue at a record pace.
Since our initial collaboration in 2019 to design and launch TDK Ventures, the fund has invested in 26 early stage, hard-tech startups. In “Starting a Corporate VC: An Olympic Approach,” Nicolas recounts an origin story centered around finding the best coach to build their infrastructure.
We also wanted to take a deeper look into the key elements that are driving TDK’s corporate venture success.
Mothership alignment and leverage:
There is an impressive symbiotic relationship between this CVC and their Mothership, which comes from Nicolas’s initial achievement securing buy-in from TDK president and CEO Shigenao Ishiguro and driving alignment across the senior leadership team.
The startups in TDK Ventures’s portfolio have full access to “TDK goodness” — support through every stage from early product validation to pilot program setup, customer connections, industry expertise, branding, and even market mentorship. Maximizing access to Mothership customers, brand, technology, and talent drives the mission of many corporate VCs, but Nicolas and his team have elevated this intended value beyond a mission statement and into true practice.
One example is the portfolio company Starship, a pioneering personal delivery service that uses autonomous robots to enable faster, smarter local deliveries and bring convenience and fun to fulfilling people’s needs. Behind the cute self-driving robots are complex software and hardware innovations that focus on obstacle avoidance. These innovations ensure the robot can navigate city streets smoothly without bumping into people and objects.
Early in development, the obstacle avoidance module was having technical issues with ghost reflections that were confusing the autonomous navigation. The company approached Guenter Aflenzer’s team in TDK R&D Europe, who are leaders in obstacle avoidance sensors. The TDK R&D team worked with Starship to incorporate TDK ultrasonic mini modules in the robots, redesigning the holder for the device, and evaluating and calibrating the robot in the TDK lab. The robots were validated with production sensors, a custom solution that enabled fewer street reflections and allowed for better obstacle avoidance. Mini modules in Starship have now been operational for over a year with no issues.
To date, Starship has 190 robots equipped with TDK sensors that have driven more than 55,000 km. The Starship team has ordered 20 thousand units, paving the way to scale up to a production capacity of more than one million units. This is a perfect example of a technology and commercial win-win (or as we like to call it, equal-win) for the portfolio company and TDK.
Relentless support of its entrepreneurs:
Prioritization of entrepreneurs is another common CVC goal, but TDK Ventures is going the extra distance to ensure they’re living up to that commitment. They measure their success with an annual Net Promoter Score (NPS), which is currently at an enviable 80. (An NPS over 70 means your customers love you and your company is generating a lot of positive word-of-mouth from their referrals.) A recent The Generalist article summed up this achievement: “Even among the world’s most famous companies, this is rarefied air — it is particularly striking in the less crowd-pleasing world of venture capital.”
“Deep exploration” strategy:
In its May 2021 investors’ update, TDK made the bold decision to share strategic information that had been previously classified as ‘Strictly Confidential.”
As Nicolas explored in this recent post, you may wonder why a $13 billion global industry company wants to be so open. Won’t it lose its competitive advantage? Could this impede innovation? Other organizations aren’t doing this, so why is TDK?
Nicolas notes that the answer is simple: TDK lives its values. It looks beyond profits and is reinforcing its commitment to building a better tomorrow.
TDK Ventures is now following suit with a transparent “Deep Exploration” strategy, a strategy they believe will benefit society to the greatest extent possible. TDK Ventures now shares the specific sectors and technologies they are investigating every three months. Through publishing and promoting their “deep explorations” deck, they hope to contribute more to the innovation industry, broadening their network and sharing knowledge with their partners, VCs, other CVCs, and the innovation ecosystem.
With this strategy, Nicolas plans to start a movement where VCs and CVCs will publicly share their own deep explorations, as well as the insights they’ve learned along the journey.
It’s been an impressive first three years for Nicolas and his team and we are proud to be part of their journey. We fully admit we’re biased, but there’s additional confirmation from the broader CVC community: In June of 2022, Nicolas was recognized as a top 20 corporate venture leader on Global Corporate Venturing’s Powerlist 2022.
In its first three years, TDK Ventures has helped the nearly 90-year-old Mothership explore relevant and emerging disruptions. As TDK shifts from components to solutions, the fund is driving the broad exploration into markets TDK isn’t in and technology they don’t have (yet).
TDK Chairman Shigenao Ishiguro recently commented, “When we launched TDK Ventures, I never expected so many learnings and strategic value. Nicolas, with his team, has completely surpassed my highest expectations, bringing actionable learnings in very important topics for TDK, such as cleantech, mobility, advanced materials, and distributed manufacturing. TDK is just getting started with corporate venture capital activities. With Nicolas’ guidance, we will continue to play our part in contributing to technologies that will create a sustainable and attractive future for the world.”
Nicolas and his team are off to an extraordinary start. They’re poised to set a new standard for corporate venturing — and we’re on board!
You can learn more about TDK Ventures here.