BASF Venture Capital GmbH Investment Strategy. Dr. Claus Hackmann Investment Manager

Transcription

1 BASF Venture Capital GmbH Investment Strategy Dr. Claus Hackmann Investment Manager 1

2 Disclaimer This presentation contains forward-looking statements under the US Private Securities Litigation Reform Act of These statements are based on current expectations, estimates and projections of BASF management and currently available information. They are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict and are based upon assumptions as to future events that may not prove to be accurate. Many factors could cause the actual results, performance or achievements of BASF to be materially different from those that may be expressed or implied by such statements. Such factors include those discussed in BASF s Form 20-F filed with the Securities and Exchange Commission. We do not assume any obligation to update the forwardlooking statements contained in this presentation. 2

3 Agenda I About BASF II About BASF Venture Capital GmbH III Investment Process IV Current Portfolio 3

5 BASF The Chemical Company Our chemicals are used in almost all industries We combine economic success, social responsibility and environmental protection Sales 2012: 72,129 million EBIT 2012: 6,742 million Employees (as of December 31, 2012): 110,782 6 Verbund sites and around 380 production sites

6 Structure of BASF s segments Chemicals Performance Products Functional Materials & Materials & Solutions Solutions Agricultural Solutions Oil & Gas Petrochemicals Monomers Dispersions & Pigments Care Chemicals Catalysts Construction Chemicals Crop Protection Oil & Gas Intermediates Nutrition & Health Coatings Paper Chemicals Performance Materials Performance Chemicals 6

7 BASF Group: R&D expenditures by segment in 2012 Research is key to the future. New technologies and products help us to find solutions for global challenges R&D expenditures circa million world leader in the chemical industry Corporate Research Chemicals Plastics 9% 8% Since 2005 up to and including 2012: ca. 50% increase in R&D expenditures Sales Target 2020: circa 30 billion from product innovations Performance Products Functional Solutions Agricultural Solutions 20% 14% ca million 25% 22% 2% Oil & Gas 7

8 Technology Fields Growth Fields* Customer industries Sustainable Innovations In Growth and Technology Fields Resources, environment & climate Food & nutrition Quality of life Chemistry as enabler Transportation Construction Consumer Goods Health & Nutrition Electronics Agriculture Energy & Resources Batteries for Mobility Heat Management Enzymes Medical Organic Electronics Plant Biotechnology Energy Management Leightweight Composites Functional Crop Care Rare earth metals recycling Heat Management Wind Energy Water Solutions Raw Material Change Materials Systems & Nanotechnology White Biotechnology * including growth fields still under evaluation 8

10 Field of Operation BASF s Innovation Matrix Technology New to BASF Exploratory Research Future Business Established at BASF Technology Platforms Marketing New Business Development BASF active BASF NOT-active Market 10

11 BASF Venture Capital GmbH (BVC) Facts, Figures & Targets Facts & Figures founded in April, employees, offices in Ludwigshafen (Germany; HQ), Boston (MA, USA), Fremont (CA, USA), Hongkong (China) and Tokyo (Japan) fund size of 175 million takes minority stakes in start-up companies ( 1-5 million per company) 27 direct and 6 fund investments since company s inception BVC pursues both strategic and financial targets: expansion of BASF s technology portfolio (open a window on technology ) generate risk-adequate returns 11

12 BASF Venture Capital Team Europe based in Ludwigshafen Dr. Claus Hackmann Investment Manager Chemist Dirk Nachtigal Managing Director Economist Katharina Mandl Investment Manager Economist Dr. Michael Nettersheim Investment Manager Biochemist, MBA Michaela Kemper Assistant Nils Christoph Koehler Investment Manager Economist Dr. Richard Riggs Investment Manager Chemist Ludwigshafen, Germany 12

13 BASF Venture Capital Team USA based in Fremont and Boston Dr. Björn Heinz Investment Manager Chemist Dr. Sven Harmsen Investment Manager Chemist Fremont, California Dr. Pulakesh Mukherjee Investment Manager Chemist Boston, Massachusetts 13

14 BASF Venture Capital Team Asia based in Hongkong and Tokyo Hiroki Saitho Investment Manager Chemist Tokyo, Japan Johnnie Yuen Investment Manager Chemical Engineer, MBA Hongkong, China 14

15 BASF Venture Capital GmbH Strategy to achieve Window on Technology Levels of collaborations in 2012 Technology charters of BASF-Units Interactions with stakeholders in BASF 900 Deals reviewed (YTD ) Endorsements of Deals Involvement of stakeholders in BASF: 31 Number of Facilitated Cooperations with BASF: 57 Expose employees of BASF to external Network VC investments by Industry 2012 Other Companies Adv. Mat. & Chem Energy Products & Services Other Healthcare 2,3% Medical Devices/ Equipment Medical Devices/ Equipment IT 11,5% 8,9% 0,9% 2,4% 6,6% 16,6% 50,8% 15

16 BASF Venture Capital GmbH Two Key Objectives Three Areas of Strategic Support Identify disruptive technologies for established business units & technology platforms of BASF Group Complement projects of BASF New Business Leverage external skills in the area of Growth Fields Financial Return Window on Technology Financial Performance Indicators Assess opportunities to achieve risk-adequate return on a single investment A solid financial return of the entire portfolio requires diversification on technologies and markets 16

17 BASF Venture Capital Strategic Objectives To develop strategic insights emerging technologies key market trends novel business models To get access to emerging technologies contacts to innovative service providers, suppliers or customers joint technology development joint commercialization To build strategic business options joint project development joint market entry extend geographic reach option to acquire portfolio company 17

18 BASF Venture Capital What we do acquire minority stakes of 5-25% in start-up companies invest into companies with background in chemistry, material science or biotech form syndicates with other funds as both co-investor or lead-investor participate in series A onwards build commercial and/or R&D cooperations with portfolio companies use both trade sales and IPOs as exit routes 18

19 BASF Venture Capital What we don t do Acquire investments from other venture capital companies ( secondaries ) finance suppliers, customers or projects invest in public companies conduct buy-outs invest in pharmaceutical businesses, software/it, telecommunication or service businesses 19

20 SWOT S Strength W Weakness O Opportunities T Threats 20

21 Start-up and Collaboration BVC mediating two different worlds The Start-up World The Start-up World BVC Strengths Fast-paced Good at disruptive innovations Looking for Hockey-Sticks Weaknesses Low Liquidity Limited industry knowledge High company death rate Strengths knowledgeable about its core areas Good at incremental innovations Long-term thinking Weaknesses Slow-paced Not optimized for disruptive innovations 21

23 The Concept of BASF s Window on Technology Investments in start-up companies Access to new markets, technologies & business models Window on Technology Deeper insight and understanding of technological aspects Initiate commercial and/or R&D cooperations with start-up companies 23

24 Significance of Various Sources of Dealflow Size = Quantity Strategic Fit VC Network & BASF Colleagues Fund Investments & Databases Direct Contact & Conferences Quality of Dealflow 24

25 Investment Process: Strategic & Financial Objectives in Balance Investment Process First Contact Screening Due Diligence Investment Management Exit 900 deals p.a. ~15 % ~5 % ~0,5 % Deal sourcing VC Network BASF Fund investments Conferences VC Databases Technology Charter Brief evaluation: Technology Business model Market Financials Key Contact Endorsement & Term Sheet In-depth evaluation: Technology & IP Business model Management Market Syndicate Exit Market & Tech Experts Due Diligence Findings positive? Negotiation of legal documentation is fundamental to BASF s future rights and obligations BASF interaction Managing portfolio company and representing BASF s interests Building a relationship with BASF Board Seat Sale of shares in order to generate a return for BASF: IPO or Trade Sale (M&A) Return 25

26 An Endorsement Triggers the Investment Process Endorsement Formal endorsements from BASF operations make sure that the start-up company s business is relevant to BASF s innovation strategy specify which window on technology will be opened and how make sure that the resources required for a due diligence are provided by the business unit involved Once a deal has been endorsed BVC initiates the investment process by building the due diligence team submitting a termsheet to the start-up company and 26

27 An Investment Decision is also driven by Financial Performance Positive DD BASF Venture Capital seeks to achieve a return that corresponds to the company s risk profile As a shareholder and board member BVC drives the company s development in order to generate these returns and diversifies its portfolio by investing into various industries and technologie all across BASF s operating businesses 27

28 Cooperations between BASF and Startups are beneficial for both Parties Powerful impetus for the start-up company Window on technology & Risk adequate financial returns A start-up company can benefit from BASF by leveraging BASF s global network and expertise in many areas developing its products faster and launching them earlier gaining better access to the target market By investing venture capital and cooperating with young companies BASF can remain technologically up- to-date gain access to new business areas/markets shape innovative interdisciplinary technologies 28

30 Active direct investments Private companies June 2002 May 2003 December 2004 August 2005 November 2005 June 2006 Nano- Technology Plant Biotechnology Formulation Technology Biocides Printed Electronics Nanotechnology Oxford, UK Davis, CA, USA Columbia, MD, USA Wakefield, MA, USA Cambridge, UK Tempe, AZ, USA September 2006 February 2007 June 2007 Marcht 2008 May 2008 September 2008 White Biotechnology Laser Marking Systems Organic Photovoltaic DNA labeling Precious Metals Nanotechnology Golden, CO, USA Widnes, UK Dresden, Germany Tutzing, Germany Heidelberg, Germany Endicott, NY, USA September 2010 September 2011 December 2011 February 2012 March 2012 April 2012 Insulation Materials Northborough, MA, USA Wind Energy Waltham, MA, USA Green Building Materials Piscataway, NJ, USA White Biotechnology San Diego, USA Flame Retarding Additives Chelmsford, USA Water Desalination Los Angeles, USA 30

31 Fund Investments April 2001 February 2002 August 2006 December 2007 Materials Fund Energy Fund Materials Fund Materials Fund St. Barbara, USA Vancouver, Canada Vancouver, Canada Chicago, USA December 2007 January 2012 Fund Strategy Fintech GIMV Technology Fund Tokyo, Japan China Environment Fund IV, L.P. Cleantech Fund Beijing, China Areas w/o in-house expertise Geographical areas w/o VC exposure Seed Funds 31

32 Dr. Claus Hackmann Investment Manager BASF Venture Capital GmbH 4. Gartenweg Building Z Ludwigshafen Germany Tel [email protected] 32

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34 Developing High-Tech Start-Ups Requires Venture Capital & Partners money Positive Cash Flows Strategic Partnerships IPO* Acquisition / Trade Sale 0 Venture Capital Cash Burn / Investment Phase Build Bankruptcy Buy time *Initial Public Offering on a Stock Exchange 34

35 Experienced BVC Team Europe Managing Director Dirk Nachtigal Technical Investment Manager Claus Hackmann, PhD. Richard Riggs, PhD. Michael Nettersheim, PhD. Financial Investment Manager Nils-Christoph Köhler Katharina Mandl Background BASF Finance Executive & VC Research, Development & Production Research VC-Seed financing Controlling VC US Technical Investment Manager Pulakesh Mukherjee, PhD. Björn Heinz, PhD. Sven Harmsen PhD. Marketing & Sales Research New Business Development Asia Technical Investment Manager Johnnie Yuen Hiroki Saitoh Marketing- & Sales New Business Development 35

36 Investment Portfolio 2012 USA USA Fremont Boston Offices Fund Investment 36

37 BVC Investment Portfolio US Boston USA Offices Fund Investment Fremont Company ABN Corp. Arcadia Inc. Aspen Aerogels Inc. Clean Diesel Technologies Inc. FloDesign Corp. FRX NanoH20 Sciessent SDCmaterials Inc. Solidia Technologies Inc. Technology Formulation technology for food and pharma Seed traits for nitrogen usage, salt, drought Insulation material for industrial plants & buildings Catalyst systems Wind turbines Flame retarding additives Reverse osmosis membranes Antimicrobial solutions Nanomaterial discovery and manufacturing Green building materials. 37

38 BVC Investment Portfolio Europe & Asia Europa Offices Fund Investment Ludwigshafen Honkong Tokio Company baseclick GmbH DataLase Ltd. Dt. Rohstoff AG Heliatek GmbH Plastic Logic Ltd. Technology DNA labeling technology Pigments for laser coding Oil, Gas and Rare Earth Elements Organic Photovoltaics Printable electronics 38