Cummins plans to tap into “Startup India” movement

Cummins, the US-based engine and power generation company, has been in India since 1962. But now the company a much bigger presence in the country and Ankit Harjai, who heads up the corporate venture capital operations for the Indian market, believes startup investment will be key to doing this.

“We are looking for new partners for products that can be exported under the “Make in India” scheme,” he told Global Corporate Venturing. “Working with startups is part of this effort, especially as there are a number of startup promotion schemes in India like Nidhi Prayas and Mudras Loans which support new businesses under the “Startup India” aegis.”

Cummins, which designs, manufactures and distributes engines, filtration, and power generation products, is already the India’s leading manufacturer of diesel and natural gas engines for everything from marine and railway use to defence, and mining.

But this is what Harjai says the company would like to do next.

What is Cummins’ CVC strategy?

Cummins set up its CVC unit in 2012 and now has a team of 7 members with a rolling pool of capital of around $250m from its corporate balance sheet and cash reserves.

Our current approach combines strategic alignment and flexible investment structures. We invest primarily in technologies and startups relevant to its core business areas, such as diesel and natural gas engines, electrification, alternative fuels, emissions control, and power generation.

Cummins collaborates closely with its portfolio companies, offering them strategic guidance, industry expertise, access to its extensive network, and potential partnership opportunities.

We take a long-term view with its investments, focusing on building sustainable relationships with portfolio companies rather than seeking quick returns.

Sometimes we explore alternative investment structures, such as strategic partnerships, joint ventures, licensing agreements, or technology collaborations.

How did you come to your current role at Cummins?

I previously led corporate development and M&A at TechMahindra, focusing on engineering services, manufacturing, and TMT verticals.

I started this role at Cummins in 2022 with an interest in expanding Cummins’ strategy for achieving a zero-emissions future. The aim is to reduce the greenhouse gas and air quality impacts of its products and reach zero emissions by 2050. I lead the investments and partnerships portfolio for India markets, which includes working with active partners like Sanchi Connect, Shell E4, Plugin Alliance.

How do you balance financial and strategic outcomes in your investment strategy?

There is often a delicate balance here. While financial returns are important, strategic relevance plays a crucial role. Our investments complement the existing product line and business model and have enhanced the company’s competitive advantage, especially in the green hydrogen economy.

We have partnered with Shell E4, the incubation arm of Shell in India, to establish our dedicated corporate venturing programs. The partnership with Shell E4 extends across our whole corporate venturing program for India markets and aims to find new technologies, co-invest and also build go-to-market strategies for product sales in India and other markets.

What sectors do you invest in?

We primarily focus on the automotive and energy sectors, including power generation, electrification technologies, digital solutions, energy storage solutions and alternative fuels. Our investments in these areas include Voltstorage, Sion Power, Hydrogenics.

We are looking for new technologies that are aligned with our decarbonisation strategy. This can include a mix of hardware and software that could help our core portfolio reduce carbon emissions.

In the area of power generation we are looking at engines, generators, and related technologies. In transportation solutions we are looking for engines for commercial vehicles, buses, and rail applications; in electrification technologies we are interested in electric and hybrid powertrains for both stationary and mobile applications. We are also looking for digital solutions, data analytics, and IoT technologies to enhance product performance. In energy storage we are looking at batteries and fuel cells to support electrification and renewable energy integration and we are interested in alternative fuels such as natural gas, hydrogen, and biofuels to address sustainability and emissions reduction goals.

At what stage do you invest?

We invest across various stages of a startup’s growth, including seed (for eg. Platform Science), early-stage (for eg. ReliOn, Sion Power), and later-stage rounds (for eg. Hydrogenics).

What geographies do you invest in?

We look at investments in North America, Europe and India. At present, the majority of the portfolio firms are based in North America. But more growth opportunities in Europe and India are under consideration.

What do you look for in an investment?

While evaluating investment opportunities in India and other global markets, I prioritise the growth potential and demand for products and services in target markets. The other factors I closely monitor are technological competitiveness, revenue potential (in some cases profitability), sustainability goals, business model, and opportunities for partnerships, collaborations, or joint ventures to leverage complementary strengths and capabilities.

I look particularly at the product-market fit for early stage ventures and for later-stage ventures would focus on whether their go-to-market strategies align with Cummins’ business.

What are your goals for the Cummins venture capital operations?

We would like to significantly expand our investment portfolio in India through both direct investments and partnerships. Our India partnerships include working with Repos Energy, GasTech Systems, Boston Labs (Powerbot), PI Green Innovations, and mSense. These collaborations offer access to new technologies, markets, and expertise. As a CVC unit, we lay special emphasis on strategic partnerships in addition to investments.

As a CVC unit, we shall continue investing in companies focused on sustainability, clean energy, and advanced technologies that complement Cummins’ core business areas, such as automotive, power generation, and electrification.

We are also expanding our presence in India by partnering with the academia and incubation ecosystems with the leading Indian Institutes of Technology such as IIT Madras and IIT Bombay. We have also signed up Indian Business School Hyderabad-supported Plugin Alliance which focuses on the internet of things and digital applications for manufacturing organisations like us. The Shell E4 partnership will also support us in our incubation efforts and building a coherent ecosystem where we shall work with startups from the seed stage to late stage.