Materials company Teknor Apex invests in startups to retain its cutting edge

When faced with rubber shortages during the second World War, Teknor Apex, originally a family-owned tire and rubber company, was inspired to develop a range of new materials, setting it on a path to become a global leader in plastics material science solutions. Today, the advanced polymers the company produces are found in applications across the economy, from cars to consumer products and medical-grade devices.  

More than a hundred years since its founding, that same spirit of innovation is live at the privately held Rhode Island-based company. Today’s challenges are different, as AI tools and a focus on circularity bringing about the next leap in materials development, but Teknor Apex is equally determined to remain at the cutting edge.

To help it do so, it recently launched TekVentures, a corporate investment arm which, under the leadership of Abhijit Ganguly, is looking to bridge the gap between traditional materials discovery and cutting-edge innovation.

The TekVentures model has been set up thoughtfully: a single-LP entity tethered directly to the operating company, incentive structures built to reward startup outcomes over assets under management, and a dedicated platform and partnership function designed to move technology effectively from pilot to production.

The design is optimised to make the most of the tangible features of corporate venture investing.

“It gives us this unique advantage of value-added capital, leveraging some of the deep-rooted assets, competencies, and brand awareness of an established company that are very hard to come by for a financial investor,” says Ganguly. “It helps us differentiate with respect to what we bring to startups.”

The strategic necessity for renewal

The creation of TekVentures is about making sure that the parent company remains on the cutting edge of materials science and manufacturing, not just through its own R&D efforts but by interacting with the wider innovation ecosystem.

“The world of materials in the next 100 years, will be different from the last 100 in the way we think about human and planetary health,” Ganguly says.

Like many materials companies, Teknor Apex, faces new operational and strategic challenges as it enters its second century. Most pressing is the global transition to sustainable plastics, where the company must navigate the technical limitations of recycled and bio-based polymers while meeting aggressive regulatory requirements, such as California’s restrictions on non-degradable plastics.

“There are rising concerns around microplastics, concerns around recyclability of materials and rational geopolitical concerns around petroleum-derived materials, so these are all themes that make the thesis of the fund very, very interesting,” Ganguly says.

Beyond sustainability, the company is also working to modernise legacy manufacturing systems, supporting current operations with automated processes and digital, data-driven frameworks to remain competitive against low-cost overseas rivals. This dual opportunity—to innovate the material itself and the way it is produced—has made a formalised startup investment strategy essential.

Engineering the future of material science and manufacturing

TekVentures has established a broad thesis that covers the entire lifecycle of industrial materials. Ganguly describes this taxonomy as encompassing “discovery, sourcing, manufacturing, and reusing”. In the discovery phase, the fund is particularly interested in how artificial intelligence, machine learning, and quantum computing can “supercharge” the development of new materials, potentially reducing discovery timelines from years to months.

The fund’s investment focus sits “where science meets scale,” targeting circular polymers, bio-based feedstocks, and electrified processes. Sourcing is another critical pillar, with a focus on bio-based materials and sustainable alternatives to petroleum-derived products. Furthermore, the fund is looking at “industrial intelligence”—the digital layer that includes predictive analytics and supply chain visibility—as well as automation and robotics to redefine the “made world”.

“Materials are everywhere, they move society forward,” says Ganguly. “The thesis sounds niche, but it’s not – it’s everywhere, from what we wear to what we drive to what we use on a daily basis.”

Given the broad range of sectors Teknor Apex services, the investment fund maintains an industry-agnostic stance, seeking innovations that can be applied across Teknor Apex’s diverse portfolio, including automotive interiors, building materials, and data centre cabling. Ganguly emphasises a preference for “platform” technologies rather than bespoke innovations.

“We really love to support founders who are building platforms for a variety of industries and use cases, and really disrupt the cost structure and the sustainability footprint,” Ganguly says.

A hybridised model for corporate venturing

Drawing on his previous experience leading Goodyear Ventures, Ganguly has structured TekVentures as a “hybridised” unit that blends the best characteristics of financial and corporate venture capital.

While the fund is a single-LP entity backed by the Teknor Apex board, its incentive structures are designed to mirror the financial VC world. For example, the investment team is awarded upside on startup exits, a mechanism intended to ensure they are “relentlessly startup-friendly” and focused on driving value for founders.

However, the unit remains “tethered very strongly” to the parent company’s core priorities. Unlike some CVC units that operate at a distance, TekVentures is designed to be an integral part of the organization’s “Build, Buy, Partner and Invest” framework. The team has avoided the typical GP-LP structure in favour of an arrangement where the venture team remains employees of Teknor Apex, allowing for deeper integration with the “mothership”.

A key differentiator at TekVentures is the building of the platform and partnership function from day one.

“For an investing team to be efficiently deploying capital, the platforming and the partnerships team are vitally important. These are lessons learned from old battle scars,” Ganguly explains.

At TekVentures, a dedicated platform and partnership team is tasked with leveraging the parent company’s 100 years of manufacturing knowledge, scale-up experience, and global customer network to support portfolio companies.

Bridging the gap between pilot and production

One of the most innovative aspects of TekVentures approach is the introduction of a “transfer function”—a role that sits at the intersection of the venture unit and the business units. This function has responsibility for driving innovation through the company, ensuring that startup collaborations do not simply wither after a “cold intro”.

“We don’t expect to hand off and stay passive. We expect to have an active role in managing and enabling the relationship,” says Ganguly. 

Success is measured by concrete metrics. The key question for the team is: “Are we helping mothership revenues go up or costs go down by working with the startups?”

The fund has already begun putting these principles into practice with its first five portfolio companies. In one instance, Teknor Apex is an active customer of a startup; in another, it is jointly developing a product by contributing its own intellectual property (IP) in exchange for a revenue share. This “value-added capital” approach allows the 100-year-old firm to refresh itself while providing startups with assets that are difficult to find in the financial VC market.

“These collaborations are becoming the norm, and we are designing it in as a part of the investment, it’s not an afterthought,” Ganguly notes.

Global reach and operational agility

Despite its roots in Rhode Island, TekVentures is a global player. The current portfolio and deal flow include companies in the US, Europe, and India, reflecting the global footprint of the parent company. While the fund primarily focuses on early-stage deals—typically from seed to series A—it maintains the flexibility to participate in later-stage rounds, such as a recent series C deal in the works, when there is an exceptional strategic fit.

To maintain the agility required to compete for the best deals, the fund has begun measuring “time to wiring”—the duration from the initial meeting and due diligence to the actual transfer of funds. This metric is part of a broader effort to build the company’s “investment muscle” and ensure it is seen as a responsive partner in the startup ecosystem.

As Teknor Apex’s history is one of adaptation and openness to change, an attitude that turned a small tire retreading business from 1924 into a leader in global materials science – touching almost every aspect of daily life. Tapping into that same culture will serve it well in the coming era of AI and circular chemistry.