GCV Powerlist 2018: Ram Jambunathan

Ram Jambunathan is senior vice-president and managing director of SAP.IO, the Germany-based technology company’s business unit focused on incubating innovation both internal and external and driving new business models.

SAP.IO complements SAP’s commitment to Sapphire, a now-independent corporate venture capital (CVC) unit investing $2.5bn from the German parent in later-stage deals and VC funds.

Jambunathan said: “I have been in this role for the last 18 months, since we established SAP.IO. Prior to this, I led cloud and platform strategy as a member of SAP corporate strategy.

“It was at this time we realised that SAP needed a different way to incubate early-stage innovation, outside of the normal investment and development constructs of a big company.”

The fund has also been investing directly as well as incubating. In February, after his GCV Rising Stars 2018 award, SAP.iO Fund backed US-based data protection compliance software developer BigID’s $14m series A round.

Jambunathan said at the start of the year: “We also realised we needed to drive a build with an application programming interface first approach to establish this ecosystem and accelerate the pace of innovation around SAP application programming interfaces (APIs), data, and technologies, to ensure our customers could fully capture the value from their investments in digitisation.

“Three key things attracted me to CVC, at SAP particularly:

1. The potential to thoughtfully incubate innovation at SAP scale around APIs, business content, and technologies. Innovation continues to be what is long-term rewarded by the market in software. Like many other established companies with successful legacy-class presence in market, we saw that a renewal of how SAP incubates new value and drives innovation is required to capitalise on the industry-scale changes upon it. SAP has been incredibly successful for 45 years, and we believe this is a foundational approach to help drive success for the next 45 years. And few companies have the breadth and depth to do this in enterprise like SAP.
2. The power of SAP data. Whether you call data the new oil or data the new gold, that value of digitisation has become incredibly clear. And the ability to fully realise the value of new technologies such as machine learning and artificial intelligence, is dependent on the quality and availability of the right business data. I would assert that some of the most, if not the most, valuable enterprise data sits in an SAP customer’s business systems. The opportunity to drive CVC at SAP was then the opportunity to catalyse an ecosystem of innovation that SAP is uniquely positioned to drive
3. The opportunity to work in the early-stage ecosystem, again. Earlier in my career, I co-founded a fibre-optic infrastructure startup, T-Networks, now part of Broadcom [which was acquired by Avago for $37bn in early 2016] backed by Sequoia, Greylock, and USVP. Since then, I have waited for the right time to get engaged in a meaningful way again. I saw this as that opportunity – to be able to drive impact in a meaningful way.”

After leaving T-Networks after 5.5 years at the end of 2005, Jambunathan became a McKinsey consultant before joining SAP in mid-2009 and working his way up from a value engineering principal to senior vice-president and now MD of SAP.IO.

Jambunathan said over the past year it had set up the $35m SAP.IO Fund, SAP.IO Foundries and the SAP.IO Venture Studio and added: “It is important to emphasise these successes are all the more notable given that we started from zero a year ago.”

The SAP.IO Fund was established in the beginning of 2017 and has made at least seven investments, including in ClearMetal’s $9m, Niki.ai’s $2m and Paradata’s $10m respective A rounds.

The fund is expected to double its investment pace from Silicon Valley and Israel this year, Jambunathan said in an interview with Mint.

Jambunathan added: “We have been able to invest alongside the best independent VCs because, when the SAP.IO Fund makes an investment, we also get a business unit involved and formally commit to support that investment.

“The consistent feedback that I have received from the ecosystem – independent VCs, founders, and even other CVCs, is that we need to do a better job of delivering on the promise and demonstrating value.

“First, CVCs are unnaturally advantaged in helping startups succeed, because of the corporate parent – so why not take advantage of this, versus trying to position ourselves as independent of the business? Startups and entrepreneurs are attracted to CVCs by that business potential.

“Second, we need to ensure this is not a marketing or branding exercise. This is about creating valuable ecosystems that are in service of creating new and maintaining existing customers for both the startup and the corporate.”

The SAP.IO Foundries is its global network of accelerators for startups running in Tel Aviv, New York City and Berlin and San Francisco.

Jambunathan said its “notable successes include, in SF, we accelerated a cohort of women founded or led software-as-a-service companies this past summer in areas spanning internet of things, human resources, payments and healthcare.

“In fact, we see a big opportunity in investing and supporting women’s entrepreneurship. Not from a social responsibility angle, but it makes fundamental business sense.

“In Berlin, where we just had our demo day and completely changed the game for SAP, and corporate innovation, in Berlin. We accelerated 10 startups around the theme of machine learning-enabled business to business software-as-a-service applications.”

The SAP.IO Venture Studio was set up to enable SAP’s internal innovators – so-called intrapreneurs – to also build products, find customers and change industries.

Jambunathan said: “Its mission is to build the next growth businesses for SAP using a classic, VC-based testable investment model. To do this requires establishing a new function and a commensurate set of processes that are outside the normal portfolio processes and development rhythms that govern mature products at scale and sustaining innovations. We have four Venture Studio incubations,  including Atlas, Cygnuz, Apparent Financing and Free2Work Labs

“We believe this model of open incubation – bringing internal and external incubations together under one function (and sometimes under one roof) – is unique and helps drive our success both internally and externally.”

When asked about his challenges, Jambunathan’s time as an entrepreneur and management consultant shines through as he said: “I would reframe these not as challenges, but as high value opportunities.”

These include:

• Ensuring we as SAP have a single face and single message to startups. It is imperative that we reduce complexity for startups to work with SAP, and SAP.IO is playing a key role in this.
• Building new pathways for SAP to work with early-stage startups. These include new go-to market motions, such as original equipment manufacturer models and referral models that traditionally have not been accessible to small startups.
• Continuing to drive a build-with-SAP approach. This means not only the opportunity to build solutions on SAP platforms, but create value with SAP APIs.

“So even if your primary run-time is [peers] AWS, GCP, Azure, or SAP Cloud Platform, we want to ensure that you can deliver value to SAP customers with as little friction as possible.”

For an active member of the university cycling team at University of Michigan during his master’s and PhD in electrical engineering before the technical research and development department at Lucent Technologies, Jambunathan well understands the winning strategy for a rider comes from the team tactics employed.