Top materials venturers and startups

Advanced materials are of increasing importance in the clean deals being done by a widening group of corporate venturing units. Once the domain of oil and chemicals, other industries have increased their venture activities in advanced materials over the last few years.

This deepening and widening of the pool of corporate venture capital available to advanced materials startups is set to continue as several industries require the benefits that advanced materials offer. For example, “light-weighting” (making materials lighter without compromising on strength) is of equal importance to the aviation, automotive, robotics and manufacturing sectors, and anti-corrosion technologies are of equal interest to the oil and gas industry as they are to  steel and construction.

The first table below lists 12 companies backed in the past three years by large corporations with a strategic interest in advanced materials. The second lists the top 10 corporate venturing investors in advanced materials, which have committed more than $2bn to this sector over the past five years. Such corporations need awareness of, and access to, advanced material innovation across the world. Happiness is deal flow from multiple regions and sources. They are increasingly active, collaborative and international.

Belgium-based chemicals giant Solvay may hold the record for being the most active corporate venturing investor in advanced materials, with investments in six venture funds in addition to Pangaea – Aster Capital, Phoenix Venture Partners, Conduit Ventures, Capricorn Venture Partners, Soffinova Ventures and the Korea Advanced Materials Fund. Solvay also invests directly from its in house venture unit.

Germany-based chemicals giants Evonik is not far behind. In addition to backing Pangaea, Evonik is an investor in High-tech Gründerfonds, the German early-stage investment company, and in Zurich and Toronto-based Emerald Technology Ventures. Both High-tech Gründerfonds and Emerald include advanced materials in their investment focus. Emerald’s other corporate backers include Saint Gobain.

Nova External Venturing, France-based Saint Gobain’s venture unit, backs the US venture companies Phoenix Venture Partners and Navitas Capital, and the UK-based Environmental Technologies Fund.

German chemicals company BASF backs Pangaea and the US-based venture funds Arch Venture Partners and NGEN, Canada-based Crysalix Energy Limited Partner-ship, Japan-based Fintech GIMV fund, and Taipei-based Tsing Capital, all of which have an advanced materials focus.

Tsing Capital is backed by Belgian steel wire and coatings company Bekaert, whose other investments in venture funds are Pangaea, US-based NGEN Partners and Germany-based Munich Venture Partners, which also have an advanced materials focus. Other backers of Tsing Capital include the oil and gas company BP, the health and nutrition company DSM, the power company ABB, and the materials company Applied Materials.

Tsing Capital brings us back to Solvay. One of Tsing Capital’s most recent investments was in Polyera, a US-based business supplying advanced semiconductor materials for the printed and flexible electronics industry. Tsing Capital’s co-investors in Polyera include Solvay, which invested directly from its in-house venture unit.

As more corporations follow these pioneers’ lead, the specialist advanced materials investors like Tsing and Pangaea are getting funds from quite diverse industries.

This growth is being driven by at least three factors – innovation across various technology sectors (such as nanotech) and discovery of new materials (such as graphene), regulation for better environmental and technical performance, growth of the hardware sector, particularly robotics, drones and advanced manufacturing, increasing the need for smarter and better-performing materials that combine strength with durability.