This article was published in London Environmental Investment Forum Blog. The full text can be found here.
By Tom Whitehouse
The London Environmental Investment Forum (LEIF) and Global Corporate Venturing have today published ‘New Fusions in Advanced Materials Innovation and Corporate Venture Capital’, a new report which lists ‘the top 12 advanced material start-ups with corporate backers’ and ‘the top 10 advanced material corporate VCs’.
Technologies developed by the top 12 start-ups include:
– new catalysts that ‘eat’ carbon dioxide
– super-strong and ductile (but light) alloys for advanced robotics
– bendy batteries, transistors and displays
– self-cleaning, self-healing non-corrosive metals
The top 10 corporate venture capitalists in advanced materials have committed more than $2bn to this sector over the last five years and include:
– oil and gas companies (such as BP)
– chemicals companies (such as BASF)
– ICT companies (such as Samsung)
The top 12 advanced materials start-ups have between them raised more than $150m in the last 30 months from corporate VCs in from the industries they serve. They are: APWorks, Avantium, Expanite, Heliatek, Imprint, Modumetal, Novomer, Polyera, Rive Technology, Slips Technologies, SmartKem and XG Sciences.
Tom Whitehouse, LEIF Chairman, said: “The world’s largest businesses require advanced materials innovation if they are to stay at the top. Improving their industrial processes, making their existing products better and devising new products all need advanced materials.”
“What we’ve found particularly interesting and revealing is how advanced materials innovation in one industry can migrate to another and flourish there. For example a material developed for the aviation industry is adopted by the robotics sector,” he added.
“And as advanced materials migrate across industries, investment follows them. So we’re now seeing oil and gas companies co-investing with ICT, pharma and health companies. Billons are being invested, which can only lead to more innovation.”
Toby Lewis, editor of Global Corporate Venturing, said: “Advanced materials is a major sector where corporates have taken on a leadership role as investors in start-ups and high growth companies. Barring some specialists, financial investors remain wary about funding companies, so it has been great to support Tom Whitehouse and LEIF in his excellent research into the activity in the sector, which corporate investors have arguably made their own.”
The report forecasts that the deepening and widening of the pool of corporate venture capital available to advanced materials start-ups 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; anti corrosion technologies are of equal interest to the oil and gas industry as they are to steel and construction. “
The increase in advance materials investing is driven by several factors including:
– Innovation across various technology sectors (such as nano-tech) and ‘discovery’ of new materials (such as graphene)
– Regulation e.g. for better environmental and technical performance (e.g. increased fuel efficiency requiring lighter materials)
– 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