Siemens maintains corporate VC dealflow

Siemens Venture Capital (SVC), the corporate venture unit of German electronics group Siemens, has announced two further investments from its E500m evergreen fund, taking the total number of transactions in 2003 to fourteen.

The fund, headed by Bjoern Eske Christensen, SVC’s president and CEO, has participated in a $9m round for Myrio Corporation, a US provider of software services for internet-based video. Prior to that, the firm announced a $6m first round investment in CenterBoard, a US company involved in the emerging enterprise information integration (EII) sector.

Last month, the firm made an undisclosed investment in IP Unity, a US network solutions service provider. “We are extending our reach into IP telephony by investing in IP Unity, a first-mover and leading provider in media server solutions,” said Christensen. “We believe the company's commitment to innovation and its focus on customer needs will enable it to maintain its leadership position.'

The evergreen fund invests in Europe, the US and Israel and across all sectors of interest for Siemens, including information and communications technology, medical solutions, automation and control, and power.

SVC has now completed fourteen investments in 2003, although the unit declined to disclose its total investment for the year. “We don’t set ourselves a target amount of deals to complete on a yearly basis, nor do we set aside a specific amount of capital,” said an SVC spokesperson. “We are looking for quality investments that provide us with synergies at one of our businesses. We are a strategic investor but the most important aspect of our investment is financial return.”

At the time of the fund’s launch in 1999, SVC initially invested via European and US venture capital funds, a strategy aimed at gaining access to the venture capital market.” Today SVC focuses predominantly on direct investments.

SVC’s investment pattern bucks the broader European trend. According to latest report compiled by the European Venture Capital Association (EVCA), which measures the level of investment by 82 funds across Europe, found that only E337m was invested in 2002, down 38 per cent from the E544m invested in 2001. The number of financings was also down from 474 in 2001 to 377 last year, a decline of over 20 per cent. 

European corporate venturers raised only E58m for their funds from independent sources in 2002, a significant decline of almost 70 per cent from 2001, when E179m was raised.