Nabtesco Technology Ventures (NTV) is the corporate venture capital arm of Nabtesco Corp., a nearly 100-year-old Japanese manufacturer celebrated for its innovations in motion control and automation technologies. With a robust investment fund of EUR 75 million, NTV is dedicated to creating an open-innovation ecosystem that encourages collaboration and accelerates technological advancements. The firm actively seeks partnerships with promising industrial technology startups, focusing on those that can synergize with Nabtesco’s expertise. This approach not only fosters innovation in areas such as robotics and automation but also positions NTV to drive significant impact within the industry by integrating new technologies that enhance efficiency and performance.
Hiroshi Nerima, Managing Partner of Nabtesco Technology Ventures
Hiroshi Nerima, the Managing Partner of Nabtesco Technology Ventures, has over 30 years of experience in international finance and corporate strategy, bringing a wealth of knowledge to his role at NTV. He leads the creation of NTV’s investment strategies, focusing on building an ecosystem that nurtures technological advancement. Mr. Nerima’s diverse career includes significant contributions to financial institutions and manufacturing firms, showcasing his expertise in identifying growth opportunities. Based in Zurich, he is committed to driving innovation and strategic partnerships within the venture capital landscape.
This interview with Mr. Nerima looks into how global startup ecosystem enhances NTV’s investment strategies, and what differentiates NTV from other corporate venture capital firms, leveraging Nabtesco’s legacy to identify disruptive technologies. Additionally, Mr. Nerima provides keen perspective on emerging industries that hold promise for NTV’s investment strategy, highlighting how the firm stays ahead in a rapidly changing market and providing insight into corporate venture capital.
Bridges: NTV is based in Zurich, a hub for innovation and technology. How does this location benefit NTV’s investment strategy, considering factors such as access to talent, proximity to other investors, and the overall startup ecosystem?
Hiroshi Nerima: As evidenced by the concentration of development centers for Google and Microsoft in the area, Zurich, Switzerland attracts talent from across Europe and around the globe, thanks to its high quality of life. The region is also home to prestigious institutions such as ETH Zurich and EPFL, which are at the forefront of DeepTech research and higher education.
Recently, we have explored collaborations, such as investing in an AI startup focused on autonomous driving and optimization that originated from ETH, as well as potential partnerships with Nabtesco Corporation in joint development and market entry in Japan.
Furthermore, Emerald Technology Ventures serves as the bridge between the global venture ecosystem and Nabtesco Corporation. Headquartered in Zurich, with offices in Toronto, Singapore, and Tokyo, Emerald is a professional VC specializing in DeepTech and Climate Tech. With over 24 years of history, greater than 50 employees, and assets under management and advise exceeding USD 1 billion, Emerald is distinguished by its partners’ engineering backgrounds and their experience in R&D within large corporations. Additionally, their clients (LPs) are not institutional investors, but corporates; this gives Emerald a deep understanding of the “innovation dilemma” that large companies face, as well as enables them to provide precise solutions that align with the strategic returns sought by corporate venture capital (CVC) units.
Moreover, I believe that the cautious and meticulous approach typical of Swiss and European VCs aligns well with the corporate culture of Japanese manufacturing companies, such as Nabtesco, which is an additional benefit of collaboration between the startup ecosystem and Japanese manufacturers.
As a result of the six-year partnership between NTV/Nabtesco Corporation and Emerald, NTV has reviewed over 800 startups that went through Emerald’s initial screening process and has explored collaborations, including POCs, with 25 of them. Among these, NTV invested in 14 startups, exited four, and Nabtesco acquired one. As NTV’s Managing Partner and an Executive Officer of Nabtesco Corporation, I have spent the past six years stationed at Emerald’s Zurich office, leveraging the full potential of their talented team to achieve 100% of our strategic return objectives in this partnership. In addition, our financial returns have also exceeded expectations, with a gross IRR of over 30%, surpassing the average level for professional VCs, thanks to the excellent advice from Emerald’s skilled professionals.
Nabtesco has a rich history in motion control technology. How does NTV envision leveraging this legacy to identify and invest in disruptive technologies that will shape the future of the industry?
Motion control technology has evolved over the past century, initially through pneumatic systems and later through hydraulic systems. However, hydraulic technology is closely tied to internal combustion engines, contributing negatively to CO2 emissions and environmental impact. As reducing environmental burden and addressing climate change become critical societal challenges, motion control technology now faces major trends towards electrification and automation.
In forward looking, Nabtesco will place even greater emphasis on the smart evolution of motion control technology in next-generation mobility, smart robotics, and environment management/GX sectors. This will involve accelerating open innovation, particularly through collaboration with startups. The reason being that new customer value in motion control technology will increasingly derive from software and AI, rather than hardware.
In forward looking, Nabtesco will place even greater emphasis on the smart evolution of motion control technology in next-generation mobility, smart robotics, and environment management/GX sectors.
Hiroshi Nerima, Managing Partner of Nabtesco Technology Ventures
As Nabtesco does not possess in-house expertise in these areas, it is crucial for the company to identify and collaborate with outstanding startups, globally, that are experiencing rapid growth in these fields, to address societal challenges and ensure Nabtesco’s sustainable growth. On the other hand, startups specializing in software and AI development require hardware to bring their technological solutions to market. For these startups, collaborating with Nabtesco offers a mutually beneficial opportunity to leverage each other’s strengths.
Beyond traditional sectors, which emerging industries or technologies do you believe hold the most promise for NTV’s investment strategy? How does NTV stay ahead of the curve in identifying these trends?
Nabtesco is a Tier 1 component supplier in the industrial machinery sector, operating in a B2B environment. Its original equipment manufacturer (OEM) customers are global, and the technology must also be globally competitive to survive. Therefore, from the perspectives of technology scouting and development, focusing on specific regions is not particularly important, although customization may be required based on the regional characteristics of our customers.
However, in terms of countries or regions where our OEM customers operate, the historical success in China over the past 20 years may require a paradigm shift in Nabtesco’s management strategy, in light of significant geopolitical changes surrounding the country. In North America, regardless of whether the new administration next year is Republican or Democratic, the region’s long-term growth as the world’s largest single market, with a population expected to continue growing into the late 21st century, leaves Nabtesco with no choice but to remain engaged. Additionally, Asia, particularly India, is poised to become a massive market in the latter half of the 21st century, which Nabtesco cannot afford to overlook.
