There are high hopes for Toru the robot, despite the fact that it hasn’t even made it out of the “nursery” yet. Toru, a prototype built by start-up Magazino, has enormous potential to achieve an outstanding career in the logistics sector and in industrial applications. It can, for example, recognize objects, grab them, and transport them from a warehouse shelf to a packing station. “Many online retailers are desperately waiting for such a perception-based system,” says Frederik Brantner, one of the three founders of Magazino. “Although today’s systems can automatically remove entire pallets or crates from a warehouse, they are unable to transport individual items in such a manner.” Magazino brings together extensive expertise in software development and electrical and mechanical engineering. With its focus on quickly transforming Toru into a market-ready product, Magazino has a considerable lead over competitors working on similar autonomous systems.
It’s All About Start-ups
Ingenuity, speed and the ability to innovate are the characteristic strengths of start-ups. Siemens Innovative Ventures taps into these strengths and combines them with the advantages offered by a large company. It does so through partnerships and by establishing its own start-ups.
Help Wanted: Autonomous Robotic Systems
Magazino captured the attention of Siemens Novel Businesses (SNB), one of three departments at Siemens Innovative Ventures, back at the beginning of 2014, which was one year after Magazino was founded. “For quite some time, we’ve been observing that demand for autonomous robotic systems— systems that perceive their surroundings with the help of sensors and can then make decisions based on the information they collect – is growing,” says Claudia-Camilla Malcher, a start-up expert at SNB. Specialists at SNB are particularly interested in new companies that address business areas that Siemens itself is not involved in, but which could nevertheless serve as a logical addition to its portfolio in the near future. Magazino is exactly such a company; so after extensive discussions, the start-up’s founders and SNB agreed on a plan to jointly develop the young company, whereby SNB purchased the shares of Magazino’s previous financial investors.
As soon as Toru is market-ready, Magazino will be confronted with challenges entirely different from those it faced in the development phase. Toru has an advantage over conventional logistics systems in that it can perform tasks that only human beings have been capable of up until now. But unlike people, it can be mass produced and marketed on an international scale. That’s where Siemens could come in, since the development and implementation of production lines for highly complex systems is one of Siemens’ core areas of expertise, and the company also operates global sales and service networks. “That’s the interface where start-ups and Siemens can ideally join forces,” says Malcher. Siemens’ minority interest in Magazino could later be increased — even to the point that it could be incorporation into the Siemens portfolio.
A Bridge between Start-ups and Siemens
Malcher got to know the founders of Magazino while waiting in line at a snack stand in 2014. This was not as much of a coincidence as it might seem to be, as the snack stand was located at an event held by a funding organization for high-tech start-ups — an event regularly attended by employees from Siemens Innovative Ventures.
The scouts at the Technology-to-Business Centers (TTB) in Berkeley, California, Shanghai, Munich, and soon also in Tel Aviv, have been building bridges between start-ups and Siemens for more than 15 years through the initiation of business partnerships. For example, Siemens’ Product Lifecycle Management Business Unit once intended to offer a system for virtual product simulations from the cloud — as software as a service (SaaS) —and needed an innovative solution for this because conventional approaches were not suitable. TTB Berkeley then identified Rescale, which specialized in simulation software for use on cloud platforms and suggested the company as a potential partner.
Sensors that Stormed the Market
It is not unusual for highly innovative technologies used by Siemens in a particular product to also have applications in areas that are not part of the Siemens portfolio. In addition, sometimes inventors at Siemens develop a technology originally focusing on a specific core business area at a Business Unit that, for strategic reasons, for example, does not end up becoming a Siemens product.. In other words, there’s often a lot of potential for external commercialization of Siemens technologies with the help of the Siemens Technology Accelerator (STA). In such situations, STA will sell or license technologies, or else establish a start-up.
This is how Pyreos Ltd. in Scotland came into existence. The story of the company, which was established in 2007, illustrates how it can often take quite some time to get from an idea to a market-ready product. Originally, researchers at Corporate Technology had developed pyroelectric infrared sensors that they then patented. The sensors are much smaller and less expensive than previous models on the market, and are also much more resistant and reliable in rough environments. A high level of investment was required to implement the technology. STA began looking for additional investors for Pyreos, as well as for a suitable location for the start-up, both of which were eventually found in Scotland. After years of hard work to firmly establish the company, success has been attained, as Pyreos is currently in discussions with several customers who want to use the new infrared sensor for, among other things, the spectrometric analyses of fluids. The company now has 30 employees who specialize in spectrometry, gas measurement technology, and gesture recognition systems.
With TTB, STA, and SNB, Innovative Ventures is present in all start-up scenes around the world. “We are in contact with more than 1,000 young companies worldwide,” says Dr. Rudolf Freytag, Head of Innovative Ventures.
Siemens Venture Capital: A Financing Partner
Like Innovative Ventures, Siemens Venture Capital (SVC) focuses on start-ups, but that’s where the similarity ends. SVC invests in start-ups in the U.S., Europe, and Asia and helps them establish their business operations. It also provides capital to established companies seeking to expand and grow. Since 1999, SVC has invested more than €800 million in 180 companies. Its focus here is on companies that develop industrial software and cybersecurity solutions, as well as technologies for energy management, mobility management, and molecular diagnostics. SVC is not just about investment, as the organization’s activities also help Siemens gain access to new technology solutions and markets. For example, Siemens is involved in the additive manufacturing area, which many believe offers the potential to disruptively transform entire industries, through SVC’s investment in Materials Solutions Limited. This British company is a world leader in innovative 3D printing techniques, especially for modules made of alloys and for large components. All in all, Innovative Ventures and Siemens Venture Capital (SVC) together have the concentrated expertise needed to optimally combine the strengths of start-ups together with those of a major company.
Innovations are proceeding at a much faster pace than ever before. “The Siemens approach to working with start-ups, establishing, and investing in them has proved to be very successful over the last 15 years, especially as start-ups offer Siemens a valuable look into the future,” Freytag explains. “Start-ups enable access to new technologies and allow new business models to be quickly tested in a flexible manner.”