Seeking to buck the trend of continuously shrinking corporate venture groups, Siemens Mobile Acceleration has opened its first office in the United States and is planning to close its first two U.S. deals within the next six months. It invests in early-stage deals in the wireless, mobile communications and mobile data transmission sectors and claims to be the most active early-stage wireless investor in Europe.
Siemens Mobile Acceleration was founded in July 2001 and has offices in Oberhaching, Germany, Beijing, Stockholm, Shanghai and now San Jose, Calif. The two deals that the group expects to close within the next six months will be its first U.S. portfolio companies and will become 20% of the unit’s portfolio, barring any other investments outside the United States.
“We strongly believe that this is a very good time for wireless investments,” says Dietrich Ulmer, president and CEO of Siemens Mobile Acceleration. “We are coming here willing to invest. There are some huge funds with billions, but they are not willing to invest. We are willing to invest.” The venture group has a budget of $20 million for the 2003 fiscal year and usually invests approximately $1 million per deal. All of its investments so far have been in Europe and Asia.
While stressing its eagerness to take advantage of good deals on portfolio companies, Ulmer insists that Siemens Mobile Acceleration will be wedded to the strategic goals of its parent company, Siemens. “We only make investments if someone from one of the business units is saying: Yes, I’m interested in this investment,'” says Ulmer.
“The United States is a part of the world where we have a lot of coverage so far,” says Man-Kin Park, Siemens Mobile Acceleration’s COO. “The U.S. market for wireless startups brings unique opportunities.”
“The business has seen 1,800 deals, but 10% to 15% of the deal flow was coming from the United States when we didn’t have an office here,” says Managing Director Gerald Brady, who will run the San Jose office with Vice President Sven Weber.
Siemens Mobile Acceleration currently has eight portfolio companies, including Appload Nordic, a Swedish developer of a server that allows over-the-air downloading of rich content applications to mobile phones; Stockholm-based Mediabricks, which develops, markets and sells its Mobile Flipbook Technologies platform; Magus Soft, a Beijing-based developer and publisher of mobile games and entertainment applications; Scaraboo, which develops, operates and markets entertainment products based on quizzes, competitions and betting games for use with mobile devices; and Svox, a provider of text-to-speech software and a spin-off of the Swiss Federal Institute of Technology in Zurich.
In a separate move, Siemens Venture Capital effectively laid off at least two of its most senior investment professionals. Sources say the venture unit, which makes later stage investments and has approximately $542 million under management, will likely have more layoffs by April, according to a source familiar with the corporate venture capital group.
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