Venture Capital – Big business backs e-business

ABB of Switzerland and Sweden’s Investor AB have joined forces with other major corporate partners to establish a a1 billion plus ($927 million) venture fund, b-business partners. b-business partners has dual objectives: to invest in European business-to-business e-commerce propositions and to build bridges between new’ and old’ economy businesses.

ABB and Investor are each contributing a300 million of b-business partners’ initial capital. b-business’s investors span a wide industrial spectrum: other partners in the Netherlands-incorporated vehicle include AstraZeneca, Atlas Copco, Electrolux, Saab Aerospace, Sandvik, SEB, StoraEnso and WM-data.

The new vehicle will invest both in stand-alone start-ups and business-to-business initiatives within the partner companies that are potential spin-out IPO candidates.

b-business’s founders plan to take the venture group public within three years.

As well as reaping financial returns on b-business’s venture investments, the partner companies expect to benefit from collaboration on new Internet business applications developed within portfolio companies and to build broader business relationships, either as customers or suppliers, with investees.

Both b-business’s cornerstone investors have been swift to seize the opportunities offered by the new’ economy. “At ABB, we are embracing the new economy with its greater emphasis on IT, knowledge and service. Across the whole spectrum of our businesses, from power transmission to financial services, we add intelligence through IT as the route to success” says Goran Lindahl, ABB’s president and CEO.

Investor AB’s competitive advantage in the business-to-business sector rests, the firm believes, on its ability to leverage its network of established industry enterprises and its existing venture capital and private equity initiatives in Europe, the US and Asia. Marcus Wallenberg, CEO of Investor AB, says: “The launch of b-business partners reaffirms the commitment Investor has made to invest in companies that are ready to rise to the challenge and reap the benefits of this new economy”.

b-business partners announced its first investment at the end of March, immediately following the venture group’s official launch. It joined forces with Global Retail Partners and Vivendi in a a18 million funding round for of Dusseldorf, Europe’s leading business-to-business Internet exchange for surplus assets and excess inventory. The company’s web site, offering assets and equipment worth DM750 million, currently registers 250,000 hits a week. Surplex’s CEO, Bruno Schick comments that the three venture backers “are ideal partners with whom we will be able to grow our business internationally as well as providing us with industry expertise in our key markets”.