Sustainable investments

Investing in tomorrow's technologies
Johan Carlsson is President of Volvo Technology Transfer, VTT, one of the transport industry’s most successful corporate venture capital companies. Since 1997, VTT has made successful investments in various fields including environmental technologies and sustainable business.

"Founded in 1997, VTT is an investment company owned by the Volvo Group. VTT invests in businesses on the leading edge of the transport industry. Each investment should have a positive return in itself while also contributing to the growth and competitiveness of the Volvo Group.

All investments are based on Volvo Group future strategies and each investment aims at driving and increasing the robustness of our strategies. To fulfill our vision of becoming the world leader in sustainable transport solutions, investments are made to pioneer new products and services. Typically, the investments are related to long and medium-term business and technology needs.

A decade ago, our investments were highly related to fuel efficiency, e.g. in fuel-cells and batteries. Even then we could see that such technologies would have significant impact on vehicle's fuel-consumption. Today, focus is still on improving transportation efficiency by, for example, connecting the vehicles in global or local transportation systems and increasing service to customers. We continuously search for the best companies to cooperate with and invest in.

Focusing on environmentally enhanced technology

Each VTT investment should contribute to the Volvo Group delivering sustainable transport solutions to customers. This can include investing in new hybrid solutions, urban transportation systems and new products requested by our customers.

A recent example includes our investments in the cleaning of natural gas from landfills. Cleangas is a carbon neutral fuel, thus contributing to reduced environmental impact from transports. This is a typical example of a 'Clean Tech investment'.

Develop, acquire or make it a supplier

Until now, we have mainly invested in ‘start ups’, that is, companies in the phase of testing a product. We will leave these very early ones for more mature business stages; ‘scale-ups’, which, having built products and tested them, are now looking for a partner to grow the business faster as well as companies running a mature business looking for new markets. We can choose to develop a company, acquire it or make it a supplier.

When assessing a possible investment, we not only look at the company’s isolated potential, but also the potential associated with the Volvo Group. To find these companies, we cooperate with an extensive global network of entrepreneurs, universities and other investors.

As investors we are dedicated to helping the company succeed. We do not engage in short term investments or ‘quick fixes,’ or in investments which may harm the environment or other assets.

In our experience, the best businesses have sustainability embedded in their business model.

For the company, the added value is money, competence and capability. They come to market faster, and they come into contact with companies and businesses.

We invest in high-potential/high-risk companies.

We make thorough risk assessments and due diligence, looking into all aspects of the business including balance sheets and history, to determine whether it is a sound business. A prerequisite is that we can foresee that the company will grow fast, be attractive for deeper partnership, and that the parties mutually will make good business and be more profitable thanks to this partnership."

Johan Carlsson, President Volvo Technology Transfer

 

Foto: Marie Ullnert, Bilduppdraget.