Value added investing

The last two months we have been running the last miles in closing a new very exciting investment. The days have been packed with due diligence-activities, deal structuring and negotiations. Just like any regular venture capital deal. This intense but pretty standardized process you can read about in any book on venture investing. Being a corporate we also add another process to the game. I thought I’d spend a few words on what’s specific for us when assessing an investment.

You are aware our investment strategy stands on two legs – return on the specific investment and contribution to Volvo Group growth. Assessing the latter is a challenging process but also key to making true value added investments, where both parties gain more than just capital and ownership. This is where we as a corporate investor can make significant difference. During the investment process we assess the commercial potential of cooperating between Volvo and the company. As Volvo Venture’s focus is companies who already have services or products on the market the investment hypothesis typically builds on the idea of establishing joint commercial activities and packaging of service or product with vehicle as a first step. Second, we typically look at some level of technical integration to make the offer even more valuable for customers. So, assessing this potential of an investment means we engage our sales and distribution channels in Europe, Americas and Asia to decide where we start, which business model we use and how we split revenues. Typically this is done through a series of workshops both with and without the company we’re investing in. This is a very thorough process to build a solid, mutual business case and investment platform. Significant value is often uncovered for both parties through the process and after. This is what we mean when we say we contribute to accelerated growth for both parties. This is value added corporate investing.

/Johan

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2 Responses to Value added investing

  1. Ruth says:

    Reg value added investments – we promote value investments in a broader sense, welcome to our network!

  2. Y says:

    This is great
    As I mentioned, Jonas, 1+1 = 11

    BR
    Yair

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