E687 | Axel Deniz, CEO Bosch Business Innovations: Venture Building, Spinouts & How Corporates Can Power Europe’s Deep Tech Wave

0:00Welcome, everybody, to the EU VC Corporate Podcast. Today, we are joined by Axel Dennis, Head of Venture Building at Bosch. He's leading the effort to build new ventures by leveraging Bosch's technology patents and global reach. We'll dig into how Bosch approaches venture building, what drives their success, and what it really takes to scale businesses inside an industrial organization.

0:25Tear down this wall. It's more than just an alliance. This is a union of values. Let's start acting. This show is not investment advice, and the hosts of this episode may be invested in the funds and companies featured. It's going to be really exciting. It's going to be one of our first venture building, only focusing on venture building today. So eager to hear what you have to say, Axel, and what you will share. For now, let's start out about the principles and learnings around building your corporate venture entity. So Bosch's venture building model draws deeply from its centuries of engineering know-how and vast IP portfolio.

1:09How does that really allow you to shape the business that you do, your building principles, and how has that evolved as an ecosystem? You're right. Bosch is not the first company with this kind of vast engineering and IP and technology asset base. But it is new to Bosch. Venture building has not been in place so far. I got started in January 2025. The legacy before me is one of entrepreneurship approaches. So if you wish, in-house company building has been around for many, many years. Now, it turned out that it was not delivering the success that was expected. So I now have started with a fresh mandate, and that is really building spin-outs or spin-offs.

2:10meaning getting the technology that Bosch has out there as easy as possible to be picked up by external founders to be investable for third parties, institutional investors or other corporates. That's my job. And luckily, it couldn't be better. It's like a dream job because you're right Bosch is a 130 year old company which has piled up a big library of IP there's about almost 80 ,000 patents that are active right now every day 20 new patents are are being written there's of course the people inside the company there are more than 20 ,000 researchers around the globe, in different regions of the world, doing cutting-edge R &D.

3:13So the assets are there, and now it's up to me to commercialize them. So you're building these ventures, right, with also a strategic goal in mind, right? And then you move with startup speed. How do you align your builder's mindset with corporate priorities, and where do you draw the line between autonomy and alignment? Bosch is an amazing technology company. And it is super successful in its industries. There's automotive, there's factory automation, there's home and energy and building technologies, there's consumer products. But then the markets that lie five to 10 years in the future, they're hard to access for a large incumbent corporation.

3:59So my role is to look at this horizon two, horizon three level. What's on the horizon in 2030, 2035 in deep tech, in hardware? This is the questions I'm worrying about. So I build investment thesis or search fields or you name it. Not too many, around four to five of these areas of investment or venture building. and then I stick to them for about five years. Of course, if one thesis becomes obsolete, I can also replace it with another one. Nowadays, the world is changing so fast. You have to be quick at decision-making on a strategic level too. You have to refine your investment areas every year.

4:50That's my belief. And this is stuff I align with top-level management. So this is the kind of decision I'm not making myself. I'm aligning with the board of management at Bosch. And then on the level below that, when it comes to executing the venture building, I will build a hybrid model. So we will not do everything in-house. Rather, we will not outsource everything to a venture studio, but we will find a blended model of in-house building and using partners. And on the startup level, on the venture level, well, I'm looking for amazing founders that have done that already before and I want to give them the most autonomy possible.

5:41So if I go back a little bit, right? So the problem definition, could you take us, you know, give us, you know, 30 seconds more on that, right? So I understand it in a way that you are the one, I guess, together with your team that is doing the problem definition of what you want to try to solve? I mean, yes and no. We create problem statements out of our team, yes. We also are open for problem statements from the outside. So we are now really a founder's platform. We are not there yet. We're trying to become it. But we really want to attract seasoned entrepreneurs to come to us with problem statements too.

6:22Also, we are open for business with other corporates and happy to look at their problem statements and see where our IP or technology could fit in and where there's a void because the problems we're solving are so big. Not one company can solve them alone. We want to make sure that in the value chain of a problem, we fit in with our solution, but we don't assume that we could solve the problem alone. For example, now we're in the space of carbon capturing, removal of CO2, a very complicated, very big value chain that requires a lot of different capabilities. And if we can play our part in some areas of the value chain, we're happy to do it, to give IP, to give patents, to give access to our assets.

7:17But we know that there are others who could do other things better than us. So in this process of validation also, could you share a little bit about how do they go through the different gates? I guess you have a process for validating these ideas. Could you walk us through that? The process is pretty much the same everywhere, I guess. Our process is nothing out of the ordinary. Ideation, validation, you do customer validation, you look for problem solution fits, you go for early signals from customers very quickly, etc. What is important to me is that we become very quick at saying no to things.

8:04It's very easy to say yes and to fall in love with your idea and to keep going but what I encourage in our process is to come to a no as soon as possible and the other aspect is we are a corporate venture builder that is true but we're not i told you we're not aiming for full control no so at different stage gates i want to have externals validate the idea very quickly so the first stage gate is do we have triple a founders attracted to work on this being in love with the problem and dedicating their lifetime to it. Yeah. That's a strong signal. Later, of course, customer attraction. Yes. But then, latest after 12 months, when it comes to a seed round, we want our ventures to be able to raise seed independently in the market.

9:04I would double down and follow on with seed investment myself. Yes. But I would only do it if other seed investors are on board too and potentially leading the round. So this kind of thing, know very quickly and getting solid proof points from the external world. Excellent. Can you also share, you know, is it a classical model where the founders then have 80 % when they leave their first 12 months with Bosch or how do you handle that? Yes, we do that. And we also do joint ventures. The thing with the VC-friendly founder-led model that you have described is when you're in deep tech and hardware driven areas, what we are, it is not too easy to attract venture capital.

9:54It gets easier nowadays because we see this shift towards deep tech also in the VC world. Still, the patience and also the capability to comprehend the investment target is not there with all the investors out there. So we're also ready to do joint ventures with other corporates or even with universities when we have a technological, when we still have a lot of technology risk in a venture. Okay, so if we can bring technology that is already de-risked and it's mostly about execution, then we go for the 80 founders 20 us model yeah if the technology is more immature we're also happy to join venture to give the give it the time it needs yeah no it's super interesting at least time right because it is difficult to fund these uh these deep tech startups right you know the first of a kind thing is not easy to fund out there but you say it's becoming better right you Who do you like to work with?

11:02Who have you co-invested with, if you can say so? Well, the first batch of new startups will come out next year. So we have not done any new rounds or rounds so far, just because we just got started. On the portfolio level, so I inherited a portfolio of entrepreneurship startups. we were able to spin some of them out or sell them mostly to corporate buyers so we just sold bosch advanced ceramics which is a 3d or additive manufacturing startup in the ceramic space yeah we just sold it to sintocomio last week which is a japanese additive manufacturing champion and we will come up with a couple of more of those stories over the next months and then we will have new ventures built under the new model coming to the market fundraising second half of 2026 and what am I looking for?

12:03So hardware and deep tech ready early stage VCs comfortable to invest into spin-offs. Some are already there because they are clustered around big academic ecosystems like in Munich or, you know, we are working globally. So we have the same ecosystems in China or in, for example, we work in Pittsburgh a lot, which is a little underrated, which has a great ecosystem around the Carnegie Mellon in the space of robotics and AI. And there you find those early stage investors comfortable with spin-off models that are pretty much down my alley when it comes to looking for co-investors. That's a specific ecosystem, right?

12:52And I'll say, no, also I should say, right, you started not that long ago, so something will come out of it. Can you maybe share a little bit, your team is, are they all located here in Germany or where are they located? No, they're not. This is the good stuff. I mean, what is venture? compared to venture capital. In venture capital, it's about getting access early to a good deal flow that might or might not come your way. In a very competitive deal, you might, even if you find it or spot it, you might not even get into the deal. And venture building is kind of the opposite. So we make all those design choices ourselves, right?

13:37What's the tech stick? Who are the founders? in which market to build. And that's very important because a lot has been said about founder market fit, like in which kind of people do you invest? And I would say the venture market fit is equally important. So where? Now, as a VC, the company that pitches happens to be in Israel and you happen to have a structure to accommodate that and you would do the investment. But on my end, I have a global reach, and I could decide specifically in which market to launch a venture. And this is magnificent, and this is what we're going to do. So I have seven hubs from Brazil to Japan across the world in Middle East, Singapore, Africa, Europe, Northern America, Latin America, etc.

14:36And I could make those design choices, which is amazing. I've seen it in multiple places, right? I've seen it with Beans, venture builder out of Berlin, right? Yes, but their managing director spends a lot of time in basically acquiring talent, right? So what is the process with you at Bosch? We have seen what's not working. So working with mediocre people in pre-seat is potentially the biggest risk you can take. Yeah. So now let's say our hypothesis is, hey, if you found your company with us, it would give you technology that de-risks your business for about two years. It gives you a two-year head start.

15:27Yeah. All the complicated stuff that you would have to develop yourself, we've already done it. We have a lab test and we have a prototype. So this is the fast lane for technology to risk. Also, we give you the equity and all the incentivization. At the end, you would always found that there are founders who are more hardwired doing this kind of thing than starting their own business. It is my hypothesis. I would potentially have some late 20s, all-in kind of second-time founders, maybe out of India or out of Nairobi, Kenya, or maybe elsewhere that really can become this archetype of the founder that we're looking for.

16:26i also believe we can have a good offer for like people in their 40s you know already three four ventures under their belt maybe a family to feed who prefer that you know more de-risked approach and so i believe my conversion rate like the success rate of the ventures i will build with the setup is better or higher and this speaks to specific people. Of course I don't have those founders within Bosch. It's a big big company more than 400 ,000 people but I will only find very few potentially CTOs who are willing to make the jump. So I'm relying heavily on founders from the outside world. So what are we going to do?

17:18So first of all, building a talent platform. I admit Bosch is potentially not the first go-to brand in the market. If you would think about where do I build my next venture? We're not Y Combinator, we're not any of these. So my first task is to build this brand, the talent brand that we need. The second is I want to be quick with setting up this program so I will definitely work with partners. So I'm already scanning a couple of global partners who are very well rooted in the VC and startup ecosystem around the globe and also our universities. And my sourcing strategy is first, become an attractive brand, and then second, source the entrepreneurs through partners.

18:17Well, this sounds really great. I think it's a really interesting approach, and I think it's the right approach to do it, right? Because without the talent, you don't get anywhere. But in this process, right, how do you then envision also that you will collaborate with the people around you You talked a little bit about, you know, nice to have the VCs in Pittsburgh, right? But how does external partners and other corporates in joint ventures help you accelerate scaling and live with the market validation? How do you see that in the future? How will you make that happen? It's like a party. When you have a potluck, and I just had one, because at the time we recorded this, it's about Thanksgiving time.

19:04And when I invite my guests, I ask them to bring the dish they can make the best. And this makes a very nice buffet of only the best and most delicious dishes. So I apply the same to venture building. I know as Bosch we can be great at providing this technological assets and IP. Period. Also we can provide cash, yes, but that's a commodity. So basically for everything else, I'm open for partners. The entrepreneurs we have discussed, the VCs we have discussed. We can talk a little more about scalars and other corporates, because here, especially for the JV model, it's very attractive to close capability gaps together.

19:55So I give you another, or let's go back to the example of current capturing. In this field, Bosch is about one to two years behind. It's a matter of fact, it's not a secret I'm telling you here. Just by the time Bosch has started working and researching in this direction, other startups were already founded and running. So what do you do? You can now start working with those more scale-ups that are out there right now and try to come into joint development agreements and potentially even into JV structures because we don't want to buy them and we're not going to invest into them because this is what Bosch Mentors does, that's our CVC.

20:47and also we could never influence the roadmap with the share that we could afford or want to pay. So we're co-creating with scaleups or we're co-creating with other corporates. The way we do it is we select our fields. Also there's CARM, yes, but there's software-defined manufacturing, as we said, it can be anything from digital twin robotics, et cetera. and there's healthcare, specific areas in healthcare. So we create lists, literally, and we create our, we make business intelligence. And then we come up with lists of partners and then we approach them straightforward and pitch a collaboration or a co-investment.

21:39This is a big time of our day-to-day job. With universities, it's a little different. those kind of partners I try to establish a multi-year deep collaboration so a good example is because we've already talked about it is Carnegie Mellon this is a university that Bosch has already established collaboration years ago there is a Carnegie Bosch Institute there are professors, postdocs, PhDs personnel that works together for decades doing AI research and robotics research. In that sense, I'm going to have like five to six universities globally that I collaborate with very deeply and really create a couple of ventures in the same space, in the same area, also to have the learning curve.

22:37That's interesting. Nobody is also a good reach you have with Bosch, right? You have a lot of partners out there that you can leverage. Has that kind of been the starting point when you took the job, Axel, that, you know, I have these kind of locations. This is where there are some easy wins, and that is where I will start. Kind of. So I have inherited the entrepreneurship unit. It was not me creating all this government framework. Thankfully, most of it has been done before I even arrived, which is great because the company is on a higher maturity level, especially in the management and in the enabling functions like tax and finance and legal, et cetera.

23:23Then they knew what it takes to create an ideal setup and then they look for someone to run it. So they have created most of it before I even arrived, which is amazing. Then I had maybe to change like 20%. or detail out. And then I had the structure, the entrepreneurship unit. And that is good and bad at the same time because when I started, my first half of the year was a lot of restructuring, portfolio optimization, which is different when you start with a white sheet of paper. It could be quicker. But on the other hand, there are many things that I'm relying on still today. And that is, for example, the seven international hubs.

24:08They were already there when I started. Excellent. You know, you have been in your position roughly a year, right? Could you share some of the most important learnings that you have had so far from, you know, your expectations for taking the job and to where you are now? I can tell you what has been exactly as I hoped for and then some surprises. when I started interviewing for the position, I felt quickly that top management knows exactly what they're doing. And this was the main reason why I took the offer. And this is still true. Working with the top management is just a breeze because they have seen so much that didn't work that they know exactly now what works.

24:59And this is just amazing. So stakeholder management is great. And then the surprises potentially lie in areas that what I haven't expected, frankly, is like potential founders are scarce. I had hoped differently. What was also surprising is how large the entrepreneurship approach got. there was a portfolio of seven startups and how long it took to restructure it was almost my first year the first half year for sure and then it became less and less so I didn't I wasn't expecting that to be honest those are the surprises but the good stuff definitely outweighs everything well it's good to Yeah. So, Axel, just to wrap it all up around BOS Ventures before I ask some questions about yourself, right?

26:02What else should the listener and the viewer know about what you do when you do your venture building activities at BOS? If you're a founder out there and you really think you want to build hardware or deep tech, just don't start from scratch. you need defensible tech very quickly to get funded and it takes a long time to get to a defensible technology stack so either you start and bootstrap very early and you have the time but if you don't have it just be brave and start reaching out to corporates like us doesn't have to be us, that potentially have what you need, but it's not utilizing it. So in my company, there's so many assets that can be reutilized in a different market, in a different startup.

27:02You know, we have all this automotive technology like radar. It's amazing how much you can do with radar in other use cases. It's just amazing. but so when you're out there trying to build the next robotics or deep tech company, just reach out to people like me and see if we might be able to give you technology to cut down your journey by a year or two. And if you're a VC, believe in the learning curve of corporates. We have done the learning and we can do better. so give us a chance to be on the cap table to to be have a seat on the table because it's you're missing out on some of the best opportunities in europe nowadays if you don't work with the european corporates in the space of deep tech and hardware fully i'm fully aligned with you here actually i think the value creation that corporates can deliver is immense and specifically when you go into deep tech, right?

28:09All the expertise that is around the globe for your more than 400 ,000 colleagues is amazing, right? So I think, you know, definitely something that people should listen to, yeah. Axel, going into kind of the last rounds of questions, right? I think it's nice for the people listening in to learn a little bit about you and where you come from and kind of, you know, your personal experience and philosophies that have shaped, you know, how you are attacking the Bosch challenge? So I started as an entrepreneur. After college, I founded my first company, and I did so for about 18 years in Berlin, Germany, and also I spent six years in the Silicon Valley.

29:00Only after that, I got into the corporate space. So in my early 40s, I signed my first work contract with a corporate. There was PricewaterhouseCoopers. Yeah. And there I co-built the CVC of PricewaterhouseCoopers. So we were the only LP. We created an own CVC arm. I was about five years at PwC doing other things as well. LP investments out of and startup investments like strategic minorities from the PwC balance sheet, strategy work. And then I would try and push a year ago. So I have the founder and the corporate investor side. Yeah, and very relevant experience and also interesting to see a founder turned corporate, right?

29:56That's not that often you see that. But I think you've probably also understood all the great things that corporate life can actually support into the startup world? I'm trying to be the advocate of the founders, definitely, because I know how that is. It's all about the builders. Corporates are just enablers, like investors. I truly believe the builders are the founders, and they deserve most of the credit. What would you recommend so young people? You talked a little bit about entrepreneurs, what they can do in working with a corporate just like Bush. so if you were young today what advice would you wish you have gotten when you started your own startup career I mean there's all the good stuff like never give up but good founders or good entrepreneurial people they know it they have this calling this sense of urgency so I don't have to give advice in that direction to be very resilient etc it's just a basic hygiene factor you have to have to I think the most important thing is that success is not a destination but it is the way or the route is more important than the destination so in my life it was a zigzag between founder and corporate investor different industries different geographies and looking back I must say this is exactly what brought me to where I'm at now and I'm in a very happy place right now I believe the cookie cutter career or the cookie cutter innovation strategy or the cookie cutter way to create a successful startup doesn't exist finding your own way this is the most important part and in that believe in yourself and believe in your gut.

31:59Sometimes the truth does not lay in data or facts. Most of the time it does, but not always, but in your intuition. It's super nice to hear, Axel. Thank you for that. Maybe just rounding it up and we need to promote Bosch a little bit more. So if you are the skilled and multi-time entrepreneur, how do you actually apply to your program? Yes. So we have a website, of course, Bosch Business Innovations. We just ran a big camp last week in Berlin, bringing together founders with our technology experts in the space of carbon capturing. So we're doing this frequently, but if you don't see a program that is on the website, just approach me on LinkedIn and I'm happy to talk to you.

32:55Super. With those words, Axel and Dennis, thank you so much for joining us on the podcast. I hope everybody will listen through this a couple of times. There are so many great learnings in here. Thank you for sharing, Axel. Thanks.

33:15Tear down this wall. It's more than just an alliance. This is a union of values. Let's start acting.