In search of the next "Big Thing"

2019-06-25 – Trendspotter KION Invest is on a mission to support startups in areas where both partners can learn and benefit from one another. This type of strategic partnership is usually more successful than a purely financial investment since established companies such as the KION Group have strengths that are much sought after by startups

Daring to try out new ideas, not shying away from being disruptive and the ability to act quickly are just some of the ways how startups challenge established companies. But often these startups must contend with the same issues: they lack a sales network and the capacity to implement their idea on a large scale. “Many startups reach their limits once they have developed their technology,” says Christian Bartl, Senior Director at KION Invest. There is little truth – if any at all – in the idea that startups and established players must be rivals. At a certain point, both parties can benefit from each other. “After all, KION does bring a little experience to the table,” Bartl says jokingly. “We have industry expertise, access to the market and our own warehouses and test facilities where prototypes can be transformed into marketable business models.”

Central point of contact for startups

It is why the KION Group created KION Invest in early 2019 as a central point of contact for interested startups. The team is also continually monitoring the market looking out for interesting ideas, and there are no real surprises on Bartl’s list of particularly relevant areas: the industrial internet of things, artificial intelligence, automation, augmented virtual reality, blockchain technology; all these trends are well known as future technologies in the world of intralogistics. “Being able to combine these areas is very exciting. One example might be an intelligent locating system for individual trucks on the premises, combined with artificial intelligence or big data analysis. This is where the journey to the future begins,” Bartl says. This is exactly where startups excel – challenging established processes or using their innovative ideas to achieve a breakthrough.

“The KION Group has already worked with startups, of course,” Bartl adds. Linde Material Handling was so impressed by Comnovo that it bought the Dortmund-based startup in 2017. The founders now work for LMH, providing creative ideas and Comnovo’s collision avoidance technology has now been implemented as the Linde Safety Guard assistance system. The system looks around corners or through walls and slows trucks down, if necessary, to avoid collisions with pedestrians. “This is an example of combining a startup’s innovative strength with expert market validation to create something entirely new,” says Bartl. For him, the most important thing is that both parties benefit in the end. To achieve this, the collaboration must have clearly defined milestones: use cases are defined first and then the pilot projects are set up. The outcome could be a strategic partnership, or the possibility of an equity investment might be considered.

Bringing together the best of both worlds

“We want to learn from the startup but the startup should be allowed to learn from us as well. This concept can sometimes be hard to accept for an established company with an ‘old school’ engineering mentality,” Bartl explains. No surprise, then, that the question of how to handle this new world of startups has been a key concern for the intralogistics industry the last few years. Monitor them? Support them? Invest in them? “For us, it’s important to combine the best of both worlds by taking a long-term, strategic view of our partnerships. The way we work together often gives an indication of whether it makes sense to acquire a stake,” he says.

That is why the term ‘invest’ in the team name should be understood in the wider sense: Capital investment certainly plays its part, but the preference is to invest time and capacity into establishing what Bartl calls “a strong – and the right type of – partnership”. He is particularly seeking startups that have reached a specific point in their development and have createad a marketable product. He has also identified trends in areas where startups are prominent, in asset tracking, i.e. locating objects in a warehouse based on their location data and movement data. This allows for processes to be analyzed or routes to be improved: “New insights which customers can use to optimize their warehouses,” says Bartl.

What’s ahead?

Bartl joined KION in 2011 and has experienced “an exciting period”, including the IPO and the acquisition of Dematic. While working in the strategy team, he was always asking himself, “What’s next?”, “How can KION evolve over the coming years?” and “How can KION play a key role in the digital future?” It was questions such as these that led him to suggest setting up KION Invest. “We are in the process of establishing our network, both internally and externally, but we are also actively on the lookout for interesting startups,” notes Bartl, who has a degree in business administration. Trade fairs and universities have proven to be good hunting grounds, as have government agencies. “Sweden and Israel are very keen to promote local startups,” he adds. He currently has two further members on his team who are also involved in identifying potential partners and expanding the network.

“We are still very much focused on Europe, but beginning this summer, we also want to look at Asia,” Bartl says. Innovative ideas can be found around the world, as can interested customers. The goal is to develop ideas that provide the perfect answer to a customer challenge. “KION has a few customers who are open to testing new ideas. We do have somewhat of a reputation as an innovator, after all,” he smiles.