Created by David Thompson

When a multinational consumer products company needs something like sustainable packaging for its products, what does it do? It pours millions of dollars into developing it. But then what? It may be a giant, but it doesn't want to be in the packaging business. It's got its hands full with consumer products.

The answer is Innventure. The company commercializes technology developed by multinationals in businesses they don't want to be in—even though they need the technology that came from their own R&D lab.

Supporting Multinationals in Developing Their Untapped Technologies

Multinationals are looking for certain things they need, and if they can't find them, they'll devote R&D dollars to develop them. However, it doesn't mean they want to commercialize the product, or that they're the right ones to do that. They simply want access to the end product, and Innventure steps in to create a business around that technology and bring it to market.

"The common theme of all of the companies we have is that they're all what I would call 'industrial B2B technologies,'" Innventure Chief Growth Officer Roland Austrup explained. "So, we're not software, we're not health care, we're not B2C, we're not business to consumer, we're business to business. So it tends to be industrial technologies where you can have real growth and productivity improvement for industrial companies."

Innventure looks for areas where the team can create an economic value proposition by improving and transforming technologies to help a multinational improve its bottom line. The company has created four companies so far. One offers polypropylene recycling, while another provides sustainable packaging. The third does data center cooling, and the fourth is a mixed plastics recycling company.

Unearthing Marketable Technology

Not every technology developed by a multinational is worth turning into a company. Invennture uses its Down-Select model to identify which technologies will likely become big businesses. They start with an opportunity screen, considering whether the total addressable market is large enough that it will enable them to create a company with an enterprise value of at least $1 billion.

Next, the Innventure team wants to see a unique, transformative solution that has a sizable moat around it. They also go through a technical validation to make sure the technology is developed beyond the proof of concept. Innventure doesn't take on any technology risk; instead, targeting a developed patent portfolio and only accepts scaling risk.

"So, if modular technologies have been proven to a certain scale, we want to know that all we have to do—if it's modular, we know we just have to stack it on top, we can scale it very easily," Austrup said. "If there's unknown scaling risks, we'll probably shy away from it, meaning if the science isn't proven, we have to know that we can scale it, and so we really want to just be down to the execution of a scaling risk and not have the technology risk."

The Quantifiable Value Proposition

Next, Innventure wants to ensure there's a quantifiable value proposition with the technology. So if they build an industry around it, they want to look at the supply chain and whether they will disrupt that supply chain if they become a major buyer for it. They also look at their margins and whether there's an economic value proposition that will compel adoption from the very first day.

"Meaning is it going to generate new revenue or save dollars for the customer and have enough margin left over for us," Austrup added. "We have to make money, they have to make money. If it's a nice-to-have but there's no economic value proposition, that's not enough for us to get behind a technology."

Finally, they want the multinational partner to want the technology or be a channel to the market so that they can introduce Innventure to the marketplace or initial customers.

Momentum for the Future

Innventure is starting to gain momentum. According to Austrup, investors are starting to understand both their operating story in one of their companies and their conglomerate model in Innventure. He said they're finally starting to see their "aha moment."

"People are understanding this model and that brings a steadiness to it," Austrup said. "But there's a constant entrepreneurial-ness to it: we're always seeing cutting-edge innovation. It's like going to a TED conference every day because you're seeing what's at the forefront of innovation when you're looking at the types of R&D that we see at major multinationals. It's a really exciting place to be right now and I would say that all of our employees are kind of on cloud nine all the time because it's always exciting."