Why Bosch’s €200 Million Venture Builder Isn’t About the P&L

Many corporate venture builders have already closed. Axel Deniz runs one of the few programs still operating, a model he calls the “un-corporate” venture builder, and he has a clear vision how to keep it from being shut down three years in.

Axel Deniz runs Bosch Business Innovations, the venture builder inside the industrial group, where he raised a €200 million fund from his parent company to build hard-tech startups.

The fund responds to a shift Axel describes at Bosch: the company long invested in technology ahead of demand, as it did with ABS and ESP, but in fields like hydrogen, solar and electrolyzers, that approach has paid off less predictably.

The next step was deciding what to promise the board in return. With €91 billion in group sales in 2025, even a startup that reached a billion euros in revenue would barely influence the P&L. So a very successful portfolio would make little material difference to group revenue. Revenue was the wrong thing to promise.

Therefore, Axel pitched the fund as a strategic tool for testing new markets, run with a financial investor’s discipline. The fund gives the company a capital-efficient way to test markets it has yet to enter, and after five years, a portfolio of stakes it can buy, move into a business unit, or keep.

For innovation leaders defending their own venture unit, the Bosch model offers a full setup to test against their own: the board pitch, the cap table, the incentives for each partner, and the three options the board chooses from after five years.

A McKinsey study ranks venture building among the most commonly expected strategic moves for 2027, yet many corporate venture builders in Europe and the US have already closed. Axel can only speculate about the difference between what companies plan and what they fund, but his guess is that, while many like the idea of venture building, they hold back the money it needs. Parts of Asia and Africa look different, with venture building growing fast. In Europe and the US, Axel says his unit is "one of the last ones standing”.

Staying alive depends on what a venture unit promises its board. At a company this large, the size of the parent shapes this promise. By Axel's estimate, the group would need 10 to 15 startups that reach unicorn status or a billion euros in revenue, before they can start mattering to its P&L. That’s far more than a €200 million fund can deliver, so Axel left revenue out of his case to the board for the fund.

The company’s ownership adds a second measure the fund would struggle to meet. A foundation owns the company and receives most of its dividends for charitable purposes, and the wishes of its founder, Robert Bosch, still guide decisions at the top. As a result, the group judges new businesses on their value to society as well as their profit. A portfolio of startups is far too small to move either measure at the scale the group does.

He reports to the chairman of the board and positions venture building as a strategic toolkit for what he calls “beyond markets”: markets the company has yet to enter. The startups provide the corporation with an early view of those markets in a capital-efficient way.

Axel’s view is that the unit only reaches that strategic goal by working like a financial investor. His team’s incentive depends on returning three times the money invested, the same kind of target corporate venture capital (CVC) funds use.

Both goals depend on the ideas behind each startup, and at Bosch, those start in the patent library.

Someone at Bosch writes a new patent roughly every 20 minutes, and the company has ranked first in German patent registrations for 19 years in a row. Axel's view is that much of that IP stays unused or underused, because only part of it makes it into a product. That’s why his program builds startups from the rest.

The unused patents at Bosch are just a part of a much larger opportunity. Axel estimates that corporate R&D labs worldwide hold around $60 trillion in value that companies have largely left untapped. University tech transfer already gets a lot of attention, with regulation and tax incentives built around it. In Axel’s view, the bigger prize sits inside corporations: putting all corporate IP to work would do far more for the global economy than putting all university IP to work.

Building startups from scratch also gives Axel more control than a corporate investor has. He previously ran the CVC at PwC, where a corporate investor depends on the deals that come to them. A venture builder, in contrast, makes the key choices itself: which founders to back, which technology to build on, and which region to build in. Because Axel controls all three, he can manage the people, technology, and market risks that come with early-stage startups.

The team starts by choosing fields to build in, through creating an investment thesis. Ideas for the thesis come from two places:

Axel plans to run up to five theses by 2030. Three are active today:

A fourth thesis, carbon capture, utilization and storage, has already been stopped.

With the fields set, the fund spreads its money across regions. Part of it goes to emerging markets in Africa, India, and Latin America, and China is a separate focus. Overall, the allocation is globally hedged, with a parallel mission to create impact in Germany, where the company has its headquarters.

Since the team picks the field and the region, it shapes each startup from day one.

Bosch Business Innovations is a separate company, but since the parent owns 100% of it, the unit itself sits inside the corporation. To give the startups more room, Axel built the structure in three layers:

Inside the SPVs, in Axel’s words, there is “simply no corporate drag.”

The founders come from outside Bosch. Axel’s stated aim is to become “the best place in the world to build hard tech ventures” for outside founders. He promises founders the freedom of starting on their own, while his own team links the startups to the group in two ways:

Each SPV needs a manager to run it day to day. Bosch Business Innovations wants managers who are willing to invest their own money, so they can win, or lose, along with the group. This type of “incentive alignment” is one of the biggest lessons venture building can learn from CVC, Axel says.

Axel scouted venture studios worldwide, firms that build startups for corporates, and gave each one an SPV to run for eight years. The corporation funds the SPV; the studio runs the venture building inside it, with freedom to operate within the theses and regions Axel’s team sets. Each studio also invests its own money in its SPV and earns a share of the profits, if the startups do well.

Because the contracts run for eight years, Axel looked for studios that would still be independent at the end of them.

Each of the four parties gains as the startups grow, through either a stake in them or a share of the profits:

A profit share for his own team meant paying them differently from the rest of the company, so Axel needed the board’s approval. To make the case, he convincingly argued that if his team were paid on different terms from the founders and studios, their goals would drift apart, and in his words, “it’s not going to work.”

When it comes to governance, the studio and Axel’s unit share control of each SPV equally, with the same number of seats on its board. When the two sides split on a board decision, an outside industry expert casts the deciding vote. That way, the studio has as much say as the corporation, even though it is far smaller.

In Axel’s experience, sharing both the money and the control helps both sides move past the attitude of “I’m the big corporate. You’re just a 300 people firm.” He wrote these principles into a five-page code of conduct that everyone involved can read.

Each startup eventually leaves the SPV as a company in its own right. Axel’s unit writes the first check, at the pre-seed stage, and is happy to lead that round - but from the seed round on, the founders raise money from outside investors themselves, just like any regular startup.

Axel’s unit stays in as an investor through those later rounds. It keeps pro rata rights in each new round, to keep its share from shrinking.

Axel expects to start around 70 startups across the fund and to see 20 to 25 of them survive, in line with the program’s target of more than 20 hard tech spin-offs by 2030. Throughout the five-year investment period, the company holds a board seat in each startup, so after five years, in Axel’s words, “we know something about these companies”. Some startups will keep building on the group’s technology. Others may move away from it. Axel is comfortable with both.

At the end of the investment period, Axel can bring the board stakes of 10, 20, or 30% in each startup and ask what the company wants to do with them. The size of each stake depends on how much the unit has invested in later rounds through its pro rata rights. He describes this as “creating options”: a portfolio of 20-plus startups the company can review in five years, when some of those markets may have become strategic for it. He sees three ways to use each stake:

Many corporate venture builders in Europe and the US have closed, in Axel’s guess because their parent companies held back the funding they needed. Axel secured €200 million at Bosch by pairing a strategic purpose with an investor’s discipline: a tool for testing new markets, held to a target of three times the money invested.

Bosch’s model gives the board a clear decision point. Around 2030, the program aims to have more than 20 hard tech spin-offs, and the board will decide what to do with each stake. If the model holds through that review, it will give other corporations a working example of a venture builder funded on strategic learning and returns.

For innovation leaders running a venture unit of their own, the Bosch case puts the focus on day one: what the unit promises the board, and whether a portfolio of its size can actually deliver it.