The top 25: Sue Siegel, GE Ventures
After her promotion to chief innovation officer at US-based General Electric as well as her existing role as CEO of its corporate venturing unit, GE Ventures, one peer of Sue Siegel described it as having the responsibility for the company’s survival.
This might be too much credit but reflects her high regard both inside and outside the company.
Siegel now reports directly to John Flannery, GE’s chairman and CEO, the company said. Siegel’s role as CIO includes being a member of the company’s capital allocation and portfolio management governance and helping it grow, incubate and accelerate horizontal, adjacent and transformational businesses.
Flannery said: “Sue combines operational excellence with an entrepreneurial mindset to identify and unlock new value for GE. Her ability to spot new market opportunities, develop new business models, partner with the entrepreneurial ecosystem and help her make market-backed capital allocation decisions has made GE stronger.”
Siegel herself joined GE from venture capital firm Mohr Davidow Ventures along with partners Marianne Wu and Alex De Winter.
Siegel’s background was in healthcare investing for Mohr Davidow from 2007 and a career in the industry stretching back 30 years to 1985 at chemicals company DuPont and Bio-Rad Laboratories, then later as president of both Affymetrix and Amersham (acquired by GE) and before that as a student in Boston and Puerto Rico.
This was a time at the dawn of medical genetics and biotech industries and venture investing, Kleiner Perkins Caufield & Byers having become the first VC firm to set up a life sciences group a year earlier, in 1984, after it backed the first biotech company, Genentech, founded in 1976.
This outsider perspective has been important in her value to GE. Her former CEO of GE, Jeff Immelt, at the end of November at Healthegy’s annual Digital Healthcare Innovation Summit when he said of CVC: “I would say most of us have stunk at it, really for a long time. We have been company killers.
“She [Siegel] really trained us on how bad we were.”
And while part of the solution was in having a leadership team that comes from the venture capital world and knows how to work with startups, as Immelt said, the second step is delivering on the opportunities created by the changes in the innovation landscape to drive GE’s future.
“The pace of change will never be as slow as it is today.” Such were the words of Sue Siegel, chief innovation officer (CIO) at GE and CEO of GE Ventures, who was co-chairwoman of the third annual Global Corporate Venturing and Innovation (GCVI) Summit, which hit a new record high this year, with close to 700 attendees from 350 companies with aggregate annual revenues of $6 trillion and nearly $200bn in venture assets under management gathered for the two-day event in Monterey, California.
“Change is going so fast,” she added. “If you think of it, today is as slow as it is going to get; in the future, you will see the current time as slow, which means things are only going to accelerate – which is a scary perspective. We already feel how tumultuous everything is, and how we struggle to keep up with all of technologies. And yet things are only going to get faster.
“What this means from a CVC point of view, is that we cannot get complacent. We need to continue challenging ourselves.”
GE Ventures’ five main units are equity investing, which invests in and partners startups, GE Licensing, New Business Creation, Healthymagination and Catalyst, its new early-market development discipline. Under Siegel, GE Ventures has become the primary unit backing earlier-stage entrepreneurs, and she nominated a few from her team.
Siegel remarked at the Global Corporate Venturing & Innovation Summit in California last year: “We earn our stripes by being engaged in corporate strategy for our business units, educating on new business models, emerging technology trends, and working to always sense emerging trends.
“We have helped do this through the infusion of talent from the VC and entrepreneurial world. These are among a few things that we have done, and yet there is much more to do both internally and externally.”
Now, the sights and tools able to be used have broadened. In a GCV profile published in March 2016, Siegel referred to the GE Ventures platform as a business toolkit – a multi-pronged approach aimed at accessing innovation. This toolkit consists of traditional corporate venture capital investing, new business creation, licensing and early market development practices.
Siegel said for her Powerlist 2017 profile that five new businesses had been created over the prior 18 months through New Business Creation, a practice area led by Risa Stack. Last year alone saw new business launches for Avitas Systems and Drawbridge Health and the series A round for Vineti.
Avitas Systems, which uses predictive data analytics, robotics, and artificial intelligence to deliver advanced inspection services to the oil and gas, transportation, and energy industries signed a partnership with gaming chips developer Nvidia – an example of a wider trend for GE Ventures to partner portfolio companies with commercial engagements.
GE said half of “GE Ventures portfolio companies have a commercial engagement with our business units. As strategic investors we ensure strong alignment with the business units and ensure that our portfolio helping GE industrialise innovation.”
Other examples from the past year included Upskill, which received backing from GE Ventures, and started working with Glass (formerly Google Glass) and GE Aviation to build an augmented reality (AR) service that connects a smart torque to perfect all of the steps in building a jet engine that require tightening nuts.
Add to this toolkit Catalyst, an early-market development practice that put in place “a discipline that helps identify and develop collaborations with leading science entrepreneurs creating breakthroughs that are market disruptors and could be the next big thing”, as Siegel said.
Siegel also pointed to the Healthymagination platform, which works on catalysing solutions for major global health challenges. The HealthyCities initiative and brain health efforts are two examples.
She was recognised in Fortune’s list of 34 Leaders Who Are Changing Healthcare and was named one of the Top 50 Most Powerful Women by the California Diversity Council. Outside of co-chairing the GCVI Summit, her leadership positions at conferences have been focused on healthcare, including Harvard Partners’ Healthcare Innovation Advisory Board, the Scientific Advisory Board of Brigham and Women’s Hospital, Stanford Medicine Board of Fellows, University of California’s Innovation Council and USC’s Schaeffer Centre for Health Policy and Marshall School of Business Board of Leaders.
Siegel added that “as a CVC, we are being asked to expand our focus to move beyond the role of tech scout and equity investor” in the quest for future growth. She affirmed that “GE Ventures has expanded GE’s access to the innovation ecosystem, its technologies, new business models and practices, and the incredible entrepreneurs that power them”.
GE Ventures has set up its Edge program under Lisa Coca, managing director of corporate venture investments and commercial development, to provide what Siegel said was support for “our portfolio companies through what we can bring to their growth and development by providing access to our research and development experts, our distribution channels, our worldwide footprint and our regulatory and policy expertise”.
Siegel added: “We have really fuelled this effort by also offering leadership educational programs at our Crotonville campus, with a curriculum ranging from leadership skills and hiring to marketing and the art of storytelling, geared at enhancing entrepreneurs’ development.”
Corporate venture capital investments “aimed at transforming industries and generating meaningful returns might require more capital or global access than a financial VC might be interested in doing”.
Siegel also emphasised the importance of collaboration among players in the field. “Corporates understand that innovation is broad and diverse, and that we cannot do it alone. Partnerships are key and GE welcomes partners in the growth journey.”
At the time of the May 2017 profile, GE Ventures had inked more than 100 equity deals, and technology and commercial collaborations across its five focus areas – software and analytics, healthcare, energy, advanced manufacturing and corporate productivity and operational efficiencies. GE Ventures last year alone added 22 new companies to the portfolio and made 47 follow-on investments in existing portfolio companies. In aggregate these deals went from seed, right through to D and E rounds and across all of GE Ventures’ focus areas, including software, energy, healthcare, advanced manufacturing and enterprise, and involved more than 200 new and existing co-investors.
In terms of investment trends, Siegel said for Powerlist 2016 profile: “Everything is going digital in every industry. Everything will be connected via the cloud. Data is the new currency. Business models that are established in the tech vertical will be widespread into other verticals such as healthcare, energy and in oil and gas, to name just a few.”
GE Ventures, however, has not been directly responsible for all investments since inception. In 2013, the company invested $104m in Pivotal, a spinout of data services provider EMC/VMWare, in return for a 10% stake.
That deal was made by the GE software centre’s business development team and, according to an unnamed insider, “since it was such a large deal, it is not considered GE Ventures for the purpose of budget, but it went through the same channels”. Pivotal floated on the New York Stock Exchange at its midpoint of $15 per share, which allowed Pivotal to raise $555m at a market capitalisation of more than $3bn. GE Ventures itself said it had five exits last year, including the sale of low-power semiconductor maker Arctic Sand Technologies to Murata Manufacturing’s US subsidiary, Peregrine Semiconductor, for $68m in March. GE had earlier announced it would acquire Bit Stew Systems for $168m at the end of 2016.
GE Ventures, therefore, is increasingly seen as an effective tool to drive the innovation and growth inside the parent. As Siegel, who has also joined the board of directors at Nasdaq-listed Align Technology and at The Engine, MIT’s new startup accelerator, said in a speech at the GCV Rising Stars awards in Sonoma, California, in January 2016: “GE has given us, the GE Ventures team, a chance. We had to earn our place in the fabric of the company, and we have to keep doing that every day.”