It can be said you’re never more than 10 feet away from a 3M Co. product.
That distance is growing smaller as 3M Ventures, the venture capital arm of the Maplewood-based manufacturer, adds about a dozen companies to its portfolio every year.
Since its founding in 2008, 3M Ventures has invested an estimated $100 million into more than 30 new and emerging companies, according to Global Corporate Venturing. Rather than simply acquiring these startups outright, venture capital investing allows 3M (NYSE: MMM) to get early insight into whether a company will be successful or not.
And unlike many venture capital firms, which aim to invest in high-growth companies with the potential to turn into the next billion-dollar unicorn, 3M Ventures has a much more specific focus — tapping into outside innovation that's so vital for a 119-year-old conglomeratewith over $32 billion in sales and 26 business lines.
Ben Wright, vice president and leader of 3M Ventures, said the strategy for his 15-person team becomes fairly nuanced below the surface.
“We're investing in things that are strategically aligned with 3M and where we think we can add strategic value,” Wright said. “Meaning, we can add value to the startup and help it grow faster, and that startup gives 3M some capability or strategic value that we wouldn't have.”
Take, for example, Eko Health, a startup specializing in digital stethoscopes.
3M's Littmann stethoscope has remained an analog technology since 3M acquired the ubiquitous doctor’s accessory in 1967. That was until 3M Ventures joined a $20 million Series B round of fundraising for Oakland, Calif.-based Eko in 2019.
A year later, Eko announced it would incorporate its software and AI algorithms into Littmann stethoscopes with the debut of the 3M Littmann Core Digital Stethoscope. The Bluetooth-connected stethoscope allows doctors the ability to listen to their patients by using noise cancelling headphones, leveraging Eko’s machine learning to diagnose heart conditions.
Another 3M Ventures portfolio company, Pittsburgh-based Airviz, gave 3M its first foothold in the smart-home sector. That partnership led to a line of Bluetooth-connected Filtrete air filters that monitor air quality in real time and send the readings to a homeowner’s phone.
In 2019, 3M Ventures' partnerships led to over $6 million in annual sales for the company, according to Global Corporate Venturing. The most recent figure is kept under wraps, but Wright said it's now significantly higher.
The Searcher
Wright’s foundational leadership experience came as a scout attack helicopter pilot during an eight-year career in the U.S. Army.
The United States Military Academy graduate said it’s not a stretch to compare his previous combat experience over multiple deployments to his current role leading 3M Ventures. “There's a lot of similarities between the two because you're scouting for what's ahead — just in a different way. It's all about setting priorities and trying to drive towards goals.”
Since taking the lead of 3M Ventures in 2017, Wright said corporate venturing is gaining ground after being looked down upon, either because startups thought corporations would steal their ideas or because they’d impose onerous deal terms.
“There’s a lot more of a partnership attitude, because nowadays, you have to move at the speed the disruption is happening,” he said.
For 3M Ventures’ portfolio companies, that partnership can come in several ways. After it's made an investment, 3M Ventures generally takes observer board seats to help influence the company towards success. That's balanced with trying not to squeeze a startup with too much oversight.
“We try to help be the gatekeeper a little bit, to make sure that the startups are not being overwhelmed by love,” Wright said.
Advancing the local startup scene
With a global mandate that’s put 3M investments in companies based from Berkeley to Berlin, Wright is still an active player in the Twin Cities’ startup ecosystem.
3M is a longtime sponsor of Beta.MN’s Twin Cities Startup Week, and last month, Wright was named to the board of advisers for Launch Minnesota, a state program that provides grants and mentorship to early-stage entrepreneurs.
Wright said being on Launch Minnesota’s board will help bridge a gap between the Twin Cities’ Fortune 500 companies and the region'saccelerating startup sector.
“These are companies that startups would love to have access to,” Wright said, mentioning Target Corp. and Cargill Inc. as examples. Each of those companies also invests in startups. Target does so with a retail accelerator program, while Cargill has its own corporate venture division.
Mary Grove, a partner at Bread and Butter Ventures, a Minneapolis-based venture capital firm, said if Minnesota’s competitive advantage is leveraged to benefit entrepreneurs, the Twin Cities could be one of the strongest startup communities anywhere.
“3M has been super active and forward leaning, and they are a great model of what's possible,” Grove wrote in an email. “I'm hopeful that we'll see more of this work replicated across the business community here.”
