IKEA Invests Heavily in CleanTech

IKEA Invests Heavily in Cleantech

Venture capital company IKEA GreenTech AB is investing heavily in cleantech. The company has so far invested EUR 12 million in four companies of a total of EUR 60 million allocated for investment.

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KEA GreenTech, a venture capital company within the IKEA Group, invested EUR 12 million between 2010 and 2012 in companies working with cleantech and in a venture capital fund that invests in cleantech.

The venture capital company’s mission is primarily to invest in technology companies that contribute to greater sustainability, both for the community in general and within IKEA’s business activities. IKEA GreenTech is wholly owned by the IKEA Group, which means that these investments not only provide an injection of money and external expertise, but also open an opportunity to work with the IKEA furniture warehouse chain.

All profits are returned to the fund to create a continuous influx of capital that can be used to make new investments.

“Our goal is to make investments that enable IKEA to offer innovative new products that help people to live a more sustainable life at home. After evaluating interesting ideas from over

700 companies, we selected the technologies that offer real potential in this area,” says Christian Ehrenborg, Managing Director, IKEA GreenTech.

IKEA GreenTech was founded in 2008 and focuses mostly on the Nordic countries and Europe. The company now plans to accelerate the process of identifying new investments that will help the IKEA Group to fulfill its new sustainability strategy, People & Planet Positive.

“We are selective. We only invest in products, designs, materials, or processes that contribute to IKEA’s commitment to sustainability,” adds Ehrenborg.

IKEA’s sustainability strategy includes challenging commitments that are designed to help millions of people to save energy and water, and to reduce their household waste. Moreover, the strategy also helps to make IKEA a more sustainable com pany. IKEA GreenTech is investigating opportunities throughout IKEA’s supply chain to support its strategy.

IKEA GreenTech’s Investment Criteria:

• Minimum 10% ownership

• Improved sustainability for IKEA business activities in combination with at least one other positive effect, normally cost savings

• Products that are ready to be introduced onto the market

• Primarily innovative technology, strong IPR and know-how

• A business idea with major international potential and a distinct go-to-market plan

• A strong and motivated management team

• Timing; the market need should exist now

• Possible to implement in IKEA business activities

• Realistic exit possibilities within, typically, 5-7 years, with a good return on investment

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Venture capital

Christian Ehrenborg MD IKEA Greentech AB

About IKEA GreenTech IKEA GreenTech AB is a corporate venture capital company that makes equity investments in green technology companies. Its mission is primarily to invest in technology-based companies that improve the sustainability of IKEA’s business activities. The company is owned by the IKEA Group. This ownership structure gives potential access to the global and well-renowned IKEA retail concept.

Companies invested in: Exibea AB (Sweden) A market-driven company that produces products for monitoring and regulating energy consumption.

Other Mountain Cleantech Fund II (Cleantech growth fund in Germany/Austria/Switzerland) El-Seed Corp. (LED technology, Japan)

BoFood AB (Sweden) This company develops and produces vegetable-based food products with a focus on healthier dietary habits and reduced environmental impact. One example of its products is the ice cream brand Lovice–ice cream made from soybeans. Today, soybeans are often used in animal feed. Using soybeans as a base means that cows are no longer needed for ice cream manufacture, eliminating one stage in the production process.

Alelion Batteries AB (Sweden) This company works to supply complete, modular, climatefriendly energy storage systems consisting of battery cells, a mechanical connection, and their guidance and control electronics, primarily based on Li-ion batteries, for trucks and other applications.

IKEA GrEEnTECh InvESTS In wATErlESS TExTIlE dyEInG SySTEm

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KEA GreenTech latest investment is in DyeCoo Textile Systems, a Dutch company that has developed the first commercially available waterless dyeing technology. Using recycled carbon dioxide (CO2), the technology avoids the large amount of water and chemicals used in traditional dyeing processes.

“DyeCoo’s waterless dyeing technology is a truly innovative system that could bring real environmental and costs benefits for the textile industry by reducing water and chemical use. Through the partnership, IKEA will help to speed up the development and availability of the technology,” says Christian Ehrenborg, Managing

Director, IKEA GreenTech AB.

The investment will support the delivery of the IKEA Group Sustainability Strategy, People & Planet Positive, which includes challenging commitments for IKEA to make its products, operations and supply chain more sustainable. The significant potential of the waterless dyeing process has also been recognised by the world’s leading apparel and footwear brand, NIKE, Inc. which invested in DyeCoo in 2012. Nike’s strategic partnerships group worked closely with IKEA GreenTech throughout the investment process. The textile industry is one of the largest consumers of water and most of the world’s textile suppliers are

located in Asia. The scale of the industry’s activity in the region can put pressure on the availability of clean water and contribute to environmental pollution in the discharges from manufacturing processes. By removing the need to use water in the dyeing process and eliminating the risk of effluent discharge, a known environmental hazard, the DyeCoo system could bring significant benefits to the region. The first range of machines developed and manufactured by DyeCoo are for waterless dyeing of polyester fabric. As well as helping to scale the processes for dyeing polyester, the partnership with IKEA will speed up the development of processes and machines for dyeing cotton.

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