In this conversation, BRV’s Bhawana Wadhwani sits down with Adam Jackson, a Partner at Bosch Ventures.
Bhawana: Let’s start with the landscape. Bosch Ventures invests in deep tech. What kinds of companies are you looking at right now? It feels like the conversation has moved from AI to physical AI and hardware.
Adam: My last company was a robotics company called Asylon, so robotics and physical AI are close to my heart. We’re also interested in enterprise AI and quantum computing, and we do a small amount of healthcare diagnostics, but most of what we’re looking to close this year is some form of AI solution for the enterprise or industrial side. That range goes all the way up to cybersecurity. I’ve been mostly doing hardware investing since about 2017, so it’s interesting to watch the market swing toward it. But we’re not leaning into hardware any more heavily than we have throughout the history of Bosch Ventures, which was founded in 2007. I think a lot of investors don’t truly understand how difficult hardware is to get right and to deploy. We don’t do biotech, pharmaceuticals, treatments, space or fintech, but anything that hits that industrial space is interesting for us.
Bhawana: Is there an enterprise AI company you’ve invested in over the past year? I imagine landing enterprise customers is hard.
Adam: The most recent one we did is Blitzy here in Boston, which does AI for code modernization. They’re doing quite well. People think enterprise AI is hard to adopt, but it’s much more difficult to get physical AI and robotics into an industrial setting than it is to get a large organization to adopt software. Adoption cycles can be long, and you can get stuck in what I call POC purgatory. But the products that really add value get adopted much faster than you’d imagine, and we’re seeing very high growth in those companies.
Bhawana: One of the first things I noticed on your profile was Whoop. Wearables used to be considered a hard business because you sell the device once and that’s it. What made you believe in Whoop?
Adam: I did Whoop out of a previous fund, and it was well before they moved to a subscription model. A lot of people told me not to make the investment. We had sleep experts on staff who said people weren’t going to wear things to sleep, and that everything would eventually be contactless. It really came down to a fantastic management team with a vision and real dedication. I’m also a big fan of health data. It was clear that accurate rest and recovery data was missing from what consumers were getting. We had activity and step data, but not true strain and recovery data. And when they decided to move to a subscription model, everyone was worried because nobody had done it before. They nailed it.
Bhawana: So the opportunity was sleep data, for strain management?
Adam: It was beyond sleep. Consumers thought they were getting sleep data from Fitbits and similar devices, but the data was very poor. What Whoop was cracking was accurate HRV, heart rate variability, which is extremely hard to measure. That feeds into sleep, rest and recovery, your parasympathetic nervous system, and more. The research on HRV was there, but getting it into a consumer product is very difficult. I thought the form factor and methodology they landed on were the right ones.
Bhawana: Did you physically test the product before investing?
Adam: We were very early at Whoop, in 2018 or 2019. For a consumer product, form factor is pretty much all that matters. When I make an investment, I get into extremely detailed due diligence. At Whoop, I was comparing their data against clinical-grade HRV data. It goes pretty deep.
Bhawana: I also saw that you sit on boards for some companies. What’s that experience like, and how is it different from being just an investor?
Adam: If you make a large investment, you want a board seat. We wouldn’t say we require one, but we definitely prefer it. I’ve sat on thirty-some boards in my career. It’s two different hats. As a board member you’re responsible to every shareholder in the company, and as an investor you’re responsible to your LPs. We’re pretty active. We often sit on compensation and audit committees, help hire key management, and think about strategy. If you’re not going to be an active board member, you shouldn’t be on the board.
Bhawana: Let’s talk about JetCool. You invested in 2023, before AI was as big as it is now. What drew you to it, and how did you find it?
Adam: Most deals come through the personal network you build over your career, and I sourced that one. We invested before the AI boom and before everyone was looking at data center cooling. But it was already clear that air cooling had reached its limits. Even without AI, CPUs and GPUs were getting hotter, and cooling them with air was getting less and less efficient. At that point liquid cooling was only used at the very high end or in home applications, so we saw an opening. We did heavy competitive diligence, and the team and JetCool’s methodology really impressed us. Then AI hit after our investment, which obviously helped an enormous amount. We sold the company about eleven months later, so it was a wild ride.
Bhawana: How do you weigh the team against the idea?
Adam: The team is everything. I’d say the team is 90%. Some people would probably say more.
Bhawana: I wanted to ask about Via, which I believe is still an active investment in the security space.
Adam: Via is a great example of a brilliant management team. Kate and Colin are exceptional. They had revenue before we joined, and they’re one of the few companies I think has figured out how to monetize blockchain outside of crypto. They use blockchain as a means to an end for what is really a cybersecurity and data-in-motion company. The technology is by far the best in the market. Syndicate strength is also very important to us, so we liked that there were strong investors around the table and a strong board.
Bhawana: Are there investments you regret passing on?
Adam: We keep what’s called an anti-portfolio, the deals you passed on. Any VC who says they don’t have one is lying. You can’t do every deal, and at the end of the day we’re trying to predict the future, which is never accurate. There are companies I passed on that I would have liked to do, and companies I came into in later rounds that I wish I’d gotten into earlier. You can’t do venture capital without a list of deals you wish you’d done.
Bhawana: And do you have a favorite investment?
Adam: I don’t know that I have one. I really like our current portfolio. Early in my career I was at a company called OnMobile that we took public in India, which was a wild ride. But I invest in teams, and I’ve worked with a lot of good ones. Some have made more money than others, and there are some I’ve hated in hindsight, but I don’t discuss those names.
Bhawana: On a personal note, what drew you to venture capital?
Adam: I fell into it by mistake. I get asked this a lot, and I tell people not to go into venture if you haven’t done a startup. I had been coding in college and had done some entrepreneurial work, and I kind of fell into venture. It doesn’t make a lot of sense to go into it without operational experience at a startup. You can certainly give it a shot, but the successful VCs have usually been operationally exposed to one.
Bhawana: You mentioned areas you don’t invest in, like space. Is there a reason?
Adam: It’s just not one of our focus areas. You can’t focus on everything. I know it is for some firms, but I don’t think we have the knowledge or the team for it. We’re also a single-LP fund, and that LP is less interested in it. At some point you have to narrow down, so we took those areas out.
Bhawana: How do you keep up with the areas you focus on?
Adam: It’s all of the above. You attend every industry conference you can, I read the Wall Street Journal front to back every day, and I listen to the usual podcasts. But nothing is the end-all, be-all. The best way to stay current is talking to startups. I probably spoke with twenty new ones this week. I may not invest in any of them, but what you learn from those conversations beats any podcast or periodical.
Bhawana: Thank you, have a great day!
Adam: You too, thanks.