CNH Industrial, a major heavy equipment manufacturer, faced challenges in tapping into the startup scene despite its history of mergers and acquisitions. To overcome this, the company turned to Michele Lombardi, one of its longest-serving executives and a seasoned businessman. Lombardi, heading a team of 14 employees, focused on building connections with venture capital firms, knowing that many of them were seeking exits for their investments in agtech startups.
Through these conversations, Lombardi and his team were able to establish a robust pipeline of startups and founders. Over the past five years, they have successfully completed 12 deals, including both acquisitions and minority investments. These deals covered a wide range of technologies, from farm management software and AI-powered drone imaging to satellite navigation and tractor companies.
The success of Lombardi’s team comes at a time when venture investment in agtech has been on the decline. However, this has created opportunities for companies like CNH to invest in and acquire new technologies. Lombardi believes that this downturn will ultimately strengthen the agtech landscape by removing investors and startups that lack the necessary knowledge and experience.
Lombardi’s extensive experience at CNH has been instrumental in building his network. Having worked in various arms of the company’s agriculture and construction equipment business across different countries, he has gained valuable insights and skills. Since 2019, Lombardi has been leading CNH’s investment and M&A team, focusing on investments that align with the company’s technological roadmap.
Unlike traditional venture capitalists, Lombardi’s role is not solely focused on financial returns. With CNH’s consistent revenue of around $20 billion per year, he has the freedom to prioritize strategic investments that can accelerate the company’s technological advancements. On the M&A side, Lombardi emphasizes the importance of involving employees from different departments in the evaluation process. Their input helps determine if a startup’s technology and product can make a significant impact in the industry.
In addition to investments and acquisitions, Lombardi’s team actively engages with startups to foster collaboration and industry development. They reach out to entrepreneurs, build collaborative opportunities, and offer support even if it doesn’t lead to a financial investment. Lombardi values face-to-face or video interactions with entrepreneurs, as it allows him to assess their character, reactions, and willingness to collaborate.
For Lombardi, selecting the right entrepreneurs to work with goes beyond the surface-level pitch. He looks for their smarts, their openness, and their readiness to collaborate. By observing their responses and vulnerabilities, Lombardi can determine if he wants to establish a long-term partnership.
In summary, Lombardi’s leadership has been instrumental in CNH’s success in the startup and agtech landscape. By leveraging his experience, building strong networks, and prioritizing strategic investments, Lombardi has positioned CNH as a key player in the industry. The company’s ability to adapt and navigate the evolving agtech market will contribute to its growth and success in the years to come.