Heavy equipment manufacturer CNH Industrial has a long history of mergers and acquisitions, sometimes overseeing legendary brands like Ferrari. But five years ago, when agritech was booming, the global giant was struggling to break into the startup market.
The conglomerate turned to a ritzy Italian businessman named Michele Lombardi, one of its longest-serving executives.
Lombardi came up through CNH’s business development group, where he was part of what he describes as a “black belt team” that built corporate alliances at the highest levels. When the company came to him with this new job in 2019, he was essentially starting a new chapter “from scratch.”
“They were in a bind and couldn’t build a pipeline of successful deals,” Lombardi told TechCrunch. “When we started, we found that our reach was very limited. We didn’t have a network.”
How do you make one? Just start talking, Lombardi explained. In particular, he knew that many companies would be looking for an outlet to invest in startups that are building things like autonomous farm equipment or precision agriculture data.
That conversation led to more connections, and in just a few years his team grew to about 14 people today, building a missing pipeline to meet interesting startups and founders.
The work has resulted in 12 transactions over the past five years, split between six acquisitions and six mostly minority investments. They cover a wide range of technology areas, from farm management software to AI-based drone imaging, satellite navigation, and even a tractor company.
The Lombardi team’s success comes at a time when venture capital in agtech, like many other sectors, has been challenging. According to PitchBook data, valuations, total funding, and exits have all declined from their highs of a few years ago.
This drought has presented a fertile ground for companies like CNH, which has engaged in a kind of investment and acquisition race as they seek to monopolize the market for new technologies.
“It’s actually a great time” to be involved in corporate venture capital, he said. “It’s a time when you can really help, really come in and be a good partner. There’s a ton of opportunity, a lot of entrepreneurs who are concerned, and it’s a great time to find good ideas that can be cheaper.”
Lombardi said the agtech sector, like other industries, went through a “euphoria phase” three or four years ago, which led to “overhyped” assessments.
“This downturn is going to be painful, but it’s going to clear the landscape of investors who don’t have the knowledge and experience in this space, and startups that never had a well-articulated idea or a competitive advantage that would make them sustainable businesses,” he said. “The overall landscape is going to be much, much stronger. And I think it’s going to be great to be in that space with the experience that we’ve developed during this period.”
The career he built
Lombardi leveraged 20 years of experience running various divisions of a multinational company's extensive agricultural and construction equipment business to build the network.
He joined the company at a time when it was undergoing a massive restructuring that involved the merger of Case and New Holland (hence the modern name). His early years were spent in CNH’s business development group in Italy, which he described as a holding company sitting on a vast cornucopia of companies that included Fiat, Ferrari and even newspapers.
Over the next two decades, he managed parts of CNH’s operations in Switzerland, Thailand, China, Australia and New Zealand. In each position, Lombardi acquired new skills. While in Thailand, for example, he oversaw the conglomerate’s entire Southeast Asian operations as it grew from a $40 million business to a $400 million business.
That extensive experience has had a direct impact on the work he has done since he was “sent back” to Chicago in 2019 to lead CNH’s investment and M&A team.
On the investment side, Lombardi highlights a key difference between running a VC and a corporate venture shop. “Our job is not to just invest and make money,” he explains, shifting slightly from side to side at his standing desk. “My perspective is different. I invest in companies when I think they can accelerate their technology roadmap.”
Lombardi can focus less on profits, as CNH has made about $20 billion a year over the past three years. That allows him to be more strategic about who his team gives money to, a luxury other investors may not have, especially as money markets dry up.
On the M&A side, Lombardi says he likes to bring in people from all over CNH when evaluating startups. He has people who say, “Yes, I like that tech team, I like their solution, I like the product, and I think it’s going to be transformative for our industry.”
Lombardi says his team often goes beyond investments and M&A to maximize CNH’s capabilities, and he uses the company’s global reach to track developments in all sorts of different markets.
“We map existing startups at different maturity levels, and we reach out to entrepreneurs voluntarily, chat with them, and understand what they’re doing before advisors come to us and pitch something,” he said. “We often create collaboration opportunities that don’t lead to investments, but help startups, help industries around us grow more confidently, and educate us.”
Lombardi likes to make eye contact with these entrepreneurs, so he prefers to meet in person or via video call whenever possible. Lombardi says that making eye contact with someone and seeing how they answer questions can help you gauge whether they’re someone you’d like to work with.
“I learn more from it than from the speech,” he muses. “Entrepreneurs are very, very good at giving me 10-minute speeches. I don't care about that. I can sell you anything. It's not what I want. I'm not going to learn anything from it. I don't understand how I can help.”
He added that it's more important to look at the person, to see how they react, whether they open up and show vulnerability.
“And that gives me a sense of whether I want to spend more time with that person or not,” he said. “That’s really important. And there are a lot of people out there, right? So how do I choose? I choose between what I see as intelligence and how ready they are to collaborate.”
