The boom in corporate venturing over the past few years has been fascinating to watch. The number of companies we have tracked doing corporate venturing globally has risen by nearly 30% to more than 900 since we started publishing in mid-2010.
This fast whirring economic activity impressed many attendees, including myself, at the International Business Forum’s Corporate Venturing and Innovation Partnering conference in Newport Beach, California. Of course, such euphoria also left many wondering if corporate venturing is becoming too frothy.
As I report (see page 17 of our magazine PDF) there were many ideas flying at Newport Beach, but it is wise to assume the current boom in corporate venturing will not last for long. Those who achieve lasting programmes have to be prepared for some form of shake-out, and although now is a great time to be working in corporate venturing it is fair to assume tougher times may be around the corner.
Of course, as we have often pointed out in the past, many corporates have invested earlier than usual in the current venture cycle, and so we can assume some groups may well have invested early enough to protect themselves should the current batch of investments disappoint.
What is certain is very interesting companies are being built on the back of sustained corporate investment. Our globalisation of innovation series (see page 14), sponsored by the UK government’s UK Trade & Investment, looks at IP.access, a UK-based small cell company that has received US corporate venturing backing from, among others, Qualcomm, Intel, Cisco and TE Connectivity. This corporate support has helped IP.access position itself well in a market industry analysts now think could grow to $22bn by 2016. The company’s backers and the chief executive certainly gave the impression of a group of people hopeful they have a hit on their hands. It is heartening that corporates are playing a fundamental role in taking these small companies forward, as it suggests capitalism is working well.
Simultaneously it gives me great pleasure to introduce the first in a series of articles by academics Boris Battistini and Martin Haemmig (see page 27), which has a look at the latest trends in corporate venturing data.
Those preparing for the future would do well to study the data in the article – it is extensive, using the Global Corporate Venturing database as well as material from Dow Jones and Ernst & Young.
Alongside our annual industrial feature, I have also profiled ABB Technology Ventures, the corporate venturing unit of Switzerland-based industrial group ABB (see page 12). This unit seems to have implemented its strategy well so far. Given the sharp rise in new entrants, I am hopeful the feature provides some insight for those embarking on similar path. The group’s head, Girish Nadkarni, also candidly tackles its first write-off, solar company GreenVolts.
I am hopeful these pieces and our entire issue continue to provide useful snapshots of activity in the corporate venturing world. Let us know what we should be keeping an eye on or writing about as this sector thrives. In addition, let us know how you think the current boom in interest in corporate venturing will play out. We would like to play a useful role in communicating corporate venturing industry best practice as well as tracking all activity in the sector, so if you can provide any insight into how you are ensuring you maintain discipline in a booming market, we are all ears.
Be sure to attend our May 21-22 conference in London to discuss where the industry is heading, joining the leaders in the field (see page 19). We
have a great line-up of speakers including Al Gore, WPP’s Sir Martin Sorrell, ARM’s Warren East, IBM Venture Capital’s Claudia Fan Munce, Citigroup’s Deborah Hopkins and Qualcomm’s Nagraj Kashyap.