The internet of things (IoT) boom has become a major focus for corporate venturing units in the telecoms industry, while venturing units in the sector are also looking at related technologies such as digital health. Nils Granath, head of investments at telecoms firm TeliaSonera, told Global Corporate Venturing: “The things we are looking at are the same as all other telcos. It is IoT – we have two investments in IoT, connected home and connected car – financial services, media, of course. We have a lot of activity in the media space, music, films and podcasts, and also the cloud.”
Indeed, when it comes to music, Granath pointed out that TeliaSonera had entered a partnership with streaming service Spotify several years ago when it decided to bundle the product with its phones, helping Spotify to get off the ground in the Nordic countries. The telecoms firm has recently followed up that initial commitment with a $115m contribution to Spotify’s $526m series G round.
Granath also suggested TeliaSonera was interested in digital health products, particularly home care enabled by technologies such as tablets. The company currently supports several pilots. Granath said: “They are big pilots, and they are very much around home care because that is a huge population, people are getting older and they want to stay at home. Hospitals are much more expensive, but we can use iPads to communicate with health staff. That is really exciting.”
Meanwhile, Minette Navarrete, co-founder, president and vice-chairman of Globe Telecom’s corporate venturing subsidiary Kickstart Ventures, also noted how bundling Spotify had enabled the parent company’s dramatic growth in the Philippines over the past two years.
Although Kickstart has invested in some companies over the past year, such as job-matching platform Kalibrr and credit-scoring and identify-verification service Lenddo, Navarrete also said: “The Philippines has lagged behind its southeast Asian neighbours in corporate venture capital players. While there have been a few purely financial venture capital funds – ICCP and Narra Ventures are two local players – there have not been many corporate venture capital funds, even with the increased startup activity in the Philippines.
She was hopeful, however, suggesting that the quality of entrepreneurs and startups is continually improving in the country and the country is making a name for its ecosystem. According to her, corporate venturing will continue to increase in the country and more capital will also flow in from overseas investors. She concluded: “Corporates who participate early will benefit – whether via corporate venture capital, or even via commercial partnerships with the agile, innovative startups. We are convinced Globe Telecom is on the right track.”
People
Vincent Hebbelynck stepped up to head of incubation and corporate venturing at telecoms company Proximus. He was previously head of voice development and innovation at subsidiary Belgacom International Carrier Services, having originally joined the company in 2000 as corporate solution manager of subsidiary Telindus.
Telecoms company Telefónica’s managing director of global affairs and new ventures, Javier Santiso, set up a new fund aimed at growth-stage companies in Spain. He joined the company in 2010 as director, chief executive and chairman of regional subsidiary Telefónica Latin America. Santiso created fund of funds Amerigo and co-founded accelerator Wayra, while working for Telefónica Latin America.
Jay Onda, principal of Docomo Capital, the corporate venturing division of mobile network NTT Docomo, has moved to automotive and motor manufacturer Yamaha. Onda has been hired as director of strategic investments for Yamaha Motor Ventures and Laboratory, the company’s new corporate venturing unit. He has been a principal of Docomo Capital for two years.
Onda is joined at the unit by George Kellerman and Amish Parashar. Kellerman has become general partner and director of operations, moving from his position as general manager of Crystal Tech Fund. Parashar is now the unit’s venture partner and director of strategic business development. He was previously director of innovation and strategy at research and development lab Triple Ring Technologies.
The sector lost Matthew Fix, a former partner at mobile phone network operator Vodafone’s corporate venturing division Vodafone Ventures, who died aged 42 in June. Fix worked at Vodafone Ventures from 2006 to 2013 and helped restart the unit as well as push it into the top 10 most active mobile corporate venturing divisions from 2010-12.
Funds
Companies in the sector set up 25 new funds over the past year. We look at the 10 largest.
Cable and telecoms company Comcast created a new corporate venturing division, funded with $4.1bn, which will begin investing later this year or early next. The unit will focus on larger investments than those of fellow corporate venturing unit Comcast Ventures, between $15m and $1bn. Comcast provided $4bn, while the remaining money will be invested by senior team members, including chief financial officer Michael Angelakis, who will head the unit.
Deutsche Telekom has set up a €500m ($620m) corporate venturing division dubbed Deutsche Telekom Capital Partners. The unit is looking at early-stage startups, focusing on Germany, as well as growth-stage companies seeking to establish corporate partnerships. Capital Partners is also supporting the company’s existing initiatives – Deutsche Telekom Innovation Pool, Strato, Interactive Media and Scout. Meanwhile T-Venture, Deutsche Telekom’s existing corporate venturing unit, will wind down.
SoftBank Capital, the corporate venturing unit of the telecoms firm, has raised $100m for another fund, adding to its SoftBank PrinceVille Investments fund, which secured $250m in 2013, and SoftBank Capital Technology New York Fund II, which closed at $51m, also in 2013. The news was followed by SoftBank’s announcement that it was winding down the unit and would invest only from its existing funds.
China Mobile has joined forces with state-owned fund State Development and Investment Corporation (SDIC) to raise $806m aimed at China-based mobile internet businesses. China Mobile has committed $242m, while SDIC invested $156m. The remainder came from third-party investors.
Kickstart Ventures, the corporate venturing subsidiary of Globe Telecom, secured a $50m fund from its parent company and increased the maximum size of individual investment 10-fold to $5m.
Telecoms company FarEastTone joined fellow corporates media company UDN Group, life insurance providers Fubon Life and Cathay Life, and flash storage manufacturer Phison Electronics in backing accelerator AppWorks’s $50m fund. Limited partners also feature China Trust Ventures, the investment vehicle of financial conglomerate CTBC, merchant bank China Development Financial’s investment arm CDIB Capital, Taiwan state-managed National Development Fund and venture capital firm CID.
Telecoms firm KDDI and electrical component producer Sumitomo Electric backed a $42m fund, dubbed Keihanna ATR and targeting robotics companies in Japan’s second-largest urban area, Kansai. The fund was set up by research organisation Advanced Telecommunications Research Institute International and venture capital firm Nippon Venture Capital. Financial services providers Shinsei Bank and Kyoto Bank have also provided cash.
The Axiata Digital Innovation Fund, set up by telecoms company Axiata and government-owned venture capital firm Malaysia Venture Capital Management, will invest a combined $30m in startups developing enterprise and customer services. The fund, to which Axiata contributed half the funding, will focus on entrepreneurs amongMalays and other indigenous groups.
Telecoms service provider Orange established a corporate venturing division, Orange Digital Ventures. Orange expects the $23m fund to be fully invested by the end of January next year.
Venture capital firm Middle East Venture Partners attracted telecoms company Zain Group for a $15m first close of its $30m fund. The fund will seek startups in the Middle East and north Africa, and follows the firm’s $70m Impact Fund launched last year and aiming to invest in Lebanon-based internet and communication technologies startups.
Deals
SoftBank has been most active over the past year, clocking up involvement in an impressive 48 deals. One was its investment of at least $1bn in e-commerce company Coupang. SoftBank take a 20% stake in Coupang, which is renowned for its speedy deliveries – often providing free same-day delivery of products purchased by means of handling the entire fulfilment service.
The second most active company was mobile phone network operator Verizon with 17 deals. The company’s largest deal was a $37.1m series D for Urban Airship, a developer of push notification services for smartphones. Enterprise software developer Salesforce also contributed to the round, which was raised over two tranches, with the second tranche featuring only venture capital firms.
Swisscom participated in 13 rounds, such as sports sensors and data analytics provider PIQ’s $5.5m funding, which was led by a fellow corporate, contract electronics manufacturer Foxconn.
Telecoms company Telstra completed nine deals, the largest a $175m initial public offering of cloud collaboration platform Box, which had secured about $595m in funding. Other corporate backers included Spain-based Telefónica – one of the company’s five deals this past year – semiconductor maker Intel, software producers SAP, Salesforce, conglomerates Mitsui and Itochu, and electronics manufacturer Macnica.
Deutsche Telekom was involved in eight deals. CipherCloud, a cloud visibility and data protection software producer, secured $50m in a round backed by investors including Deutsche Telekom and led by insurance company Transamerica.
Orange took part in seven deals. IoT company Actility secured $25m from a consortium of investors that featured corporates Orange and fellow telecoms firms KPN and Swisscom, as well as Foxconn. The round included, among others, Idinvest Partners, backed by insurance conglomerate Allianz, media group Lagardère, recruitment firm Up Group, and Fonds Ecotechnologies, managed by state-owned investment fund BPIfrance, as well as Truffle Capital.
KDDI took part in six deals, including backing cybersecurity company August, which closed a $38m series B featuring a long list of investors, including many corporates – SingTel, Comcast, wireless technology company Qualcomm, computer storage company SanDisk, talent agency Creative Artists Agency.