Probably the most active corporate venturing unit over the past four years in terms of volume of activity has perhaps been a surprising one – Spain-based telecoms group Telefónica.
Apart from misleadingly-named venture capital firm 500 Startups’ 1,200 deals in its first five years, it is hard to find another group that matches Telefónica’s €275m ($300m) invested in 680 companies through its Open Future programme led by general manager Ana Segurado.
Segurado joined Telefónica in 2012 to launch Amerigo, a network of VC funds with public and private co-investors focusing on tech investments, before expanding her role to the other areas under what is now called Open Future.
Amerigo now has six funds, with an aggregated size of €345m including Telefónica’s commitments, in Germany, Spain, Brazil, Mexico, Peru, Colombia and Chile.
Amerigo has 76 companies in its portfolio, including Job&Talent, Carto and Adjust, and its exits include Ticketbits.
Wayra, the corporate accelerator network of Telefónica Open Future with 11 spaces in 10 countries, has been its primary vehicle by volume, having invested €30m in more than 500 of these startups worldwide since its launch in 2011. In 2015, Volo, which had been started at the Munich Wayra accelerator, was sold to Germany-listed Rocket Internet.
Since 2014, Segurado has also been leading Telefónica Ventures, Telefónica´s corporate venture fund with investment focus in North America, Israel and Europe. Telefónica Ventures has invested more than €60m in 19 companies, including Quantenna, Sigfox, Boku and Cyanogen, and exited others, such as Box and Amobee.
Before joining Telefónica, Segurado spent more than 10 years as investment manager in Inversiones Ibersuizas, now Portobello Capital, a Spain-based private equty firm with more than €500m under management.
And this perspective was important when taking on all three areas under Open Future.
Javier Placer, CEO of Open Future, said: “Bringing private equity management skills into a view that also takes into account the strategic goals of a multinational company is the key vision that Ana, now one of the most respected professionals of the VC industry, has brought to my team.”
And Jack Leeney, former head of Telefónica Ventures in the US before his move to be a partner at 7GlobalCapital, agreed. “Segurado was very market-driven and from a private equity background, which was always helpful to do this role within a large corporate.”
Segurado said what attracted her to corporate venture capital was “the potential of generating strategic value for a corporate beyond financial investment activity”.
She added: “In the case of Telefónica, the scope of the project was also very interesting, with global presence and broad scope of investment in the digital arena.
“Telefónica Open Future has achieved €100m of cumulated revenues and savings for Grupo Telefónica coming as a result of the collaboration between Telefónica and the portfolio companies.
“Quantenna is a good case study of success in CVC. Since 2011, and with current prices of the stock after the IPO, we have multiplied by almost four times the money invested, in terms of value.
“At the same time we have a great commercial relationship between Telefónica and Quantenna. Telefónica has acquired during this time more than 2 million chipsets from Quantenna, and Quantenna technology has been very relevant for the deployment of Movistar TV in Spain.”
But delivering such an effective entrepreneur-to-corporate relationship is tough. Segurado said her biggest challenges had been “making collaboration happen successfully between the portfolio companies and Telefónica” and, even for such a keen traveller and historian, managing “a team located in 10 different countries across Europe and America and in very different economies and environments”.
Her main advice to other CVCs, therefore, was to “let potfolio companies live independently from the big corporation and do not oversell to invested companies the value you can bring to them in terms of business or commercial opportunities within the parent company”.
But having made so many investments, the opportunity to deliver more Quantenna-type successes looms.
This challenge of repetition and scaling to a company as large as Telefónica faces all startups, something students of Segurado’s entrepreneurship course at the Universidad Pontificia Comillas-ICADE for the past decade know well.
Segurado, who studied at the university in the 1990s, is applying these lessons to Telefónica. She said her ambition was “to multiply the ebitda [earnings before interest, tax, depreciation and amortisation] contribution of my area to the company”.
Under Open Future’s Placer – included in GCV’s Powerlist 2016 – Telefónica seems to have made a good call with Segurado’s hire.