Megumi Ikeda, general manager of Europe and managing director of Hearst Ventures, the corporate venturing unit of the US-based publisher, covered the start of the first dot.com bubble as a journalist before moving into corporate development and the past decade as a venture investor.
Based in the UK for Hearst Ventures since 2014, her first big deal was Signal Media, the UK-based creator of an artificial intelligence-equipped information intelligence platform, which raised £5.8m ($7.4m) in series A funding at the end of 2016 from investors including media groups Hearst and RELX.
Signal’s software analyses more than 2 million news articles across 90 countries each day, allowing a user base primarily operating in the financial services, legal and professional services industries to monitor international events.
As Ikeda at the time said: “The Signal team recognises that businesses need to change the way they access and act on information. In a 24-second news cycle, slow and incomplete news monitoring have forced businesses on to the defensive.
“In a market that has long struggled to innovate, Signal has effectively differentiated itself from its competitors, offering a product that enables businesses be proactive in their communications and decision-making.”
While this might be a relative drop in the ocean compared with the more than $1bn invested by Hearst Ventures in strategic investments in companies operating at the intersection of media and technology, such as Netscape’s whose mid-1990s flotation effectively sparked that first dot.com bull run, the Signal deals speaks to the successful formula Hearst Ventures and Ikeda have used before.
Ikeda previously ran the European arm of the Peacock Equity Fund, GE Capital and NBCUniversal’s $250m corporate venture capital fund. As a board member of then-portfolio company Bigpoint, Ikeda saw growth equity investors Summit Partners and TA Associates invest $350m in Bigpoint at an enterprise valuation of more than $600m to give a more than-five times return for its corporate venturing backer.
As Ikeda noted of her accomplishments: “On returns, it was the Bigpoint investment I lead while at Peacock Equity Fund (which exited in 2016).”
For Peacock, its reported $40m investment for a 35% stake in Bigpoint was at the time its largest deal from the fund. (In March 2016 bigpoint was acquired for an undisclosed amount by China-based Youzu.)
Previously, she worked in corporate M&A and distribution deals at NBCUniversal.
And Ikeda said it had been rewarding to be withing corporate venture capital. She said: “When done properly – and it is a complex endeavour – CVC can be highly effective.
“I like the idea of harnessing the power and expertise of a large organisation like Hearst to support a startup, while simultaneously gaining insight into trends and new technologies via investments.
“From a startup’s point of view, because we have a single limited partner (Hearst) and do not have to go out and raise funds every few years, we can have a far better alignment of interests with entrepreneurs.”
However, challenges remain. Ikeda added: “Up until a few years ago having fellow investors and entrepreneurs understand the value of CVC was a challenge. That is no longer the case.
“Today the challenge is one we share with traditional VC, namely being disciplined about what to spend time and focus on. The European market is dynamic, emerging and still underinvested, but it is geographically spread and culturally diverse which presents unique challenges.”
On what could help the industry, she said: “First, provide more daylight around how decisions are made for each fund. Second, commit to staying in the game for at least two-plus fund cycles.”
Ikeda received her undergraduate degree from Columbia College, Columbia University and earned her MBA at UCLA’s Anderson School and concluded: “My spare time tends to revolve around chasing my kids, reading the stack of books by my bed past midnight, missing gym classes and attempting to learn Greek.”