Hearst Corporation, founded by fabled businessman William Randolph Hearst more than 125 years ago, has been a stalwart of corporate venturing for at least two decades. As an early adopter of corporate venturing, it can lay claim to starting its investment program as one of five corporate investors in Netscape, the US-based search engine which is widely credited as kicking off the dot.com boom due to the success of its initial public offering in 1995.
Kenneth Bronfin, when he was made senior managing director of Hearst’s corporate venturing unit Hearst Ventures in 2013, said: “Our first investment was Netscape, and that was a great place to start. At the time, the founders of Netscape had the insight to reach out to a number of large, progressive media companies to encourage them to publish on the internet. We followed their advice, got started on our web efforts around the company, and also made a strategic investment in the company.”
Besides Netscape, the company has had other notable successes. Bronfin, who held the title of deputy then group head of Hearst Interactive Media for nearly 16 years until he was made senior managing director of ventures, added: “We invested in video on the internet in the early days. Our first investment in the space was Broadcast.com, with Mark Cuban. This became a valuable company, ultimately acquired by Yahoo. Another example, we were an early investor in Brightcove, which has built itself into a terrific company serving the publishing community.”
Bronfin has also backed and joined the boards of Roku, Auctionata, Hasbro and Stylus Media, four of its 22 current investments. He stepped down last year from the boards of Yieldex, after AppNexus bought it for $100m, and Cognitive Networks, after Vizio’s acquisition.
The company does corporate venturing to stay abreast of the changes in the sector. Bronfin in 2013 said: “Our corporate venturing provides us with perspective and valuable insights. While it is important to monitor developments in the industry through industry consultants and the media, we believe it is far more valuable for us to be deeply involved in the sector – hands on, spending time with entrepreneurs and investing in this sector.”
His team has also changed over the past few years. George Kliavkoff is president of Hearst Ventures and Scott English and Darcy Frisch continuing as managing director and vice-president, respectively, but Megumi Ikeda joined as a venture partner looking at Europe-based deals, Katie Hu joining in 2014 to look at those in China, and Travis Ing joining from PwC last year as an associate.
Its investment approach by sector has remained largely consistent. Bronfin said: “I would say that our sectors of interest have essentially remained the same. We are focused on companies with the potential to change the media landscape.”
He said the company had been able to invest in directly adjacent fields to its main businesses – such as non-pure media plays like Roku – as well as areas where the corporation was less active, such as music, where it had backed companies such as XM Satellite Radio and Pandora.
The company has also maintained a consistent strategy around the size of deals. Bronfin in 2013 said: “Part of the secret of our success has been sticking to our knitting. We have maintained and fine-tuned our strategy throughout the years. For example, we have not gone, like some, for seed-stage deals. Our target initial investment is around $5m, although we have a great deal of flexibility depending on the type, size or stage of deal.”
For a man who next month will compete 20 years at Hearst after earlier spending nearly a decade at NBCUniversal (now part of Comcast), such consistency and excellence reaps their own rewards.