For many in Silicon Valley, the perfect example of technology and venture investing is found in Hewlett Packard Enterprise (HPE), the information technology firm that can be traced back to its founding in a Palo Alto garage by two Stanford University students in the 1930s.
Founded by William Hewlett and David Packard, HP’s alumni include Tom Perkins, who co-founded storied VC firm, Kleiner Perkins Caufield & Byers in the 1970s, and it had been an early corporate venturer itself in the late 1980s, before a restructuring more than a decade later.
Lak Ananth, managing director at Hewlett Packard Ventures, is now helping the next generation of entrepreneurs invent the future. His ventures team, which includes GCV Rising Star 2016 awardee Ray Schuder, focuses on mid to late-stage enterprise IT investments where it intersects with HPE’s strategic focus and is separate to HP Tech Ventures, which is a corporate venturing unit for HP Inc after its separation from HPE.
Ananth, who excelled academically in India then at Insead after winning a National Talent Search Examination scholarship, said: “We have been flying under the radar since early 2015. Over the past year we have made 10-plus investments, primarily expansion-stage investments alongside top-tier VCs, such as Sequoia, NEA, DFJ, Battery, A16Z, Menlo, and so on.
“We invest broadly across the enterprise space, covering hybrid cloud, software defined data centre, big data and analytics, security, internet of things (IoT) and mobility.”
Its deals since 2015 have included Chef, Coho Data, Playground, Linker Networks, Luminate, Scality, Mesosphere, Hortonworks, Tamr, and Hexadite, with Adallom being another investment and its first exit, acquired by Microsoft for a reported $320m after just a five-month hold period.
Ananth said of his remaining investments he was “very excited about” Andy Rubin’s incubator, Playground, for IoT. And he added: “Typically, we provide expansion stage capital and exceptional support to the best enterprise technology startups and then help founders and executive teams scale through leveraging our global enterprise resources and leadership expertise, building credibility with customers and supercharging routes to market.
“The big difference for us from a typical corporate investor is that my team will identify customer opportunities to take a portfolio company solution to and introduce them directly to the sales and services teams working with the customer. This provides a path to scale companies from 10s of customers to 100s of customers through HPE’s reach.
“While most other corporate investors provide lip service to this, they do not really control partnerships and cannot provide customer access. Our portfolio companies see this as huge value and we will continue to develop this capability, as we make about 10 additional investments this year.
“With regards to the upcoming year, we are ambitious about what we can do through partnership for our portfolio companies. We are taking corporate venturing up a level to include both venture investments and commercial partnerships under the same roof, and will be talking more about this as Hewlett Packard Pathfinder.”
Meg Whitman, president and CEO of HPE, in an article for IDG discussed HP Ventures’ strategy. She said: “We are increasingly forming partnerships and making investments in these small companies that we then curate for enterprise scale. So we are going to try to be a curator, if you will, because if we integrate a young company into our solutions, we have to be able to support them globally.
“But we cannot buy all these companies. First of all, there are too many of them. And in security, by adopting companies to integrate into our solution, if another one comes along that is better for our customers, we move to that one and we are not stuck having paid $200m or $300m for a company. It is a different operating model for Hewlett Packard Enterprise, it is a big cultural change for the company, because we are used to selling only what we own, for the most part.”
Prior to leading Pathfinder, Ananth at HP led the acquisitions of Eucalyptus and Shunra, and developed the strategy behind the acquisition of Aruba. Earlier, he had led multiple transactions at Cisco System, including the $2.9bn acquisition of Starent Networks, the $1.2bn acquisition of Meraki, and investment in Control4. Before his near-three year stint at Cisco from 2008 to June 2011, he had worked at venture capital firms Bridgescale, 3i and Cambridge Technology Partners for just more than a decade from 1997.
Hewlett Packard Enterprise’s investment activity since the beginning of 2015
