Telstra Ventures, the corporate venturing unit of the Australia-based telecoms company, deploys a two-pronged global strategy.
At the GCV Symposium in London in 2015, Matthew Koertge, managing director of Telstra Ventures, said: “We are looking for opportunities to expand Telstra’s core business, predominantly into Asia. And we are trying to find the world’s best solutions to apply in Australia.”
This work has been going well. Koertge said: “Telstra Ventures continues to make solid progress. We have recently closed our 38th investment since we started five years ago. We have now achieved seven liquidity events, and we have expanded our team to 20.”
At the end of last year, Telstra Ventures provided its vision for the future of the corporate venturing in a report – Strategic Growth Investing: The Next Evolution of Corporate Venture Capital.
Its most recent public exit was BICS’s acquisition of TeleSign in a $230m cash deal. Telstra had invested $9m in TeleSign as part of a $49m series B round in 2014, which came after $29m of funding two years earlier. Its recent portfolio company deals include HealthEngine, an online healthcare marketplace, which motored to a $20m series C round.
GCV’s Leadership Society tracks about 1,000 active CVC units, and Telstra Ventures’ report predicts that by 2025 corporate investors will be responsible for around 35% of the total venture capital provided globally, up from 28% today.
The report suggests that corporate venturers will increasingly become segmented into three distinct types – small teams that take part in two to five deals a year, investing up to $2m each time, more established units that put more financial and human resources into the process, and strategic investment groups that make up part of their parent company’s long-term strategic plans.
The third group, identified by the report as “strategic growth investors”, typically invest at least $50m a year in deals aligned to their parent’s core business as part of a long-term commitment, and seek to provide commercial value as well as a return on investment. Strategic growth investors have the potential to be extremely beneficial for corporates and portfolio companies as long as they maintain access to the capital required for lengthy commitments to companies, and are given ample space and incentives to add commercial value to their deals.
Koertge was formerly a general partner at Accede Capital Venture Partners, having previously spent more than eight years in banks’ investment teams, at Macquarie and Deutsche Bank, and earlier as a project manager at Fujitsu’s telecoms products group.