Rob Salvagno, head of corporate development and Cisco Investments, discussed in January at the Global Corporate Venturing and Innovation Summit the unit’s investment strategy and its progress since Salvagno stepped into his leadership role two years ago.
US-based network equipment company Cisco has so far acquired around 200 companies, while its Cisco Investments corporate venturing unit invests an estimated $150m a year. It has more than $2bn of investments in 100 companies and 40 venture funds.
Salvagno, who runs a team of more than 40, said having the same team working on both investments and acquisitions had been key in driving the unit’s success. He added: “Although there is still a long way to go, we have the opportunity to be a top investor. We do a great job at tracking innovation, so what we really need to do now is build our core value proposition.”
This, Salvagno said, was crucial for a unit’s success. When setting up a unit, CVCs should first determine their investment approach. Was the goal to strengthen existing businesses, or to track innovation outside that? “These are two different philosophies, and you need to be clear about them both internally and externally,” he said. “There is a lot of money out there, so you really have to look at what makes you unique. It is about believing in your core value proposition, and how it may benefit your portfolio companies.”
The company in October 2015 promoted him after Hilton Romanski, its senior vice-president of corporate development, became chief strategy officer. Salvagno had joined Cisco at the end of the 1990s dot.com boom have been a tech investment banker at storied firms Donaldson, Lufkin & Jenrette and PaineWebber after graduating in economics at Stanford University in 1997.
Together, corporate development and Cisco Investments have a worldwide presence with teams covering the US, Israel, China, Asia-Pacific, Japan and Europe.
Founded in 1993, Cisco has committed to multiple VC funds, notably SoftBank’s China fund, which invested in online retailer Alibaba. Most recently, Cisco said it was committing to a new fund being set up by Jon Sakoda, a 12-year veteran at VC firm New Enterprise Associates. Cisco’s strategic priorities are in the areas of data centres, cloud, security, big data, internet of things and core network equipment.
Recent commitments in India have shown the country’s importance to Cisco. Cisco has long been active in India, having pledged in 2010 to invest $200m in the country over a three-to-five period. It allocated $40m to early-stage startups in the country in 2014 before expanding the initiative to $100m in 2016.
In March, Cisco Investments committed an undisclosed amount to venture capital firm IDG Ventures India’s third fund, the Economic Times reported.
In February, Cisco became a limited partner in VC firm Stellaris Venture Partners’ first fund, which has a $100m target. The fund has already secured capital from enterprise software producer SAP and IT services firm Infosys.
At the time, Salvagno said: “Cisco has a rich history of participating in India’s technology ecosystem and investing directly in local innovation over the past decade.”
Its history is equally rich around the rest of the world under Salvagno.
