Tony Cannestra, director of corporate ventures at car parts maker Denso International America, is preparing for a busy summer.
He said: “We are at 12 [portfolio companies] now, and looking to close another three to four more before the end of the summer.”
These are likely to be in its target areas of advanced robotics, mobility, manufacturing, internet of things, judging by its response to the 2018 outlook survey by GCV.
At this year’s Global Corporate Venturing and Innovation Summit, Cannestra touched on developments in the autonomous vehicles space and noted that there is a “rush of entrepreneurship” in this space, pointing as an example Israel– a country without a native automobile industry, where thousands of startups are currently working on autonomous vehicle technologies. He also said that most of the technology for fully autonomous vehicle will likely be developed in the next three to five years.
The rapid expansion for Denso came after Cannestra took on a new role as director of corporate ventures in 2014.
His first job was to establish a venture investment strategy for Denso, building relationships with entrepreneurs, universities, accelerators, incubators, angel investor groups and venture capital funds. The strategy is to identify early-stage startup companies that are a good match to Denso’s strategic growth plan, “and then create a means to support those companies through both equity investments and non-equity funding”, as well as mergers and acquisitions.
It is a project he has accomplished with aplomb. In an interview for GCV’s mobility sector report published in January last year, Cannestra said: “The startups are typically of strategic interest to Denso [in three areas – connectivity, autonomous vehicles and cybersecurity]. We invest in the stages from seed to series B. Most of the opportunities we look at are mission-critical to the automobile. Because of the importance of those systems, we tend to take a longer-term perspective on when those technologies can be implemented in an automobile. You cannot do what we do in a one or two-year window. And we are investing for strategic rather than financial returns.
“We invest off the balance sheet. This means that we are not limited by the number of investments we can make annually, and it keeps everyone engaged at the R&D level and at the upper management level, since they have to be informed and sign off on every investment.
“In my previous work in venturing, I observed that corporate venturing is not successful unless you really add value to the whole ecosystem. So when I helped create the Denso CVC group in Silicon Valley [California] several years ago, we made a conscious decision to support entrepreneurs at the earliest stages, to work with other venture funds as a limited partner and as a co-investor, as well as leading direct investments.
“So as part of that investment strategy, we sponsor the incubators Prospect Silicon Valley in San Jose, Lemnos Labs in San Francisco and NextEnergy in Detroit. We were the anchor investor in Autotech Ventures and we have made five direct investments in startup companies.”
Before taking the role at Denso, Cannestra spent five years as managing partner of venture capital firm Strategic Venture Partners, where he focused on corporate investors as limited partners. Before that, he was a principal and later an executive vice-president of fund manager Ignite and a board member of energy storage company Cymbet Corporation.