Tony Cannestra has been a director of corporate ventures at car parts maker Denso International America since April 2014, where he leads its corporate venture efforts.
He set up a venture investing strategy for Denso by establishing an extensive network of universities, entrepreneurs, incubators, accelerators, angel investor groups and venture capital funds.
The unit invests in early-stage startups that are compatible with Denso’s strategic growth plan through equity investments and non-equity funding, as well as mergers and acquisitions. The investees typically develop advanced robotics, mobility, manufacturing and internet-of-things technologies.
After having touched on the autonomous vehicle topic at last year’s Global Corporate Venturing and Innovation Summit where Cannestra said most of the technology would likely be developed in the next few years, at this year’s Summit, he talked about the hype surrounding this space. “It is good to have a hype, but the performance of our investments is important.”
As evidence of this trend, last year, the unit participated in a $60m series B round for US-based mobility software developer Ridecell, a $65m series C round for US-based artificial intelligence processors developer ThinCI, a $10m financing round for US-based wireless technology developer Metawave and a $2m seed round for US-based IoT and automotive cybersecurity technology developer Dellfer – all but Ridecell were co-led by Denso.
Under Cannestra’s leadership, the unit has acquired two companies – US-based Bluetooth low energy micro-location and passive phone-as-a-key technologies developer InfiniteKey in 2017 and US-based automotive diagnostic software supplier Ease Simulation in 2014.
In an interview for GCV’s mobility sector report published in 2016, 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 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.
