Tony Cannestra has been a director of corporate ventures at car parts maker Denso International America since April 2014, where he leads its strategic investing efforts. He set up an investing strategy for the Japan-headquartered corporate 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 2018’s Global Corporate Venturing and Innovation (GCVI) Summit where Cannestra said most of the technology would likely be developed in the next few years, at 2019’s iteration, he talked about the hype surrounding this space. “It is good to have a hype, but the performance of our investments is important.”
At 2020’s GCVI Summit, Cannestra dived into the importance of extending the investment thesis beyond technology areas strictly related to the core business. “To step outside of our core and into mobility has been a milestone for use – such as car sharing, ride sharing and so on, and trying to understand where they are headed and see if there are opportunities for us,” he said.
“There is interesting dynamics around data and who is controlling it and how to monetise it. It is tenuous for us to think we own the data but we would like to employ and know more about what we do it and do it better, if we could make better predictions about failure rates of parts, and so on.”
In addition, Cannestra noted semiconductors, autonomy and agriculture technology would be the most important trends in 2020.
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 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 (LP) 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 up the role at Denso, Cannestra had spent five years as managing partner of VC firm Strategic Venture Partners, where he focused on corporate investors as LPs. 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.
