Dominique Mégret helped form Swisscom Ventures (SCV), the corporate venture capital (CVC) arm of telecoms firm Swisscom, in 2005. The early-to-growth stage fund runs on an evergreen model where returns are reinvested in new portfolio companies.
Mégret has been instrumental in the creation of a global network of information and communication technology corporate venturers. In July 2018, a CHF200m ($199m) external fund called the Digital Transformation Fund I was raised, with Swisscom committing about $50m and included an oversubscribed offering to third-party investors, that is currently co-investing alongside SCV III fund.
SCV targets early to later-stage developers of IT, cloud and communication infrastructure building on the unit’s heritage, in addition to disruptive digital applications covering verticals such as e-health, fintech, telecoms, e-commerce, e-government, e-mobility, energy, precision agriculture, industry 4.0 and digital media.
Around half of the capital is being invested in the Swiss ecosystem while the remainder goes to markets SCV is familiar with, encompassing the US, Europe and Israel. Initial commitment per deal is between CHF1m and CHF5m at seed to early-stage with follow-on investments of up to CHF22.5m per company.
After the success achieved by SCV I and SCV II spanning from 2007 to 2016 that had jointly backed 49 companies and achieved 25 exits, SCV III and Digital Transformation Fund I have carried on the momentum. The unit has 41 active portfolio companies and scored 31 exits.
Its most recent investments include visual automation software developer Deepomatic, video infrastructure technology provider Bitmovin, digital asset management infrastructure developer Fireblocks, virtual laboratory technology developer Labster and Switzerland-based fraud prevention software provider NetGuardians.
Silicon Valley had been SCV’s focus outside Switzerland – with the US deals having purely strategic value centring on telecoms-related areas. Mégret is confident that the Swiss ecosystem remains strong and may have less competition from global investors that are now largely confined to their home countries.
“That is why we have been taking some bets in areas which seem, at this point, remote but are getting closer to the core business of Swisscom, such as e-health, the internet of things, artificial intelligence, wearables and even fintech,” Mégret said.
“So, overall about half of our investments are important new technologies bringing efficiencies to our industry, while the other half consists of technologies that will or may become important to us, thus giving us differentiation in the broad customer management and experience field.”
Mégret joined Swisscom in 2002 as head of the group strategy division, a role he held for two years before he went on to create the CVC unit.
Before that, Mégret was an entrepreneur in the UK, a strategy consultant in the European telecoms industry, a country manager for a Germany-based IT company and also a co-founder of venture capital firm Kick-Start Ventures. He holds a bachelor’s degree from the European Partnership of Business Schools (EPBS) and an MBA from Insead.
