Scott Bowman, partner at consulting firm Clareo Partners discussed the evolution and future direction of corporate venturing models with a panel of investors yesterday at the Global Corporate Venturing Symposium.
The panel comprised Phil Giesler, group head strategic science and technology for British American Tobacco; George Ugras, general partner and advisor at venture capital firm Frost Data Capital; Wal Van Lierop, co-founder and chief executive of VC firm Chrysalix EVC; and Roy Williamson, partner at Castrol Innoventures, which acts as lubricant producer Castrol’s corporate venturing unit.
Corporate venturing is now in its “fourth wave”, said Giesler. In the most recent wave immediately after the financial crisis, in 2009/10, corporate venturers “doubled down as they realised the importance of innovation and open innovation. Corporates wanted to get strategic value and returns.”
Now, he added: “There are fresh challenges, and a multiple number of ways of engaging with disruptors.”
Ugras then explained his model of corporate venturing, which involves finding people with innovative ideas inside corporates, and developing those in line with corporate objectives. He described it as “another asset class, to be added to M&A and R&D.”
Lierop said: “We are at the cusp of a new super cycle of innovation. When you are in Silicon Valley or in Asia, people are shaping their future rather than hanging onto the past.”
Lierop added that the point of corporate venturing was not purely to generate money, saying: “You have to hope you will find the next unicorn, and that you can integrate into your core business.”
Castrol Innoventures, which operates a “build-buy” model of corporate venturing, was established to help understand future options available to its parent company. According to Williamson, the venturing unit now “is defining the strategic direction of Castrol.”
Giesler, referring to the growth of electronic cigarettes – an invention which came out of China before being commercialised in the US – said that in future corporates needed to be “broader and smarter. It is about making connections, between technology and markets.”