The ninth annual global corporate venturing symposium in London got underway yesterday with opening remarks from Mawsonia’s founder and editor-in-chief, James Mawson, and chief operating officer Tim Lafferty.
The event kicked off with the co-chairs of this year’s gathering – BP Ventures vice-president David Gilmour and Jacqueline LeSage Krause, managing director of Munich Re’s corporate venturing unit, Munich RE/HSB Ventures – expounding on the principal theme of this year’s symposium: facing up to potential “turbulence” in the industry.
Fittingly, the co-chairs identified potential downsides from the perspective of their companies. As LeSage Krause remarked, “risk is everywhere in this world”. Of course, for Munich/Re’s business, the aim is to better account for these risks as they form globally. However, preparing and managing that downside is a critical part of corporate venture capital (CVC).
LeSage Krause and Gilmour concurred that it is of vital importance that CVC units demonstrate professionalism to their parent companies. As Gilmour put it, the C-suite executives must be convinced that corporate venturing strategy is based on sustainability, not vanity. If you cannot demonstrate value then you are at risk.
The symposium’s attention then turned to challenges facing frontier technologies such as artificial intelligence, and the need for the sector to continue innovating in both its investment strategy and product development.
Neil Foster, partner for corporate M&A and private equity at international law firm Baker Botts, chaired a panel that included Stuart Chapman from Draper Esprit and Bindi Karia, an ex-Microsoft innovation specialist and outgoing adviser to the European Union’s European Innovation Council.
Bruno Massioner, chief executive of AI technology developer AI Brain, also took part in the discussion, urging the industry to build more intelligent AI technologies capable of precipitating the user’s needs rather than merely responding to programming.
From a funding standpoint, Bindi Karia suggested prospective inventors in frontier tech could be put off by “tick-box” barriers to equity and grant funding, and argued investors were better providing vocational talent assessments such as interviews.
James Mawson returned to the stage to moderate a panel on risk, return and collaboration featuring Jaidev Shergill, senior vice-president of CVC vehicle Capital One Ventures and Scott Lenet, founding president of VC firm and corporate fund manager Touchdown Ventures.
An eye-catching video illustrated the risks of external forces of macroeconomic turmoil and entrepreneurial disruption facing large-scale corporates that could be swept aside.
Opinion on the room was divided on the immediate prospect of an economic downturn. Despite cooling international trade ties and regulatory uncertainties, attendees seemed more bullish than those polled at January’s GCV summit, however Shergill warned a slump within the next year remained a distinct possibility.
Next, William Taranto, president of Merck & Co’s $500m Global Health Innovation (GHI) Fund, spoke to Heidi Mason, co-founder of consultancy Bell Mason Group, about his experiences driving GHI forward over the past decade and in the wider healthcare corporate venturing realm.
Merck had needed convincing of Taranto’s gameplan, but the strategy of GHI, which operates as a independent vehicle separately from its head office, soon took shape with the deployment of strategic innovation tools that kickstarted a rapid period of expansion between 2013 and 2015.
Data is crucial for healthcare’s path forward, Taranto observed, with innovative products marrying informational tools to health data and existing health IT technology to hit two key industry targets at once: improved patient outcomes and lower healthcare costs.
A talk on the corporate VC’s role as a value-added investor followed with insights from Ray Singh, managing director of JetBlue Technology Ventures, the corporate venturing vehicle for airline operator JetBlue, that was moderated by Ken Gatz of Proseeder.
Singh compared the current proliferation of CVC units to the explosion of life that took place on Earth during the Cambrian period of the Paleozoic Era. To bring value, however, corporate venturers must tackle distrust from non-CVCs wary of the acquisition motive, lest they be prevented from entering lucrative investment rounds.
Singh echoed Gimour’s call for a business-like approach. As CVC is a line of business for the corporate parent, he argued, it must be treated in the same way, though he also noted there were different approaches to measuring that performance.
Later, Max Fowinkel and William Janeway, managing director and special limited partner at private equity firm Warburg Pincus, talked over the potential implications of macroeconomic disturbances for CVC funds.
Janeway claimed exits now came more often through corporate acquisitions rather than public flotations, facilitating strategic value for startups from CVC scouting operations outside the motive of financial returns.
Fowinkel meanwhile cited a perception that funding will always be available for the increasing tendency for companies to postpone profitability for long periods, and Janeway stressed that a company must have a plan in place to achieve positive cash flow as a barrier to potential issues such as rising interest rates.
James Mawson then chaired a panel on blockchain technology and its ability to enhance the management of venture capital funds and investments.
Thomas Zehnder of VC firm BlueOcean Ventures and Ami Ben David, managing partner of blockchain-powered fund manager Spice Venture Capital, touted blockchain’s potential in facilitating ownership of value, though the regulatory framework emerging for tokenised assets is a key consideration.
Blockchain technology has the potential to add a liquidity element to venture capital, and Zehnder said he is looking to make the process of getting investors onboard more efficient. Ben David cited the potential it has to make the value of asset and securities ownership more secure.
After lunch, proceedings moved to an innovation showcase on disruptive mobility and energy applications that was overseen by GCV senior adviser on energy and mobility Tom Whitehouse.
Representatives of four CVC-backed businesses gave the symposium a detailed overview of the latest technological trends after being introduced by members of the corporate venturing vehicles that have invested in them.
BP’s David Gilmour and Tony Cannestra, director of corporate ventures for automotive component maker Denso, made the case for electric powertrain supplier Lightning Systems and conductive nanomaterial creator Canatu respectively.
Brian Schettler, managing director of Boeing HorizonX, introduced the CEO of supersonic airplane engine developer Reaction Engines, Mark Thomas, as well as the founder of low-profile satellite terminal developer Isotropic Systems, John Finney.
Soichi Kariyazono, chairman of trade association Japan Venture Capital Association (JVCA), took the penultimate session of day one alongside James Mawson, exploring trends in Japan’s corporate venturing ecosystem gleaned from a survey JVCA had conducted in partnership with GCV Analytics.
With venture funding on the rise in the land of the rising sun, Kariyazono said Japan’s corporates had seized the opportunity to mirror the transformational example set by the burgeoning CVC community.
Kariyazono detailed a situation where JVCA’s membership had doubled since 2015 alongside the significant growth of Japanese VC activity, in a country where corporate investment makes up roughly 50% of investment. A lack of short-term returns may be a concern, but domestic corporates are increasingly seeking strategic benefits from their deals.
Finally, James Mawson closed proceedings with Amanda Feldman and Charmian Love, co-founders of consulting firm Heliotropy, taking the wraps off the latest addition to Mawsonia’s family of publications, Global Impact Venturing.
GIV will report on impact investments that drive progress towards positive change globally, in areas ranging from sustainability to education and finance in developing nations, as corporates take on the mantle of attaining the UN’s Sustainable Development Goals.
Panelists Ademidun Edosomwan from Total Energy Ventures, Allie Burns from Village Capital and Martijn de Wever of Force Over Mass spoke about current investment trends in the space, before Clara Shen from Mars Wrigley Confectionery China and Andy Dewis of Schneider Electric discussed what impact investment looks like.
Feldman urged investors to strive for transparency in their impact-related portfolios, a call echoed by Mawson, who remarked: “It is about all of us coming together.”