Driving good startup relations could be challenging for corporates new to the CVC arena, a consideration germane to the industry’s vast expansion over recent years, said Cameron Geiger, senior vice-president at Wal-Mart, itself relatively new to the game.
The retail chain found some of the answer in embracing the innovation ecosystem, Geiger added. Wal-Mart’s collaborative activities included an alliance with accelerator Plug and Play, under which it had joined plans for a supply chain-focused innovation hub also backed by meat product supplier Tyson Foods.
Geiger was speaking at the GCVI Summit on startup engagement, where strategic alignment emerged as another key takeaway.
The other panellists were Drew Murphy, senior vice-president for strategy and corporate development at energy utility Edison International; Lilly Yeung, vice-president at Molex Ventures, part of manufacturing, chemicals and energy conglomerate Koch Industries; Frank Klemens, investment portfolio manager at DuPont Ventures, a subsidiary of chemicals producer DuPont; and Mike Adams; director for corporate ventures at air and water filter provider Mann + Hummel.
Murphy said the strategic litmus test – where cooperation was likely to benefit both parties – had helped his small investment team manage dealflow. However, he added there was no infallible method for success and often lessons to be learned.
He added: “The main thing is what we do with the investee as a strategic partner, and how they can potentially help our core business improve. We do a lot of work to ensure we are bringing not only the startups but also their knowledge, which is hard to achieve.”
Similar conclusions were drawn by Yeung, who said the company sought “mutual benefit in innovation” as a priority.
Klemens meanwhile stressed that the benefits arising from each deal needed to be clearly defined. Adams argued Mann+ Hummel was strengthened as a family-owned business, permitted to fund innovation without publicised financial accounts.
Saeed Amidi, CEO and founder of Plug and Play, who moderated the session, probed Murphy on innovation’s potential to bolster the safety of Edison’s infrastructure.
Destructive wildfires in Edison’s core market of southern California in 2017 and 2018 were allegedly exacerbated by failures in its equipment, resulting in a costly legal saga for the firm.
Murphy said consultations with startups and insurance firms had uncovered technologies capable of preventing similar situations in future. “That is everything from drones to weather data and high-resolution imaging or situational awareness. All new types of technology on the grid to allow us to shut off faster,” he said.