Rain Cui, director of JCI Ventures, the corporate venture capital (CVC) unit of US-based Johnson Controls International, leads startup investments strategic to JCI across various sectors including artificial intelligence (AI) and machine learning, unmanned machines, internet of things (IoT), security and smart buildings technologies.
She sits on the board of Nevada Nanotech Systems, a “digital smell” IoT startup. This was an investment Cui worked on at Tyco Ventures in 2015 just after joining the corporate venturing unit and before the parent company, Tyco International’s, merger with JCI in September 2016.
Cui reports directly to Robert Locke, senior vice-president for corporate development in building technologies at JCI, who covers corporate venture, mergers and acquisitions, and is an executive sponsor for several of JCI’s largest customers.
She recently led a deal in an energy efficiency startup, which has not been publically announced yet. Cui said: “In 2017, I led JCI’s $5m investment in the oversubscribed series A of a clean energy company specialising in serving commercial real estate investors and the private education markets. I represent JCI as the board observer.”
She is also leading an investment in facial authentication for physical security: “This startup enables frictionless access control using 3D sensing and AI. This deal is very exciting because the future of authentication is frictionless, and facial modeling significantly enhances security over traditional authentication methods.”
It might seem a long way from her formal studies. Prior to joining Tyco/JCI, Cui was used her biostatistics PhD from Harvard University and then MBA from its business school in the biopharmaceutical industry, including stints at GE Ventures Healthcare, Immuneering, Virgin Pulse and Trinity Partners. But the diversity of CVC is part of the attraction for her.
Cui said: “Venture capital is an exciting industry that plays an integral part in building the companies of our future. Many of these companies will greatly impact and change existing industries, as well as our economy. The most valuable tech companies today would not exist without venture capital.
It is a great privilege for me to work alongside and help entrepreneurs build their companies. My role enables me to learn constantly, as I am always evaluating new ideas and technologies. I love the thrill of discovering transformative companies and closing great deals.
“The parent company of a CVC unit can be an invaluable strategic partner to a startup in its ability to drive revenue; revenue and positive cashflow are what matter when the rubber meets the road. By integrating a startup’s offerings into its existing products or selling them through its existing channels, a parent company can serve as a catalyst for a startup’s exponential growth.
“On the flip side, a startup brings new technology, new intellectual property and new ways of thinking to the table, which can help a large and mature company stay innovative.
“When a startup investment is truly strategic, a CVC’s involvement can be the key factor in bringing world-changing technologies to market.
“One of the biggest challenges of startup investing is predicting the future – venture capital in its essence is investing in startups with technologies or business models that will be relevant years in the future.”
To help in this, and as an adviser in US trade body the National Venture Capital Association’s corporate venture group, Cui is pushing for the industry to make their investment processes more transparent. She said: “CVC units have their own distinct characteristics, investment criteria, and processes, and they can vary greatly from one to the next. For example, CVCs differ in whether they are strategic or financial investors, what their due diligence requirements are, what is required to get investment committee approval, and the timing required to close a deal. Startups often find working with CVCs can be like a black box so it helps to provide clarity and transparency.”
Her intentions meanwhile seem clear: “To invest in startups at the bleeding edge of technology and to be an indispensable partner to the companies I invest in.”