From its initial switch from pulp and paper into telecoms and media in Sweden in the 1990s and then into online companies such as Avito, Rocket Internet and Zalando in the 2010s now comes the push into privately-held startups as it sells its $2bn stake in telecoms asset Tele2.
“Thanks to this pandemic the accelerated digital behaviour has really helped the speed of that transformation. All of a sudden, all these investments become less risky than traditional industry,” Georgi Ganev, CEO of Kinnevik, told the Financial Times.
Japan-listed peer SoftBank has been doing the same having sold the final telecoms asset, BrightStar, this month to increase its focus on public and private growth stocks.
But is this Kinnevik’s move really corporate venturing? Some traditionalists argue it is just tourism. They say it is asset management for financial returns with little consideration of the strategic implications. Maybe, but for now the disruption caused by covid-19 has accelerated digitalization and technology patterns from years to months.
The established tech companies, such as Microsoft, Alphabet and Apple in the US to Bytedance, Alibaba and Tencent in China, and investors, from Scottish Mortgage Investment Trust to Fidelity, BlackRock and Kinnevik, strong in private investments have benefited and have the cash to invest further.
The market might be frothy as a result (see our discussion in this week’s podcast). But, as the Washington Post noted last month, for those companies, such as industrials, unable to point credibly to a growth strategy in this area of digitalization and technology investment, are underperforming. Few things seem more strategic than that to CEOs.
