There is a spring in the step of many corporate venturers currently. This might have to do with the number of new units being set up and the promotions many are experiencing. In the past month alone, three of Global Corporate Venturing’s Rising Stars selected and celebrated at our awards in Sonoma, California, in January have taken on higher roles.
Akira Kirton, commercialisation director at BP Ventures, became co-head with Meghan Sharp; Jack Young became head of venture capital at Deutsche Telekom Capital Partners having only recently become head of North America at Qualcomm Ventures, after the promotion of another GCV Rising Star, Quinn Li; and Derek Norman has this month taken over from Alex Steel as head of Switzerland-based agricultural company Syngenta’s corporate venturing unit.
The timing was opportune for more than just their ability to shape and develop some of the most powerful venture investors in the world. GCV this month is preparing its 2016 Powerlist of the top 100 industry leaders, out of 1,400 analysed, and running these groups brings them eligibility and a chance for some at least to join the invitation-only dinner at the Shard, sponsored by GE Ventures, ahead of our GCV Symposium on May 24-25.
There have also been plenty of fund launches, as a glance at the month’s news pages confirms. More broadly, there have been two trends in terms of launches – larger groups becoming increasingly active with a suite of innovation tools, such as CVC, incubators and innovation labs, and a host of venture-backed and fast-growing companies setting up CVC units to develop an ecosystem, such as Gree’s $12m virtual reality fund (for a closer look at Japan’s regional ecosystem see our regional report), or as a way of maintaining growth rates.
On the first trend, management consultants Boston Consulting Group (BCG) used GCV data in its first report – Corporate Venture Capital: Avoid the Risk, Miss the Rewards – on coproate venturing and so concluded: “CVC appears to be here to stay.”
Now, in its latest report – Corporate Venturing Shifts Gears – BCG admits: “Although time has validated that insight, we did not foresee how quickly and deeply CVC investing would take root and evolve.”
The larger the company, the more intensive its use of venturing tools. Of the top 10 companies in BCG’s sample, 57% make CVC investments, 66% use incubators and accelerators – accelerator partnerships account for 27 percentage points – and 41% operate innovation labs.
The percentage of top-30 players employing CVC rose from 27% in 2010 to 40% in 2015, BCG added. During the same period, the percentage of companies using accelerators and incubators surged from 2% to 44%. The usage rate of innovation labs climbed from 5% to 19% among companies.
That US-listed Yahoo’s main business is worth relatively little while its CVC stakes taken in Alibaba more than a decade ago are enormously valuable indicates how quickly markets and momentum can turn – using a high profile and cash today to take stakes in stars of the future seems a sensible way to play potential cyclical movements.
When GCV in January published its World of Corporate Venturing annual review of the industry for last year, it identified a record number of deals and value of aggregate rounds. Many of these were from newer units, while established groups also generally increased their deal rate.
After a more cautious start to the year, as evidenced in our first quarter review published last month, keynote speakers at this year’s GCV Symposium in London on May 24-25, including Jeffrey Li, managing partner at Tencent, Nagraj Kashyap and George Ugras, new heads of Microsoft Ventures and IBM Ventures respectively, Sue Siegel, CEO of GE Ventures, and Ralf Schnell, head of Siemens Venture Capital, will provide first-hand evidence of current thinking of what they are seeing from the proverbial crow’s nest. I hope to see you there and celebrate your own good news.