During the stormy weather in San Diego at Intel Capital’s recent Global Summit, the thoughtful hosts at the world’s biggest venture capital firm provided umbrellas for as many of its 1,100 guests as it could, while the rain poured down. The gesture chimed with the chivalrous way the corporate venturing unit has offered itself as a reference in venture capital for many of the world’s large corporations, which attended the event en masse.
The design of this umbrella is at once elegant and sturdy. The network Intel Capital gathers round it has the power of plugging in corporate executives to smart startup executives, that are exclusively qualified by millions of dollars of investment from the semiconductor company’s venturing unit, and the due diligence required to link the famous technology engineering company’s brand to a fast-growing young business.
Given this, the transition from the group’s head Arvind Sodhani to his successor Wendell Brooks was understandably treated as a celebration. Brooks called Sodhani, who was integral to setting up the group roughly 30 years ago, a “Silicon Valley icon”, and took the opportunity to set out his vision for what the unit could become, giving the general impression the group would keep its investment approach consistent. The group is on course for one of its largest investment years in recent times, as it looks set to deploy more than $500m.
Brooks said Intel Capital would generally invest $300m to $400m annually, although in years like 2015, where it found more opportunities, it would invest more, and if it could not find enough opportunities “it was not going to be bashful giving money back to the corporation”.
Brooks laid out his strategy, which he views as a triangle involving research and development, venture investing and mergers and acquisitions – Brooks is also head of M&A. He said one of the biggest changes he would be making was more actively leading rounds, especially at the later stages, where it has often followed other lead investors, although it would continue to be active at early stage. This means Intel Capital is likely to invest more in individual deals, although invest in fewer transactions.
The interaction between corporations and entrepreneurs provides value to all parties.
The entrepreneurs stand to develop relationships between both Intel and its corporate network. For example, Mio Babic, chief executive of iStreamPlanet, a sports streaming company backed by Intel Capital, which was sold to Time Warner this year for a reported $200m, said it had secured a key corporate customer from a meeting at one of the group’s technology days – global networking events run by Lee Sessions and an Intel Capital team dedicated to ensuring both entrepreneurs and corporations are securing useful business relationships.
Many corporate venturing executives equally love the opportunity to vet the cutting-edge portfolio backed by Intel Capital, with a half-serious joke made by a corporate attendee that he had tried to meet the entire portfolio.
With this approach, Intel Capital gathers a huge group of startups via investments, as well as corporations, all doing business with Intel. It simultaneously receives the marketing kudos for linking itself and its ecosystem with the technology companies of the future.
The investment strategy in terms of sectors the group will be backing looks set to continue to cover the gamut of areas strategic to Intel, with Brooks joking to press, when asked in which sectors he planned to invest, that he should get Arvind’s slide – a presentation familiar to anyone who has seen Sodhani speak – which covers numerous areas, including the data centre, internet of things, cloud, cybersecurity, and many others. Brooks referred to his Michigan background when expressing his enthusiasm for the connected car, and talked about his enthusiasm for flying drones.
It seems to be business as usual at Intel Capital, and many eyes will be on what happens under Brooks’s leadership. Given he has had one year at Intel, and has already sealed the business’s biggest investment, acquiring chip company Altera for $16.7bn, many are speculating he is likely to be an effective operator.