Mark Muth, formerly of Unilever Ventures, has been appointed as a director of professional services firm PricewaterhouseCoopers’ London-based corporate finance team, and will seek to advise European corporate venturing units on a range of services, he told Global Corporate Venturing.
Prior to joining PwC, Muth was a director of Unilever Ventures, the corporate venture capital arm of consumer goods company Unilever, for 11 years from 2002, before which he was a managing director at General Electric’s investment subsidiary, GE Ventures.
PwC is in the process of building up a practice that can operate as a fully integrated service, adding corporate venture capital to its advising services dealing with private equity and corporate M&A, two sectors where it has extensive experience.
“What occurred to us at PwC is that we can get involved in the front end of corporate venture capital establishment,” Muth explained. “We can help those companies that do not have a corporate venture capital business think through their strategy for the business – what are the objectives, what are they doing now in innovation and what are their other innovation initiatives – and help them decide if they want to start up a corporate venture capital unit.”
Several corporates have gone about their venture capital investments in an ad hoc manner without devising a concrete strategy first, Muth added. It is necessary to set firm strategic objectives and to align the unit with them in terms of staffing, as well as the legal, regulatory and tax elements with which PwC is familiar.
This is often why those units fail to succeed, though overall, corporate venturing is currently in a healthy state, he stated.
“The market is very healthy,” Muth said. “There is clearly a lot of growth, an impression which is based on the number of inquiries we are getting both in our London office and in America.
“The idea has really caught on and a lot of companies that do not have corporate venture capital units are seriously considering it. There could potentially be very strong growth in the next two or three years. An argument could be made that corporate venture capitalists are stepping into the shoes of traditional venture capitalists because of the value they can bring to the investee company through their own network.
“If you look at returns on traditional venture capital, they have not been great as an industry frankly,” Muth added, explaining that “traditional venture capital” referred to early-stage investment, as opposed to later-stage funding or buyouts. “Only a handful of venture capitalists have really done well.”
Part of the current environment surrounding corporate venturing is that the presence of several large firms in Europe has made the overall space more geographically diverse than straight venture capital, which continues to be centred very much on California. It also potentially provides more scope for geographic expansion.
“There has always been a tendency for venture capital and private equity innovation to take place in America, but I think corporate venturing is pretty well established in Europe, though there is plenty of room for growth,” Muth said.
“There will be US companies that have active corporate venture capitalist units in the States that will want to set up an office in Europe. Likewise, we have seen Asian companies and European companies setting up in America [though] Silicon Valley is clearly a magnet for technology-based businesses.”