Germany-based software provider SAP has committed a further $250m to its eponymous corporate venturing unit’s fund of funds operation.
SAP Ventures, which is looking to become independent later this decade, now manages $405m in its Hana programme to commit to early-stage venture capital funds, such as SV Angel and August Capital, around the world.
SAP Ventures also makes direct investments in later-stage companies out of its $353m fund.
Nino Marakovic, chief executive of SAP Ventures and a member of the Global Corporate Venturing Powerlist 100, said it was tasked with “identifying cool companies in enterprise IT over the next five to six years”.
However, rather than try and pick winners in early-stage deals itself, by committing to specialist third-party venture funds SAP could get a “better noise-to-signal ratio” globally, he said.
Marakovic added that VCs received money, his ventures team screening deals that might be suitable and business support from SAP to portfolio companies. In return, SAP “influences the entire early-stage ecosystem” to use its Hana software, although the VCs are under no commitment to do so.
By doing direct investments later, Marakovic said SAP Ventures could “pounce when they are ready for growth funding”.
Longer-term, Marakovic said SAP would remain the sole limited partner to its ventures unit for its second, direct-investments fund but it would potentially let in external investors to a third fund.
SAP Ventures is hiring “dozens” more people to build up its coverage in the US, Europe and Israel and at least some of the so-called Bric countries, especially India.
Marakovic said: “We are building a huge infrastructure that most corporations are just not able to do. We will not accept outside LPs in our fund of funds or our second [direct] fund but will do so in our third. Our independent structure will let other corporations in.”