James Mawson, editor-in-chief of Global Corporate Venturing, asked a panel to discuss how to scale corporate venturing activities.
The panel included Jonathan Bullock, chief operating officer and managing director of telecoms group SoftBank, which made the first close of its Vision Fund at $93bn just before the symposium; Ana Segurado Escudero, director of Open Future at Spain-based telecoms firm Telefónica; and Heidi Roizen, operating partner at venture capital firm DFJ and independent director at UK-listed publisher Daily Mail and General Trust.
Roizen picked up on a discussion from an earlier panel about value, explaining that DFJ was keen to collaborate with CVCs because they had a strategic motivation lacking in traditional VC investors.
“Money is a commodity,” Roizen observed, and while bringing cash to the table was nice, everyone had capital and it was the expertise that really made a difference.
What DFJ did care about was process – if it took longer than six weeks for a CVC unit to approve an investment, DFJ would walk away as the market was too competitive and fast-paced and a deal could easily be missed.
Segurado explained that Telefónica’s approach relied on its Open Future accelerator network, which ran 11 programs across the globe with a 100-strong headcount to manage the near-600-strong portfolio incubated at its Wayra centres.
Segurado also noted the importance of open and collaborative innovation. Telefónica’s CVC unit, Tele-fónica Ventures, approved deals on a case-by-case basis but always required the approval of an internal business team. The approach guaranteed engagement from a relevant team. Additionally, Telefónica did not require or want exclusivity and aimed to steer startups away from relying on its business, an attitude reflected in the fact that the corporate generally did not lead rounds and preferred a financial partner.
Bullock took the opportunity to dive briefly into the SoftBank Vision Fund. He said the vehicle could not be considered a VC or private equity fund in the traditional sense, adding: “To compare it with a traditional VC fund is to misunderstand our strategy”.
SoftBank would continue to invest in other strategic ventures where a corporate would aim to partner early-stage VC firms rather than compete with them in deals worth less than $100m. The Vision Fund –with outside funding from Middle Eastern states and corporations, including Apple, Sharp and Foxconn – would focus on growth-stage companies that would receive cheques in the region of at least $100m.
Bullock pointed to Europe, where there was a gap in series C and D funding, as a particular area SoftBank was keen to cover. Its most recent deal included more than $500m for UK-based Improbable. He added that he hoped the industry would evolve to be more diverse, welcoming the fact he was on stage with two women.
In respect of incentive pay, Roizen said carried interest was a very long game and corporations needed to be aware that people tended to do what they were paid.
Mawson ended the discussion with a question on which regions and sectors we should watch. While Roizen chose autonomous vehicles and Silicon Valley, Bullock pointed to autonomy and artificial intelligence in Asia, and Segurado cited cybersecurity and Silicon Valley.
Above: Ana Segurado, Telefónica, Jonathan Bullock, SoftBank, and Heidi Roizen, DFJ