At the end of the year, and with a host of insights shared by the community through the GCV Leadership Society’s annual survey, it is worth reflecting on the impact the corporate venturing industry is having. The newsflow has been quieter than usual this past month following the Thanksgiving weekend in the US. That, however, does not mean there has been a lack of big stories, such as tobacco maker Altria said to be seeking an expanded footprint in the e-cigarette market through a proposed investment in Juul, which is reportedly valued at $16bn.
But one of the interesting emerging areas of tension is the challenge of trust and how investments in the future could bring unintended consequences. Juul was set up to help the billion smokers switch from cigarettes, but has drawn attention for effectively encouraging a younger group to start vaping through different flavours.
The issue of consequences and impact is drawing attention from the investors who back the parent companies of the largest corporate venturing units. Digital agency Edelman released results from its Trust Barometer Special Report: Institutional Investors, which surveyed more than 500 chief investment officers, portfolio managers and buy-side analysts in five countries, representing firms that collectively manage over $4.5 trillion in assets.
Among the findings is that 98% of respondents think public companies are urgently obligated to address one or more societal issues, with cybersecurity, income inequality and workplace diversity being top priorities.
In a book – Corporate Venturing Survival Guide, to be published in January at the GCVI Summit by Heidi Mason and Liz Arrington at Bell Mason Group, in conjunction with Global Corporate Venturing – a series of case studies explores the different metrics and frameworks used by top CVCs to develop as units mature. But the book also casts an eye over the history of corporate venturing and maps out a potential future where the issues of risk, return and impact become increasingly important.
Also at the GCVI Summit in Monterey, California, at the end of January will be a private roundtable on behalf of the United States Agency for International Development – with $27bn, one of the world’s largest development agencies – to explore how governments and corporations together can “mobilise the power of practitioners around corporate venturing for impact”.
There is approximately $22 trillion in cash, cash equivalents and short-term investments on corporate balance sheets and while CVC remains a small fraction of these assets its power is magnified by enabling entrepreneurs to change the world. Governments have multiple responsibilities, but keeping people safe while encouraging future high-paying jobs in their jurisdictions remain two of the highest.
Attempting to square the circle, Amgen-backed Wuxi NextCode has not only raised $200m in a series C round led by Irish sovereign wealth fund Ireland Strategic Investment Fund, but also acquired Genomics Medicine Ireland, a genomics platform backed by GV, in a deal that is expected to be worth a total of $400m once milestone payments are made.
Wuxi NextCode has big plans for Genomics Medicine Ireland, not least a genome sequencing program that will attempt to sign up 400,000 volunteers, or one in 10 Irish citizens, but behind the move is the thinking from the Irish state-owned fund that improving its population’s health will bring huge benefits in reducing healthcare bills and potentially in productivity – let alone the more immediate benefits from jobs.
It is smart strategic thinking at the highest level from Ireland’s fund, but they are not alone in realising the impact that can be made by lifting the sights from purely short-term financial ones.
Our sights for the next few weeks will remain focused narrowly on the year-end and preparing our annual review, World of Corporate Venturing, as well as our GCV Rising Stars awards, both to be published at the GCVI Summit in Monterey – expected to sell out for its fourth year – but my thanks to all the society members, readers and attendees for their advice, feedback and support to enable us to continue trying to improve.
