“Starting a new CVC unit was both a challenge and an opportunity because there was a completely clean sheet and the ability to shape it from the ground up, leveraging learnings from the entire CVC and VC worlds,” Bonny Simi, president of JetBlue Technology Ventures (JTV), the strategic investment arm of US-based airline operator JetBlue Airways, told Global Corporate Venturing.
Corporate venture capital (CVC) had somewhat of a turbulent past, so before Simi started devising the unit in late 2015, she interviewed CVC and VC industry experts to learn from their experience. As she read and researched more extensively on the topic, she started to shape best practices in a bid to deliver financial and strategic results for the parent company more efficiently and effectively. Key learnings included building a team with both industry and parent company expertise, as well as those from the venture community. This led to a balanced approach to pre-investment due diligence and wiser investments.
Another way Simi built balanced strategic and financial discipline was to include outside members on the JTV Investment Committee. Jim Adler, managing director Toyota AI Ventures (TAIV), the Japan-based carmaker’s corporate venturing division, joined the JTV investment committee in February 2018.
Adler founded TAIV in July 2017 and is concurrently an independent member of JTV’s investment committee. He provides insights on a variety of topics including engaging with corporate parent and entrepreneurs, as well as paying attention to short-term and long-term views.
As a result, JTV and TAIV co-invested in aviation vehicle developer Joby Aviation’s $100m series B round in February 2018, led by Intel Capital, the US-based chipmaker’s corporate venturing arm.
On the qualities a corporate venturing unit’s leader should have, Simi said: “One of the key things that newcomers to corporate venturing need to consider is that the leadership of the CVC arm has to include two important elements – which are usually not found in the same person.”
“One element is deep knowledge of the industry and an understanding of how to get things done internally at the parent company. We are a CVC, not a VC, so ideally, we need someone who understands the ‘C’ part – someone who has worked for five to 10-plus years at the parent company and (or) the industry who can bring that industry expertise to the table.
“You also need to have an understanding of the VC part from a traditional venture background – it is a merger of ‘C’ and ‘VC’. Very few people have both elements, so building out a leadership team that has both elements is important.” JTV effectively counts on both Simi and managing director operations and partnerships Amy Burr’s and managing director of investments Raj Singh’s combined efforts.
Simi had been working for JetBlue Airways since 2003, first as a pilot for three years, before shifting to oversee areas including airport planning, customer service, customer experience analysis and human resources. She was tapped to lead JTV in early 2016.
Singh had been a VC investor for half a decade from 2001 in the UK and the US at Bahrain-headquartered assets investment firm Investcorp, conducting equity and debt financing for portfolio companies and raising funds for two VC vehicles totalling $530m. Singh had also co-founded Pervasive Technology Ventures as a general partner and built tech startups as an entrepreneur.
Amy Burr joined JTV in mid-2018 from airline operator Virgin America where she had spent more than a decade in a variety of positions since the company’s inception, such as corporate strategy and sales strategy, before leading the firm’s merger efforts with Alaska Airlines in 2016. Burr leads JTV’s operations team whose members have industry experience and act as liaisons between portfolio companies and JetBlue.
Before joining JTV, Simi had been head of talent for more than four years at JetBlue, hiring officers and directors, and that experience helped her identify the right talent for JTV and navigate the parent organisation with ease. She said: “Raj has a venture and tech background while Amy understands the travel industry well. Having that combination of industry expertise and venture expertise is vital to a CVC’s success.”
Understanding the parent company’s financial metrics and having senior leadership support – not just from the chief executive and chief financial officer, but a collective C-suite endorsement – is also extremely important for a corporate venturing arm’s survival, Simi stressed, because the corporate’s leadership team can change at any time.
Simi is confident that the CVC industry as a whole is a warm and synergetic community, citing having Toyota AI Ventures’ Adler on JTV’s investment committee. JTV has also invested with Amadeus Ventures, the corporate venturing arm of Spain-based travel technology provider Amadeus IT Group, in airfare forecasting platform FLYR.
As well as Toyota AI Ventures and Amadeus Ventures, JTV works closely with Airbus Ventures and Boeing HorizonX Ventures, subsidiaries of aerospace technology producers Airbus and Boeing, as well as many other CVCs including Intel, Verizon, Munich Re, Sony, International Airline Group (IAG) and Qantas Airways.
Simi concluded: “It is in everybody’s best interest for us all to help each other. The nice thing about CVCs is we really do not compete against each other. It is common for CVCs from competitive parent companies to work with each other and co-invest.
“In that sense, newcomers should set up meetings with more seasoned CVCs after having done their homework – researching and reading up on CVC reports. They should not be afraid of seeking veterans’ advice, but they must also be aware that there is no one-size-fits-all approach.”
