Everything You Need to Know About Corporate Venture Capital in 2017

Two years ago, the diversity-inclusion-machine-learning startup I worked for inspired me to explore use cases for artificial intelligence (AI). My research led to my AI series on Huffington Post. And, a month before starting my MBA last year, that landed me an invitation to the first AI World Conference in San Francisco, where in an interview, members from the Qualcomm Ventures team explained to me how corporate venture capital (CVC) helps push innovation through investments in AI and other technologies. That blew my mind.

Before then, my exposure to venture capital came from brief introductions to VCs investing at the startup I was working for, and from a few friends telling me about their enrollment in very expensive programs, such as the 500 Startups VC Unlocked Program and the Kauffman Fellows Program. And up until the AI World Conference, VC or CVC wasn’t of interest. That changed after my conversation with Qualcomm Ventures; it made me want to learn more about this elusive world of VCs that spends its time betting on the future.

Excited to explore my prospects in the field, I decided to make VC my MBA focus. I jumped into the world of traditional VC funds through an internship at K Fund and explored the world of CVC funds through the IE Venture Capital Executive Program. Here I share what I learned at K Fund and, in this post, I share my CVC snapshot:

  • CVC Firehose
  • The Numbers & Lists
  • CVC Leader Analysis
  • A Closer Look at the Top 3 CVCs
  • CVCs Investing in AI
  • Additional Resources

CVC FIREHOSE

Brush up on your Corporate Venture Capital History. Get your bearings on Corporate Venture Capital Versus Institutional Venture Capital with Rita Waite. If you want more, then read CB Insights’s Corporate VC vs VC: Corporate Venture Capital’s Priorities Differ From Institutional VCs.

For the curious: Once you have the basics, I recommend you read up on the Rise of Corporate Venture Capital, Eliot Peper’s Inside Corporate Venture Capital, and The 55 Most Active Corporate VC Firms Globally.

For entrepreneurs: Here are some Myths About Corporate Venture Capital you should be aware of. Also, you may find Suranga Chandratillake’s Entrepreneur’s guide to corporate venture capital helpful. If you’re a Startup Seeking Funding You Should Consider Corporate Venture Capital.

For future CVC buffs: There are those (on Quora)who ponder: Is there an Opportunity to Help Large Companies Establish Corporate Venture Arms? Rita Waite puts her money on CVC in her post on The Value of Corporate Venture Arms. You should know, that according to BCG Digital Ventures, it’s The Time for Corporate Venture Capital. Eric Budin is also bullish and states that there are Many Happy Returns Corporate VCs Can Score today.

THE NUMBERS & LEADER LISTS

Let’s talk about CVC Q2 2017 numbers. This year, the majority of deal size lands between $10 and $25M (versus $1-$5M in institutional VCs).

Number of deals are in the 300s.

Source: PitchBook-NVCA Venture Monitor *As of 6/30/2017

And the greatest amount of money is going into software deals (this is similar to institutional VCs).

CVCs are on the rise and so are funding trends. Today, 75 of the Fortune 100 are active in corporate venturing, and 41 have a dedicated CVC team; and according to Telstra CVCs are on the rise.

Source: Telstra CVC Paper

Between 2014 and 2015 financing rose almost 70% to $28.4B. Funding wasn’t too shabby in 2016 and landed at $24.9B.

Source: CB Insights. Dollars are for deals involving CVCs, which often involve non-CVC investors as well. CB Insights.

CVC 2017 Leaders include GV, Microsoft, Bloomberg, Qualcomm Ventures and more.

In 2016, these were the CVC leaders (they all remained on the list in 2017).

Source: CB Insights

CVC LEADER ANALYSIS

Based on my Crunchbase analysis, below are the number of investments, exits, leads and portfolio companies per CVC.

Source: Crunchbase *As of 08/05/17.

A CLOSER LOOK AT THE TOP 3 CVC

Let’s take a closer look at Intel Capital, GV, and Qualcomm Ventures activity.

Intel Capital

Intel Capital is a +$1B fund which has made 1,173 investments over the last 26 years. It focuses in tech investments targeting the enterprise, mobility, consumer internet, digital media, and semiconductor manufacturing sectors. Intel Capital’s favorite categories include: enterprise software, mobile, and manufacturing. It’s top co-investors include: New Enterprise Associates, Sequoia Capital, and Accel Partners.

Source: Crunchbase

Intel Capital’s latest investments include Punchbowl, Lightbend, HyTrust, Inpria, spotinst, and Element AI.

Source: Owler

GV

GV is a $1ooM fund which has made 500 investments over the last 9 years. It focuses in investments targeting life sciences, healthcare, artificial intelligence, robotics, transportation and more. GV’s favorite categories are mobile, enterprise software, and internet. It’s top co-investors include: Kleiner Perkins, SV, and Andreessen Horowitz.

Source: Crunchbase

GV’s latest investments include Wonderbly, IonQ, Desktop Metal, Segment, Evelo, and Brandless.

Source: Owler

Qualcomm Ventures

Qualcomm Ventures has been around for 17 years and has investment size ranges between $500K to $10M. It focuses on startups developing next generation technology, such as: Mobile, AR/VR, IoT, AI/Machine Learning, Robotics, and more. Qualcomm Ventures favorite categories are mobile, enterprise software, and internet. It’s top co-investors include: Accel, Bessemer Venture Partners, and New Enterprise Associates.

Source: Crunchbase

Qualcomm Ventures’ latest investments include: prospera, brain corp, Particle, Reach Robotics, edico genome, and Sense 360.

Source: Owler

And here’s a snapshot of Qualcomm Ventures’ most recent successes:

CVCS INVESTING IN AI

Naturally, my interest was peaked when I saw that 2 of the top 3 CVCs are investing in AI. Let’s explore that some more on that.

GV and AI

As you can see from the snapshot below, GV is investing in AI. However, according to TechCrunch, Alphabet is shifting its artificial intelligence investing efforts to a new fund: Gradient Ventures.

Source: GV

Crunchbase listed the following AI investments under GV.

Source: Crunchbase

Qualcomm Ventures and AI

Qualcomm Ventures is making big bets in AI. Last year it made a $30M investment in Clarifai. Most recently, they invested $15M in Prospera. I expect Varun Jain and Quinn Li to continue on their AI investment trail.

Source: TopBots

Crunchbase listed the following AI investments under Qualcomm Ventures:

Source: Crunchbase

ADDITIONAL RESOURCES

By this point, you should have a high-level understanding of the CVCs. I’ll leave you with a few resources I enjoyed most while compiling this post:

So, what’s next? There’s a chance I’ll write a little bit more on CVCs because they’re an interesting vehicle for innovation.


Please remember to ❤️ this post, share it with your network and follow me if you enjoyed it!

Author: Lolita Taub is a TEDx speaker and keynote, a World Economic Forum Global Shaper, an artificial intelligence enthusiast, and an enterprise tech professional. MBA @IEbusiness. Formerly @IBM @Cisco @KFundVC.