AI Era Venture Capital: Collaborative Transformation
Cathay Innovation adds advisory to its global VC platform to fuel open transformation of large corporations with emerging startups.
“If you want to go fast, go alone; but if you want to go far, go together.”
AI has emerged as the defining transformation technology of our time. But in the AI era, the role of startups has fundamentally changed — moving from disruption to transformation — and industry lines have been blurred, questioning the longevity of established players that stay idle. To compete in this new hyper competitive AI landscape — it’s the companies who hold both the data and the technology that wield the most power.
The path forward is clear: startups, developing the latest technologies and cutting-edge AI solutions, and large corporations, with vast data stores, resources and distribution, must come together to transform and claim a seat in the markets of tomorrow. Collaboration is the new currency of survival and success.
At Cathay Innovation, we’ve embraced this ethos since day one. As a global VC firm founded in Paris in 2015, we invest in outstanding founders across Europe, North America, Latin America, Asia and Africa. Recognizing that startups are just one crucial piece of the puzzle, we incorporate a committed corporate ecosystem into our model as both financial investors (LPs) and strategic partners — backed by 20+ leaders from the Fortune500 in healthcare (Sanofi), financial services (BNP Paribas), consumer (Pernod Ricard, Groupe SEB and M6 Group) and energy / mobility (TotalEnergies, Valeo, Vale & ADP) and more.
Back then, our vision was twofold:
- Accelerate startup growth through direct access to corporate players for strategic partnerships, industry expertise, and market opportunities.
- Enable corporate innovation by connecting established leaders with emerging startups driving the next wave of technologies and business models.
This ecosystem approach to venture capital has been a core factor in our success. With $2.5B in AUM, we’ve launched three flagship funds (the latest Cathay Innovation Fund III — a $1B investment vehicle), regional and sector-specific vehicles, and invested in over 100 startups worldwide like Chime, Pinduoduo, Glovo, Ledger, Owkin, FinAccel (Kredivo) and much more.
Today, we announced the launch of C.Lab, our new strategic advisory arm out of San Francisco — dedicated to helping international corporations with the open transformation of their organizations. Below, I’d like to share why along with the larger vision for Cathay Innovation and our role in the global venture capital landscape in the new AI era.
FIRST, STARTUPS & CORPORATES — THE AI EFFECT.
Ever since the birth of Microsoft in 1975, the tech game has been focused on incremental productivity gains — building software layers to optimize existing business models. This worked by achieving high gross margins, multiplying in scale in the Internet age leading to a race to capture the largest market share.
But the rise of AI has fundamentally changed the game.
AI, like electricity, is a general-purpose technology — one with the potential to transform every facet of business, from operations and decision-making to customer experiences and entire business models. Startups are positioned well, able to operate essential services (like banking) not only at a fraction of the traditional costs, but with the agility to integrate next generation AI-enhanced capabilities.
However, Big Tech is on the move — like Amazon’s entrance into healthcare, Google with autonomous vehicles, Apple in Financial Services or Tesla in energy. Leveraging their financial resources, technological expertise and vast data stores, Big Tech is not only going after the traditional startup battleground of software, but expanding into core industrial processes, eroding the differentiation and relevance of established industry players. This puts both startups and corporate leaders in a corner, facing an existential question on survival in a new hyper competitive landscape that has been reshuffled by AI.
In this new era, the stakes are higher. Incremental improvements are no longer enough and startup “disruption” has taken a backseat. Success depends on collaborative transformation between startups and corporates — a shift from competition to partnership.
CATHAY INNOVATION — 9 YEARS IN THE MAKING.
At Cathay Innovation, first and foremost, we are investors. But today, being an investor holds far more responsibility than providing capital for founders and delivering financial returns to LPs. Given our position at the center of startups and corporates, we see it as our job to identify innovative solutions to business (and macro) challenges — whether it’s finding new levers for growth, new ways to optimize operations or leveraging new technologies to tackle larger issues like climate change or financial inclusion.
Over the last 9 years, we’ve developed a venture platform that brings value to both sides:
- Our investment team is deeply embedded in local startup hubs and armed with global resources — helping founders reach new markets, partners, customers, investors, industries and insights.
- Our dedicated ecosystem team understands the needs and goals of our strategic partners — helping corporate leaders innovate through co-investment and commercial business development opportunities, supporting CVC teams and providing proprietary research or going deeper with co-creation and tailored, vertical funds.
- Our sustainability framework integrates important considerations around ESG and impact into all activities.
With Fund III, we formalized our greater purpose in accelerating the sustainable transformation of industries & society — requiring both innovation from startups and adoption from corporations.
Enter C.Lab: A Catalyst for Open Transformation.
Today, Cathay Innovation takes another step toward this purpose with the launch of C.Lab, our new strategic advisory arm based in San Francisco. C.Lab offers a range of expanded services designed to support the long-term growth, resilience and open transformation of global corporations.
The lab is led by Matthieu Soulé and Arnaud Auger, joining from BNP Paribas (a longstanding investor and partner to Cathay Innovation), where they spent the last decade advising large corporate clients in the mobility, energy, financial services, retail and health sectors on their innovation and business strategies.
See the official press release for more detail, but at a high-level C.Lab helps top level executives understand and navigate the latest tech trends and biggest opportunities at the cross-section of industries while identifying key players and startups to partner with, invest in or acquire that solve for key business challenges. Importantly, based in San Francisco — the epicenter of the AI revolution — C.Lab helps corporate execs from anywhere tap into the cutting-edge innovation out of the US tech and startup ecosystem along with other major hubs thanks to Cathay Innovation’s global footprint.
CATHAY INNO + C.LAB — THE WHY
C.Lab complements Cathay Innovation’s investment platform by delivering deeper engagement with corporations. We see this as a value enhancement for all stakeholders:
- For Startups: Broader access to industry-leading corporations for partnerships critical to scaling AI-driven innovations.
- For Corporations: Expanded and highly tailored advisory services to accelerate business transformation.
- For our Investment Team: A shared knowledge base of industry trends, emerging technologies and opportunities ensures Cathay Innovation remains at the forefront of global innovation.
While C.Lab operates as a distinct activity, it closely integrates with our venture practice to deliver insights, identify opportunities, and collectively drive impact in our key sectors.
Looking Ahead — A New Model for the Future.
In the AI era, the future rests on collaboration — and on ensuring its benefits are widely shared . Startups, empowered by AI, are poised to take on larger roles in core business operations, unlocking new opportunities for innovation and growth. However, these startups need access to proprietary data, industry expertise, and substantial funding — assets large corporations can provide. At the same time, large corporations face immense pressure to adapt to AI. By collaborating with agile startups, they can accelerate their transformation journeys, ensuring they remain competitive in an evolving landscape.
But transformation is not confined to business success alone. It extends beyond industries with the potential to reshape society itself. By leveraging technology responsibly and ethically, we can drive change that creates more sustainable industries and ways of life — addressing macro challenges like health or climate crises, safe and equitable employment or global inequality and inclusion.
The mutual dependence between startups and corporates creates fertile ground for innovation, driving a new model of partnership. We believe the convergence of VC, startups, corporate innovation and AI presents a once-in-a-generation opportunity to jointly shape the industries and society of tomorrow. At Cathay Innovation, we aim to deepen collaboration, foster open transformation, and empower startups and corporations to co-create the future — leaving a lasting, positive impact. Together, we can unlock the full potential of AI.
