Thesis in Pieces #1 — Ground Truth

I recently switched to a full-time investment role at Samsung NEXT. To learn more about our activities at the Tel Aviv office, I’d recommend first reading the blog post by our Managing Director Eyal Miller.

The ventures team at NEXT seeks to invest in software and services startups from pre-seed up to Series B. Our investment structure is flexible (equity, SAFE, CLA, SAFT), and the principle which guides us is “financially driven for strategic purposes.”

Our investment charter

Samsung has multiple investment arms and each has its own charter. Our fund was established to facilitate engagement between Samsung and early-stage startups building software and services products. We look to identify companies that would be market leaders but also have the potential to impact Samsung and the broader tech ecosystem. We seek to work with startups who can leverage Samsung’s ecosystem of products and its global distribution channels.

Samsung Next does not belong to one specific business unit, that gives us three main advantages over other CVCs:

• We have the ability to move quickly and sign investment agreements as fast as a traditional VC would, and sometimes even faster.
• We do not ask for special terms as a typical CVC would (our approach is actually quite the opposite.)
• Investment decisions are made internally within Samsung NEXT and do not require a commercial agreement or a business unit’s approval.

Understanding our process

Our organizational relationships and internal insights help us to understand Samsung’s priorities. With that information, we know which market trends Samsung finds important and the value that innovative startups can offer. This allows us to identify early-stage companies that could impact Samsung while also creating a beneficial collaboration for startups.

As venture investors, we invest under the assumption that only winners will have the opportunity to scale significantly and provide strategic value when startups and Samsung get to the point where they can seriously work together.

The bottom line is that we’re looking for financially viable software and services startups with a unique innovation or differentiator. The potential to generate collaboration between the startups and Samsung is also key to our decision-making process.

How can we work together?

We understand that many founders believe working with corporates can be challenging, however, we can create a lot of value if expectations are managed well.

As a multinational fund, we have a global presence ranging from the US and Europe all the way to Southeast Asia. As the adage goes “it’s who you know…” so, we offer an international network of vital relationships in hubs that are important to a startup’s growth and success. We also have a platform team offering resources around HR, business development, marketing, and PR. In addition to our internal team, we work with global service providers populated with world-class talent to benefit our portfolios.

As an investor, it is our job to be your evangelist, guide, and mentor within Samsung to ensure that we identify the opportunities as they arise and provide the best possible conditions for making collaborations happen. Most importantly, we treat our portfolio companies as partners and work with them to help them scale and succeed globally.

In the following posts, I will share more about our investment theses in security, privacy, cryptography and synthetic media and the types of companies we are looking to invest in.