We’ve all heard good and bad about Corporate Venture Capitalists. They have a reputation for being slow at making decision making and only offering their support in exchange for very strict clauses. However, Corporate VCs offer both generous investments and powerful industry partnerships, while also positioning themselves as a prospect buyer for potential exits.
Despite their shortcomings, Corporate VCs are a rising segment in the start-up landscape, with $50bn invested in 2018, up 28% from 2017. They appear to be getting better at understanding the startup mentality, both in the Silicon Valley and across Europe.
The Financial Times recently published their Top 10 of the most active Corporate investors based on Dealroom data indicating the number of rounds in which they participated and their total lifetime value.
Based in: Munich, Germany
Sub-Organization of: Siemens
Sectors: Energy, Healthcare, Technology
Notable investments: Barracuda Networks, ChargePoint, Fair
Offices In: Beijing, Boston, Tel Aviv, London, Munich, Palo Alto, Paris, Stockholm
What they say: “We’ve built Next47 differently, as a new style, 100% independent venture firm with access to the global resources and customer base of Siemens. We also have a worldwide team of 40 people with specific engineering, sales, support, and marketing expertise to help startups through the heavy lifting phase of their development.
And like all top-tier investors, we are incentivized to build something big. We move fast, make our own investment decisions, and are aligned with the teams we invest in; identical to a brand-name venture firm. In that way, we have not only the resources to contribute meaningfully to a smart syndicate but also the motivation to take every startup we work with to the next level.
Everyone wins: founders, financiers, and the employees working together change the world. Isn’t that what we want out of entrepreneurship? Because if it’s only about the take-out and tuck-in, then it’s time to rethink the model.”
“Next47 is an independent global venture firm committed to turning today’s impossible ideas into tomorrow’s indispensable industries. Our relationship with Siemens gives us access to international markets, a global customer base, and incomparable technical experience, all of which we use to catalyze our portfolio companies’ growth. We invest in entrepreneurs who think big and in companies that we believe will change the way the world lives and works.”
Robert Bosch Venture Capital
Based in: Stuttgart, Germany
Sub-Organization of: Robert Bosch
Sector: Engineering Technology
Notable investments: Graphcore, Movidius, AutoAI, Actility
Offices In: Stuttgart, Frankfurt, Sunnyvale (California), Tel Aviv, Shanghai
What they say: “With offices in Europe, Silicon Valley, China and Israel, we are working with Deep-tech companies worldwide. Having our investment sweet spot in early stage we are also looking into later stage companies, as well as seed-stage in selected cases. We prefer to syndicate our investments with existing or new investors in the company and can take the lead, co-lead or follow as necessary. Beyond the financial commitment, startups receive access to our vast network and support in commercial collaborations. Up to EUR 15m per Company for 5-25%, Equity Position and 100% Commitment”
Fund focus: “Autonomous Driving, AI / Deep Learning, IoT, Distributed Ledgers, Analytics, Next Generation Computer Architecture, AR / VR, Mobility Solutions”
Deutsche Telekom Capital Partners
Based in: Hamburg, Germany
Sub-Organization of: Deutsche Telekom
Notable investments: Jawbone, AppNexus, Lookout, i.am+
What they say: “We invest financial and strategic venture capital in European, Silicon Valley, and Israel-based technology companies. We look for technology assets with sophisticated intellectual property and differentiated business models with high disruption potential. DTCP is focused on revenue generating companies in the expansion stage, ideally with an annualised revenue run rate of multiple million euros.”
Fund focus: “Our current scope lies within the enterprise software and infrastructure, including Big Data, analytics, IoT, Cyber Security, Cloud & Network Infrastructure, and AI.’
Based in: Basel, Switzerland
Sub-Organization of: Novartis
Notable investments: Proteus Digital Health, Galera Therapeutics, Nabriva Therapeutics
What they say: “Foster innovation, drive significant patient benefit and generate superior returns by creating and investing in innovative life science companies. NVF is stage agnostic, engaging in investments from seed- to later-stage life sciences companies across Biotechnology/Biopharma. NVF manages over $800m in committed capital and more than 40 portfolio companies across North America, Europe, Israel and Asia/Pacific.”
Fund focus: “Our primary focus is on the development of novel therapeutics and platforms. In our investments we look for unmet need and clinical impact, novel proprietary science and understanding of mechanism, management and board experience and capital efficiency in the program.
We invest in North America, Europe, Israel and Asia/Pacific with approximately USD 800 million under management in committed capital and more than 40 portfolio companies. We continue our strategy of making larger focused investments and anticipate total investments up to USD 30 million per company over its life.
We make equity investments in Biotechnology/Biopharma life sciences companies. NVF is stage agnostic and engages in seed investments as well as later-stage investments. We typically lead or co-lead an investment and play an active role on company boards.”
Based in: Darmstadt, Germany
Sub-Organization of: Merck
Sectors: Science and technology
Notable investments: Bolt, Prexton Therapeutics, Grin Scooters
Offices in: Darmstadt, Amsterdam, Cambridge (USA), Yavne (Israel)
What they say: “We drive innovation and back entrepreneurs through equity investments and hands-on support in fields that could impact the vitality and sustainability of Merck. Our mandate is to invest in innovative technologies and products with the potential to significantly impact Merck Germany’s core business areas. From our headquarters in Amsterdam and offices in the US and Israel, we invest globally in transformational ideas driven by great entrepreneurs. We take an active role in our portfolio companies and team up with entrepreneurs and co-investors to translate innovation towards commercial success. We have a significant focus on early-stage investing and company creation including the creation of spin-offs to leverage Merck Germany’s science and technology base.”
Fund focus: “The fund has the mandate to invest in four sector-focused areas of Healthcare, Life Sciences, Performance Materials and New Businesses, in alignment with the strategic interests of Merck Germany’s business areas, though formally separated by a “Chinese Wall”. The total volume of the corporate venture fund is €300m.”
Based in: Zurich, Switzerland
Sub-Organization of: Swisscom
Notable investments: Quantenna Communications, SimpliVity, Symetis
Offices: Zurich, Bern, Palo Alto
What they say: “Swisscom Ventures is the venture capital arm of Swisscom AG, the leading telecom and ICT provider in Switzerland. Since 2007, we have invested in over 50 technology companies from our offices in Switzerland (Zurich and Bern) and the USA (Silicon Valley). We invest in 6-8 new companies every year representing a total volume of $30-50m p.a.
As a strategic investor, we offer entrepreneurs access a broad range of portfolio services in addition to financial support. Those comprise the use of Swisscom’s technical infrastructure but also access to market channels and key experts in the lines of Business.”
Fund focus: “Artificial Intelligence – Digital applications utilizing artificial intelligence technologies and that are deployable across various industry sectors including data-driven internet services
Cybersecurity – Advanced applications and tools to protect the integrity of networks, programs and data from attack, damage or unauthorized access
Telecom and IT Infrastructure – Next generation IT and cloud technologies that constitute the backbone and underlying enabler to the digital transformation comprising software, hardware and services”.
Daimler Technology & Venture
Based in: Stuttgart, Germany
Sub-Organization of: Daimler
Notable investments: Careem, FlixBus, Quanergy, SoundHound
Offices: Stuttgart, San Francisco, Beijing, Tokyo
What they say: “We are looking for startups and innovative technologies. In addition to its venture investment activities, the team is also responsible for technology and startup acquisitions for the Daimler Group. As a result, Technology & Venture is always on the lookout for innovative companies and technologies — globally and “stage-agnostic”. In other words, we are interested in all types of companies ranging from early stage start-ups to well-established technology companies.”
Fund focus: “Connected – By connecting our vehicles, we’re not only enabling our customers to access their cars; we’re also laying the foundation to offer new kinds of services.
Autonomous – Autonomous driving is redefining the role of the automobile. It will not only enhance safety and comfort, but also provide us with more free time which was previously spent driving.
Shared & Services – Owning, sharing, or renting — the mobility of the future offers greater flexibility. From car2go and myTaxi to the moovel mobility platform, we already offer our customers a wide range of shared mobility services. We are continuously expanding our range of offers.
Electric – It’s a sure bet that the future of mobility will be electric. In addition to the electrification of internal combustion engines, e.g. using plug-in hybrids, we aim to launch a large number of battery-electric vehicles, ranging from the smart to trucks.
Industry 4.0 – The potential of the digital revolution is huge: If human beings, machines, and industrial processes are intelligently networked, individual products of high quality can be created rapidly. Production and manufacturing costs can be made more competitive. The digitalization of the value chain is opening up a whole range of new potential and opportunities.
Customer experience – Every customer is unique, has distinct wishes, and utilizes specific communication/social media channels. Creating a good customer experience requires an approach that is completely individualized.
FinTech/InsureTech – Financing, leasing, insuring, and flexible ownership options — Daimler offers a wealth of financial services. As we continue to make the services more flexible, we are creating greater freedom for our customers.”
Based in: London, UK
Sub-Organization of: Santander
Notable investments: IZettle, Kabbage, Tradeshift, Curve
What they say: “We launched our $100m fund in July 2014 to get closer to the wave of disruptive innovation in the FinTech space. We aim to support the digital revolution to make sure Santander customers around the world benefit from the latest know-how and innovations across the Banking Group’s geographies.
The fund is part of the Santander Group’s broader innovation agenda, in which we help FinTech companies grow from a very early stage (i.e. seed) to a more mature stage.”
Fund focus: “Global reach – We want to help create sustainable companies by bringing them all the value the Santander Group has to offer. We have a global reach, with a particular focus in Iberia, UK, US and Latin America, where Santander has a strong presence in 10 major geographies serving over 107 million individual customers.
Vertical sectors – While we keep an open mind to all areas of FinTech, we focus on five key verticals which we’ve prioritised to bring the most value to our customers:
- Payments: We want to enrich our customers’ experience around the wallet and its ecosystem, both on the consumer as well as the merchant side.
- Marketplace lending: We’re looking to partner with marketplace lenders to allow us to provide alternative sources of lending to our customers, as well as using new data sources to provide better access to credit.
- e-Investment advisory: We aim to use online systems to distribute financial investment products with self-service and planning capabilities to our customers along their lifecycle, from university students to private banking clients.
- Client and risk analytics: We are looking for the next wave of ideas that will allow us to better predict the needs of our customers.
- Digital delivery of financial services: We understand our customers are changing the way they consume financial products, and we focus on enriching our value proposition to them, looking for opportunities in the areas of PFMs, Blockchain, API-based banking, insurance and more.
Investment size and stage: We can invest as little as $100,000 or as much as $10M (or even more if we believe it’s an exceptional opportunity). We invest in early stage companies with a product or service that is mature enough for us to take to our customers. We want to help these companies scale and grow by opening our bank and giving them access to distribution, expertise and brand.”
Based in: Munich, Germany
Sub-Organization of: Allianz
Sectors: Insurance, Finance
Notable investments: Go-Jek, N26, Lemonade, American Well, Wealthsimple
What they say: “We are investing in digital growth companies that are part of the ecosystems related to insurance. We identify and invest in the best digital frontrunners that are strategically relevant for the Allianz Group. We provide an interface between portfolio companies and the digital ecosystem within Allianz as well as drive innovation across Allianz’s operating entities and global lines of business. 5 continents, 15 current direct investments, €1 billion total fund size ”
Fund focus: “Mobility, Connected Property, Connected Health, Wealth Management & Retirement, Data Intelligence & Cybersecurity”
Based in: Bagsværd, Denmark
Sub-Organization of: Novo Nordisk Foundation
Notable investments: CoLucid Pharmaceuticals, Gloucester Pharmaceuticals, Galera Therapeutics
Offices: Copenhagen, Boston, San Francisco
What they say: “We are the holding company of the Novo Group and manage the investment assets of the Novo Nordisk Foundation. We invest in life science companies at all stages of development and in a broad portfolio of equity and fixed-income securities. €44bn Total assets of Novo Holdings at the end of 2018, €7.5bn currently invested in the life science sector. 300 + life science investments since 1999.”
Fund focus: “Seed: Identifying, building and investing in exceptional startups.
Ventures: Private and public venture investing in Europe and the US.
Principal: Sizable investments in leading life science companies.
Financial: Asset management with a clear and consistent philosophy.”