Where Is The CVC Industry Headed?
Insights from GCVI Summit 2020
Through its maturation and evolution over the past decade, corporate venture capital as a strategic business tool has completely taken off in recent years, affecting and accelerating the interplay between corporate entities and the startup ecosystem. In fact, according to PitchBook, global CVCs participated in over 1.3K VC deals in the U.S. in 2019, with total deal value reaching $53B.
As we see it, there’s no better place or time to swap CVC intel and best practices than at one of the largest CVC-centric conferences around — The Global Corporate Venturing Innovation (GCVI) Summit — which took place this past month in Monterey, CA.
This annual event has seen tremendous growth in recent years and now brings together 800+ professionals in the corporate venturing and innovation professionals ecosystem. As we found ourselves surrounded by some of the best and brightest in CVC, it was very interesting to gauge how business leaders are thinking about and leveraging CVC and other venturing mechanisms (e.g., incubators, labs, venture studios) to gain access to new technologies and accelerate innovation.
Silicon Foundry @ GCVI
At GCVI, Silicon Foundry’s CEO, Neal Hansch, and Partner, Steve Gotz, had the opportunity to exchange insights on stage with two Silicon Foundry Members, Delta Air Lines and Delight Ventures. During our conversations, we dove into several prominent themes currently circulating around the CVC world, such as:
How should corporations approach international investments in a region like Japan? What role should airlines play in creating seamless travel experiences that extend far beyond the time customers spend in the airport and on the plane?
Also at the conference, both Steve and Ludovic Ulrich (another Silicon Foundry Partner) led an interactive workshop focused on the rise of venture studios, where the conversation touched on several topics including the challenges, dynamics and economics associated with this evolving model. During the discussion, we had the opportunity to hear from several participants including UNION Labs, a HardTech venture fund, and High Alpha, a B2B SaaS venture studio, on their perspectives and direct experiences running a startup studio.
For further context, venture studios (as we know them today) have existed in one form or another for at least a decade, but up until recently only a handful existed (e.g., IdeaLab, Rocket Internet and Betaworks). In our opinion, the most effective startup studios are focused and intentional about validating an opportunity and then strategically identifying the best team of entrepreneurial athletes to maturely and methodically pursue the opportunity. For more background on this topic, check out one of our past articles: Rise of the Venture Studio.
What’s Next for CVC?
Coming out of GCVI and looking back on 2019, we’ve recognized that the velocity at which digitalization has pushed boundaries in all industries has ultimately enabled corporate enterprises to more efficiently embrace the opportunities in CVC, ultimately maturing the CVC construct as we know it.
As we look ahead in 2020, the following are three trends we predict will continue to infiltrate the CVC industry:
- New Channels. CVC will see an increase in utilization of new approaches and channels — especially venture studios/builder programs — to tap both intrapreneurship and external innovation for ideating and launching new ventures, as well as to complement a CVC unit’s pipeline of investments.
- Raising the Bar. We will see the further maturation of CVC arms as it relates to the level of sophistication and approach they take when engaging with startups and navigating complex deal terms and the overall ecosystem.
- Collaboration is the New Competition. There will be an escalation in cross-industry collaboration and partnership, as CVC units join forces with one another around digital opportunities that span vertical markets.