The Rise of Corporate Venture Capital; an Australian perpective

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Venture Forth The Rise of Corporate Venture Capital

Alfred Lo Lead Principal [email protected] / @apglo

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KNOWLEDGE OF WHAT IS P O S S I B L E I S T H E BEGINNING OF HAPPINESS

“

“- GEORGE SANTAYANA

Optus-Innov8 is a collaboration between Optus and Singtel Innov8 bringing together funding and resources for Australian

tech startups

EST. 2010

To help Singtel Group adopt open innovation, seek new growth opportunities, foray into new markets and strengthen its businesses

INDEPENDENT BOARD & DECISION MAKING

SINGAPORE SAN FRANCISCO

TEL AVIV

$200M initial fund size

SCOUT Act as a technology and innovation scout for the group

INVEST Identify and invest in promising companies which have synergistic value to the group

BUILD AWARENESS

Be the partner/investor of choice for startups

PARTNER Develop partnerships to accelerate incubation of new ideas

Tier-1 VCs Accelerators & Incubators

Telco VCs

NETWORKS ARE KEY

Internal Business Units

UNICORNS?

PRE-IPO TECH STARTUPS WITH

$1B+ VALUATIONS

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A RECENT PHENOM. THESE WEREN’T UNICORNS.

Source: Fortune

UNICORNS WITH CORPORATE VENTURE BACKING

Baidu Google Ventures

ComcastCoca-Cola Horizon

Salesforce in-q-tel Samsung Ventures

Visa Starbucks

Singtel Innov8Intel Capital Red Hat Salesforce Ventures Emc in-q-tel

Rakuten

656 CVC DEALS US$12.31B

IN 2014

2014

Source: CB Insights

US COMPANIES HOLDING MORE CASH THAN EVER BEFORE - $1.6T AT END OF 2013

Led to surge of CVCs as companies looked

for more innovative R&D solutions

1 IN 5 VC DEALS

HAS CVC IN SYNDICATE

GOOGLE VENTURES WAS

THE WORLD’S MOST

ACTIVE CORPORATE VC,

INVESTING $2.8 BILLION

INTO 122 COMPANIES

TECH COMPANIES THAT

SEE RAPID CHANGE IN

THEIR LANDSCAPES

APPRECIATE CV FUNDS

BUT IT’S NOT JUST YOUR USUAL

SUSPECTS

25 OF THE 30 FIRMS THAT COMPRISE THE DOW JONES INDUSTRIAL AVERAGE HAVE

A CVC UNIT

PAST FOUR YEARS MORE THAN 475 CORPORATE VENTURE FUNDS HAVE

STARTED, NOW 1,100 FUNDS, MORE THAN DOUBLE NUMBER IN 2009

HALF OF TOP 100 US FIRMS HAVE CVC AND 25% OF FORTUNE 500

25/30

1100

50+/100

OZ TECH FUNDING HITS RECORD. BUT.

19Source: CB Insights

$92M

LOCAL INVESTORS UNDERWEIGHT

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Berlin: 64% London: 59% Australia: 38%

Other

Source: CB Insights

GLOBAL FUNDS COMING DOWN UNDER

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US$50m

US$21m

US$250m

US$35m

US$150m

US$15m

US$30m

BUT FEW HAVE LOCAL INVESTORS

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US$50m

US$21m

US$250m

US$35m

US$150m

US$15m

US$30m

WE’RE MISSING MID TO LATE-STAGE CAPITAL

23Source: CB Insights

LOCAL PLAYERS & OPTIONS EMERGING

Equity-based Crowd Funding Platforms in AU

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SO WHY VENTURE?

DISRUPTIVE INNOVATION IS THE SINGLE BIGGEST WORRY FOR FIRMS

RESEARCH & DEVELOPMENT

ACQUISITON TARGETS

INFLUENCE INDUSTRY’S ECOSYSTEM

CVC yield 3 times # patents per $ invested

than in-house R&D

1/3 of CVC-backed startups acquired versus 1/10 from private VC only

Identifying new markets and building up their existing businesses

ADVANTAGE OF INVOLVEMENT WITH STARTUPS AT THE EARLY STAGES, WHEN THEY CAN MOST BENEFIT FROM ACCESS TO A LARGE, ESTABLISHED CUSTOMER BASE, CREDIBILITY THROUGH BRAND ASSOCIATION AND A LARGER NETWORK OF PARTNER COMPANIES AND ADVISORS.

INSIGHTS INTO NEW MARKETS & TECHNOLOGY

NEXT GEN PRODUCTS & SERVICES

DOMAIN EXPERTISE

NEW BUSINESS MODELS FOR THE FUTURE

COST SAVINGS

TECH STARTUPS ARE INDUSTRY GAME CHANGERS

APPETITE FOR CORPORATE VENTURE IS GROWING

CVC CAN IDENTIFY DISTRUPTIVE INNOVATION EARLY

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TAKEAWAYS

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Venture Forth The Rise of Corporate Venture Capital

Alfred Lo Lead Principal [email protected] / @apglo