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The Rise of Corporate Venture Capital; an Australian perpective

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The Rise of Corporate Venture Capital; an Australian perpective

  1. 1. 1 Venture Forth The Rise of Corporate Venture Capital Alfred Lo Lead Principal alfred.lo@optus.com.au / @apglo
  2. 2. 2 KNOWLEDGE OF WHAT IS P O S S I B L E I S T H E BEGINNING OF HAPPINESS “ “ - GEORGE SANTAYANA
  3. 3. Optus-Innov8 is a collaboration between Optus and Singtel Innov8 bringing together funding and resources for Australian tech startups
  4. 4. 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
  5. 5. 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
  6. 6. Tier-1 VCs Accelerators & Incubators Telco VCs NETWORKS ARE KEY Internal Business Units
  7. 7. UNICORNS? PRE-IPO TECH STARTUPS WITH $1B+ VALUATIONS
  8. 8. 8 A RECENT PHENOM. THESE WEREN’T UNICORNS.
  9. 9. Source: Fortune
  10. 10. UNICORNS WITH CORPORATE VENTURE BACKING Baidu Google Ventures Comcast Coca-Cola Horizon Salesforce in-q-tel Samsung Ventures Visa Starbucks Singtel Innov8 Intel Capital Red Hat Salesforce Ventures Emc in-q-tel Rakuten
  11. 11. 656 CVC DEALS US$12.31B IN 2014
  12. 12. 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
  13. 13. 1 IN 5 VC DEALS HAS CVC IN SYNDICATE
  14. 14. 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
  15. 15. BUT IT’S NOT JUST YOUR USUAL SUSPECTS
  16. 16. 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
  17. 17. OZ TECH FUNDING HITS RECORD. BUT. 19Source: CB Insights $92M
  18. 18. LOCAL INVESTORS UNDERWEIGHT 20 Berlin: 64% London: 59% Australia: 38% Other Source: CB Insights
  19. 19. GLOBAL FUNDS COMING DOWN UNDER 21 US$50m US$21m US$250m US$35m US$150m US$15m US$30m
  20. 20. BUT FEW HAVE LOCAL INVESTORS 22 US$50m US$21m US$250m US$35m US$150m US$15m US$30m
  21. 21. WE’RE MISSING MID TO LATE-STAGE CAPITAL 23Source: CB Insights
  22. 22. LOCAL PLAYERS & OPTIONS EMERGING Equity-based Crowd Funding Platforms in AU 24
  23. 23. 25 SO WHY VENTURE?
  24. 24. 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
  25. 25. 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
  26. 26. TECH STARTUPS ARE INDUSTRY GAME CHANGERS APPETITE FOR CORPORATE VENTURE IS GROWING CVC CAN IDENTIFY DISTRUPTIVE INNOVATION EARLY > > > TAKEAWAYS
  27. 27. 29 Venture Forth The Rise of Corporate Venture Capital Alfred Lo Lead Principal alfred.lo@optus.com.au / @apglo

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