TLDR:
- Corporate venture funds have remained steady in a declining market
- Corporate investors are focusing on portfolio company partnerships, injecting big-company ideas into startups, collaboration with VCs, venture building, and analyzing political risk
In 2024, corporate venture funds have proven to be a stable investment option amidst a declining market for venture capital. While the number of active corporate venture units globally has decreased from its peak, corporate investors are leveraging their unique strengths to stand out in the market. At the annual Global Corporate Venturing Symposium in London, five key trends emerged:
- Portfolio Company Partnerships: Corporate venturing units are increasingly focused on helping their portfolio companies collaborate with business units within the parent company to create synergies and streamline processes.
- Injecting Big-Company Ideas: Corporates are providing startups with advice on tools for operating as larger companies, leading to increased scalability and readiness for investment.
- Collaboration with VCs: Corporate venturing is closely knit with the VC sector, with more CVCs taking limited partner positions in VC funds to increase exposure to early-stage sectors and competitive deals.
- Venture Building: An increasing number of corporates are exploring internal venture building operations to tap into innovation beyond their core focus, offering advice on hiring, incentivizing the team, and maintaining a disciplined approach to project selection.
- Political Risk Analysis: Geopolitical tensions are emerging as a significant obstacle to funding, with investors needing to devote more resources to analyzing political, compliance, and reputation risks associated with deals.
Overall, corporate venture investors are adapting to the changing landscape in 2024 by focusing on strategic partnerships, innovation, collaboration, and risk analysis to navigate the evolving investment climate.
