Kyle Stanford February 29, 2016
What do the children’s television program Sesame Street and soup maker Campbell's have in common? You might not guess it, but they both have venture capital funds. Corporations from all walks of life have begun to join the VC world. In fact, the number of active corporate venture capital (CVC) firms has grown each year from 151 in 2009 to 224 in 2015, according to the PitchBook Platform. And while it may seem unexpected that a children’s program and a soup maker are becoming investors, these companies are getting into venture capital to build their brand and business much the same way CVCs like Salesforce Ventures and Comcast Ventures invest in businesses that make their platforms more valuable for customers.
Sesame Workshop - Sesame Street's parent has made its mission to help kids grow smarter, stronger and kinder. The company has set up a venture arm, Sesame Ventures, which has partnered with Collaborative Fund to launch a $10 million vehicle called Collab+Sesame. The partnership, which targets primarily the seed stage, will invest up to $1 million in each startup and support portfolio companies in follow-on rounds. It will also help startups advance through its expertise with children and families, research, network of like-minded organizations and global reach. Areas of interest include startups focused on education, media, family development, social and cultural development, food, health and wellness. With HBO now the owner of this television series, more financing might be on the way.
Campbell's - Campbell Soup Company (NYSE: CPB) has set up a $125 million fund for food and beverage startups as it looks to grow its product portfolio. The company’s sales are expected to be relatively flat in the coming year and just 34% of its 2015 sales came from its traditional products (soups), down from 40% just five years ago. Campbell’s has already made acquisitions such as Bolthouse Farms and Garden Fresh Gourmet to boost its image as a healthy and fresh packaged foods provider, but just as technologies change, so to do diets and nutritional desires of people. Finding new market opportunities and future acquisition targets through venture investment both builds the brand of Campbell’s and keeps its product portfolio up to date.
JetBlue – JetBlue (NASDAQ:JBLU) launched its VC-focused arm, JetBlue Technology Ventures, earlier this month with plans to invest in, incubate and partner with early-stage startups at the intersection of technology, travel and hospitality. The venture arm will operate from the GSVlabs campus in Silicon Valley and lean on several other early-stage programs and local networks for investment targets. Known for its customer service—even as a low-cost airline—JetBlue will be looking for startups and technologies that “power seamless customer and crewmember interactions across the entire digital and physical travel experience."
7-Eleven – International convenient store chain 7-Eleven launched 7-Ventures in 2013 to focus on the retail and food spaces, more specifically consumer facing technologies that complement its core business of convenient products and services. The company is prominent in North America and Asia, and services 55 million consumers daily in 16 companies. Leveraging a brand with that type of reach is key for startups with emerging technologies. 7-Ventures' portfolio includes KeyMe, a provider of digital key copying kiosks, and Belly, a customer loyalty and marketing platform.
Corporate VC has always been non-traditional when compared to venture capital, but even the corporations above may seem irregular when listed next to Intel Capital, GV, GE Ventures and other prominent CVCs. The fact is, corporations such as JetBlue and Campbell's Soup embody the very nature of true corporate venture capital, that of using reach and capital to build successful companies and grow their brand at the same time. They won't be the next mega-fund all startups look to for funding, but they aren't trying to be either.