Corporate Venturing: Intel and Reuters Lead the Charge

Strategic Insights -

Established companies are increasingly investing in technology start-ups to capitalize on emerging trends such as the internet and e-commerce. Intel, the world's largest chip manufacturer, and Reuters, a global news organization, are among the pioneers of corporate venturing. Intel's Corporate Business Development Programme has invested in over 225 technology companies, while Reuters' "greenhouse fund" has backed leading internet start-ups like Yahoo! and Infoseek. Other notable players in the field include News International and Bernard Arnault's Europweb, which plans to invest €500m in European internet companies.

Key Takeaways:

  • Intel's Corporate Business Development Programme has invested in over 225 technology and related companies, with a total portfolio value of $3.5 billion.
  • Intel's investments typically involve a small minority stake (less than $10m) in private or young quoted companies, with a focus on strategic and financial returns.
  • Reuters' "greenhouse fund" has backed leading internet start-ups like Yahoo! and Infoseek, with a primary aim of gaining a better understanding of web content and technologies.
  • The fund has been financially rewarding, with a profit of £26m from the sale of some investments in 1998 and £29m in the first half of 1999.
  • Most of the fund's investments have fallen into six categories: internet security, internet navigation and portals, performance technologies, content, mobility, and integration.
  • News Corp and Softbank have established a joint venture investment company to promote internet businesses in Europe, while Bernard Arnault's Europweb plans to invest €500m in European internet companies.

Statistics:

  • Intel's Corporate Business Development Programme has invested in over 225 technology and related companies.
  • Intel's portfolio is valued at approximately $3.5 billion.
  • Reuters' "greenhouse fund" has made investments in leading internet start-ups worth £26m in 1998 and £29m in the first half of 1999.
  • The fund's investments have fallen into six categories: internet security, internet navigation and portals, performance technologies, content, mobility, and integration.

Sources:

  • Financial Times Limited, 1999.
  • Intel Corporation, Corporate Business Development Programme.
  • Reuters, "greenhouse fund".
  • Morgan Stanley Dean Witter, equity research note.
  • News International.
  • Bernard Arnault, Europweb.