2015 round up: Intel Capital

In a year when several of the big corporate venturing players underwent restructuring or changes in focus, Intel was not immune. In July, Arvind Sodhani, the long-time president of Intel Capital, announced his imminent retirement and prepared to hand over the reins to his successor.

Sodhani joined Intel since 1981 and was part of the initial team at Intel Capital when the unit was formed a decade later. He had been president since 2005, but revealed in July he would step down in January 2016 and would spend the rest of the year alongside Wendell Brooks, who took on a joint president role until the transition was complete.

In addition to the change at the top, Intel CEO Brian Krzanich revealed plans to merge Intel’s mergers and acquisitions and strategic transactions activities under the Intel Capital banner, giving Brooks, formerly Intel’s president of mergers and acquisitions, a substantially larger remit than Sodhani.

The switch has come at a time when Intel Capital’s team is shrinking, with investments gradually growing bigger and strategic relevance to Intel being increasingly prioritised, and it will be interesting to see the extent the change in presidency and structure affects the unit’s investments.

In the short term, the impact of the changes was rather clear. Intel Capital had invested $465m through August and was on track to reach $600m by the end of 2015, which would have represented its biggest year since 2008.

By early November however, the unit’s enthusiasm appeared to have stalled somewhat, with the investment total crawling to $490m altogether and the 2015 target lowered to $500m.

The $500m total would still give Intel Capital its biggest year since 2011, but the change in focus has to be seen as somewhat disappointing when compared to the $150m of extra funding touted in September. Perhaps it can be taken as evidence of the funding squeeze beginning to take hold industry wide as IPOs stall and investors look to guard against blowback from the bubble everyone keeps mentioning.

Nevertheless, Intel was a fairly prominent investor in 2015, investing more than $60m in drone manufacturer Yuneec and leading big rounds for cloud computing company Mirantis ($100m), payment processor iZettle ($67m) and social media management company Sprinklr ($46m).

Intel Capital also had a healthy year for exits, most notably from cloud computing software provider Virtustream, which it backed at series A and B stage, and which EMC agreed in May to buy for $1.2bn.

Another two portfolio companies, cognitive computing platform Saffron and smart eyewear developer ReCon Instruments, were acquired by Intel itself, the latter for $175m.

As far as next year goes, perhaps the most promising exit candidates are Sprinklr, big data technology provider Cloudera and e-signature company DocuSign, all of which are unicorns that are widely seen as IPO candidates in 2016.

In terms of funding, Intel is likely to carry on putting more money into China, and it will also be interesting to note how widely Intel invests out of the $125m Intel Capital Diversity Fund it launched in June in order to back startups run by women and underrepresented minorities.

If disruption was the big word in venture capital in 2014, diversity seemed to be on everyone’s lips this year, and it will be curious to see if the fund can back up rhetoric with firm action, particularly since two of the four initial startups to benefit from the capital have white males installed as CEOs.