Raymond Zheng argues that corporate venture creates value only when investment leads to deployment, while warning that energy infrastructure could become the bottleneck to technological progress.
For Raymond Zheng, senior managing director at Honda Xcelerator Ventures, the Japanese carmaker’s investment arm, the central question in corporate venture capital is not whether a startup can attract funding. It is whether the technology can make the difficult journey from investment portfolio to operating business.
That distinction has reshaped his view of CVC. Early in his career, Zheng saw corporate venture as a way to learn about emerging technologies, maintain optionality and hedge against an uncertain future. But working inside a large industrial organisation changed the emphasis.
“It’s one thing to see value on paper, but it’s another to see a startup’s technology being adopted, scaled, and making a real difference,” he says.
For Honda Xcelerator Ventures, that means treating investment and open innovation as complementary disciplines rather than separate activities. The approach reflects a broader challenge for corporate investors: strategic value is often promised at the point of investment but is created only if the corporate can actually absorb and deploy what it has bought access to.
The investment is only the beginning
Zheng identifies the siloing of venture activity as one of the most persistent weaknesses in corporate venture capital. A deal can be completed successfully while the startup remains effectively outside the company, without an internal champion, meaningful customer or credible route to integration.
“Investment and open innovation do not automatically come together,” he says. “You have to actively build both muscles.”
Honda’s model was shaped by that experience. Honda Xcelerator began as an open innovation initiative, focused on connecting startups with the company’s internal teams. As the organisation expanded into investing and became Honda Xcelerator Ventures, it retained that operating philosophy.
The distinction matters because startups often need considerably more than capital from a corporate investor. Engineering expertise, testing environments, customer access and a route towards commercial deployment can be more valuable than another financial backer. For the corporate, meanwhile, the process creates a mechanism for bringing external technology into areas where internal development may be slower or less effective.
“It’s one thing to see value on paper, but it’s another to see a startup’s technology being adopted, scaled, and making a real difference.”
The payoff is most tangible when technologies reach the real world. Zheng points to autonomous driving as an example, where the satisfaction comes not simply from backing a company but from seeing its technology begin to appear in vehicles.
“That’s when CVC becomes much more than an investment function,” he says. “It becomes a way to actually make things happen.”
Strategic relevance still needs financial discipline
That emphasis on deployment does not mean Zheng sees financial returns as secondary. He rejects the idea that a CVC investor must choose between being a strategic scout and behaving like a venture investor.
“My short answer is yes and yes,” he says.
The two roles, in his view, reinforce one another. Strategic scouting requires a detailed understanding of where the parent company is heading, alongside a strong external view of the startup ecosystem. Financial discipline then determines which opportunities deserve capital.
That requires assessing the founding team, technology, market and ability to execute, rather than allowing strategic relevance to become a justification for weak investment decisions.
The logic is particularly important for industrial CVCs, where the temptation to invest in technologies that fit a corporate narrative can be strong. A startup may be strategically interesting without being investable, just as a financially attractive company may have little relevance to the parent.
For Zheng, the solution is not to dilute either objective but to develop both capabilities in parallel. Strategic alignment narrows the field to areas where the corporate can contribute meaningfully; investment discipline determines which companies can ultimately create value.
The infrastructure constraint
Zheng’s view of where corporate attention should move next is strikingly different from the current fixation on AI applications. He argues that energy infrastructure is among the most underestimated technology opportunities because it sits underneath almost every other major technology trend.
“Innovation ultimately runs on electricity,” he says.
The point is increasingly difficult to dismiss. The International Energy Agency estimates that global data-centre electricity consumption was about 415TWh in 2024 and projects it to more than double to around 945TWh by 2030. AI-focused data centres are driving much of the increase, while grid connections, transformers and other infrastructure are already emerging as bottlenecks.
For corporate investors, that changes the opportunity set. Technologies such as AI, autonomous vehicles and advanced manufacturing may attract the attention, but their deployment depends on less visible systems: generation, transmission, storage, power management and increasingly localised infrastructure such as microgrids.
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Zheng argues that this should be viewed not simply as an energy-sector concern but as a question of industrial competitiveness. Countries and companies with reliable, scalable electricity infrastructure will be better positioned to deploy new technologies quickly.
His observations from China have reinforced that view. Strong electricity infrastructure, he says, can become a competitive advantage because it enables faster deployment and scaling.
The implication for CVC is that the next strategic advantage may come from looking beyond the headline technology. The most important investment opportunities may sit one layer below the innovations attracting the most attention.
From optionality to execution
That brings Zheng’s two themes together. His evolution as a CVC investor has been from seeing venture capital primarily as a mechanism for gaining exposure to the future to viewing it as an instrument for changing the present.
That requires a corporate investor to do more than identify promising startups. It must be capable of putting technologies into real environments, connecting them to the right internal teams and maintaining enough investment discipline to avoid confusing strategic interest with commercial potential.
The same principle applies to energy infrastructure. The technologies that dominate investment headlines may not be the ones that ultimately determine how quickly innovation can scale.
“In many ways, the next wave of technological progress will not be limited by ideas,” Zheng says, “but by whether we have the infrastructure to support them.”
Raymond Zheng is one of the 100 leading corporate venturing professionals featured on the GCV Powerlist.
These individuals excel in terms of their venturing approach and structure, number and quality of portfolio companies and in their contributions to the corporate venturing profession.
