February 2021 issue editorial by James Mawson, editor in chief, Global Corporate Venturing
It is a classic question venture capitalists ask: what does your business look like if the market is five to 10 times bigger or the costs fall tenfold?
It is, however, one rarely asked of the innovation capital market itself.
It is clear the pace of innovation and sharing ideas across sectors and regions is speeding up. The development of artificial intelligence as a general purpose technology allied to innovation in a host of fields from quantum computing to messenger RNA, nuclear fusion to carbon capture and blockchain to the metaverse means developments in one field can open up spin-overs in others and excite the nascent entrepreneurs among us all.
From idea to employing 1.3 million people and serving hundreds of millions of customers and businesses in a generation is phenomenal for any startup. It is, therefore, epic to see Amazon’s founder and chief executive, Jeff Bezos, transition this month to executive chairman of the online retailer after 27 years.
As to how, he puts it down to one core thing. “Invention is the root of our success.
“We have done crazy things together, and then made them normal. We pioneered customer reviews, one-click, personalised recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice and much more.”
To pick just one of these inventions, cloud computing, is now a $1 trillion market, albeit a challenging one for competitors, such as Alphabet, which posted a loss of more than $1bn on its cloud division last quarter.
But opening up cloud computing to startups has been a core part of the explosion in innovation and productivity we are starting to see.
Take Moderna Therapeutics. Bringing new drugs to market can take a decade and cost in excess of $1bn and vaccines can take far longer. Moderna started using the Amazon Web Services (AWS) Cloud so it could work on developing messenger RNA as effectively biologic software to tell patients’ bodies how to produce drugs themselves.
As Marcello Damiani, chief digital officer at Moderna, told AWS in 2017: “Given our company’s small size and ambitious goals, AWS is critical to our digitisation strategy.”
By mid-December, Moderna had been approved by the US government as the country’s second covid-19 vaccine. A month or so later and more than 22 million Americans have been vaccinated using Moderna and Pfizer/BioNTech’s vaccines.
The same examples are true in all other sectors, and we are delighted Amazon and AWS share their corporate venturing and entrepreneurial leadership as part of the GCV sector councils.
And the capital is flowing between and into all sectors and regions.
Over the past decade to end-2020, the global amount invested in venture capital deals reached $1.78 trillion, according to data provider Pitchbook.
For the comparable period between 2001 and end-2010, the then-dominant US market saw $261.3bn invested, according to local trade body National Venture Capital Association.
The majority of money invested in startups now comes from alternative VCs, such as corporate venturers, angels and sovereign, mutual, private equity and hedge funds. These alternative VCs’ motivations and approaches to adding value can be different.
But professionalism and a common focus on supporting entrepreneurs aligns interests and a shared language. GCV is working to support this drive to a more efficient allocation of capital to those who can best use it by launching the Institute for professional development and Global Innovation Venturing, chaired by Scott Sandell, managing partner at NEA, to connect the world’s investors. Thank you to our partners, Bell Mason Group, and all involved in bringing these initiatives to light.
My thanks also go to Young Sohn for the continued chairmanship of the GCV Leadership Society Advisory Board as he announces the next step in his career..
There are plenty of change at Samsung’s corporate venturing units with David Lee joining Brendon Kim at Samsung NEXT while Sean Kae is acting head on the Samsung Strategy and Innovation Center with Shankar Chandran and Francis Ho co-heads of its $2bn Catalyst Fund.
From fast-follower to global leader and making the world a better place.
