A member of the top 25 from the Global Corporate Venturing Powerlist
Cisco Investments, the corporate development team at computer network equipment supplier Cisco Systems, has reportedly $2bn of investments in 100 companies and 40 venture funds.
It also has a new leader of its 40-strong investments team in Rob Salvagno, head of corporate development and investments at Cisco, to help it invest a committed $300m over the next two to three years. The company in October promoted him after Hilton Romanski, its senior vice-president of corporate development, moved to be its chief strategy officer.
Together, corporate development and Cisco Investments have a worldwide presence with teams across the US, Israel, China, Asia-Pacific and Japan and Europe. The company is, however, looking for a new leader outside the US after Frederic Rombaut, the UK-based head of corporate development international at Cisco, in March left to run his own investment and advisory service, FR Development.
Rombaut said his replacement had yet been chosen but that Cisco was looking at a number of options, including hiring people to run the digital acceleration initiative in Europe. Rombaut set up Cisco commitments to invest in VC funds as well as £150m ($210m) directly in the UK, $200m in France, $100m in Italy and, this month, $500m in Germany.
These European national commitments, followed a similar one in North America, the Cisco Canada Innovation Program, that in late 2014 said it would invest C$150m ($118m) through a combination of investments in venture capital funds, incubators and direct deals. In Asia, in March, Cisco said it would invest a further $100m in India to fund startups – having previously backed 25 of them – and train 250,000 students in India by 2020.
Elsewhere, it took a limited partner stake in Singapore-based Monk’s Hill Ventures to help it close its debut fund last month, and in Japan’s Archetype Ventures Fund in January.
Together, they were seen as a shift back towards indirect investing – making limited partner commitments to third party venture capital funds – with direct investing as usually a co-investment alongside a VC.
Having been founded in 1993, Cisco had committed to multiple VC funds more than a decade ago but despite strong returns from some, notably SoftBank’s China fund which invested in online retailer Alibaba, had in aggregate lost money.
Rombaut said the latest approach was a way to put more money out more quickly and, as it required less due diligence on deals, meant more of the digital disruption and innovation affecting Cisco could be covered, despite some concerns about valuations.
Salvagno told newspaper New York Times last month: “In the last few years, there has been more and more corporate VC money coming in, and I do think that has had an impact on valuations.”
Cisco’s strategic priorities are in the areas of data centres, cloud, security, big data, internet of things (IoT) and core network equipment, and buying more of them. In March, Cisco agreed to acquire Cliqr Technologies, a cloud computing technology provider backed by internet conglomerate Alphabet’s GV corporate venturing unit, for $260m.
As technology continues to evolve and disrupt, Cisco under Salvagno and Romanski are driving an ambitious strategy on multiple corporate venturing and acquisition fronts.
Cisco’s investment activity since the beginning of 2015
