GUV Fusion full review

Global University Venturing joined forces with its sister publication Global Corporate Venturing in a double-header event at the Grange Hotel in London as both audiences debated how to build bridges between academia and industry.

In the shadow of St Paul’s Cathedral, Global University Venturing Fusion and the Global Corporate Venturing Symposium together attracted more than 500 delegates from the venturing world.

Fusion kicked off with a panel on open innovation (see report)before being followed by a keynote presentation from David Gann OBE, vice-president for development and innovation at Imperial College London. Gann provided an overview of Imperial’s role as a key driver of innovation in the UK, and offered a glimpse into Imperial’s future as its £3bn ($4.7bn) Imperial West campus begins to take shape.

Gann also revealed that the top 10% of academics by papers were also those who get the most grants and spinouts. He said universities were all relatively small by market share in a big and growing knowledge economy, and underlined that new opportunities required collaboration, convening people, challenges and commercialisation.

Antony Boccanfuso, president of US-based academia-industry organisation the University Industry Demonstration Partnership, took the stage with Ali Amin of UBI Index, Simon Bond of SetSquared, Ronald Spangler of Massachusetts Institute of Technology (MIT), and Roger Ashby of Imperial spinout Sugru.

The five discussed how to stimulate entrepreneurial activity from startups, sharing insights from their organisations. The panel agreed that physical positioning was particularly important, with Spangler talking of how one in five students and faculty at MIT started a company, and Ashby encouraging others to go where the big companies were.

Coming off the back of the launch of Oxford Sciences Innovation (see editorial), the tech transfer managers of Oxford’s Isis Innovation and Cambridge Enterprise, Tom Hockaday and Tony Raven, provided a talk on university venture funds.

The two shared insights into the origins of two of the largest university investment funds currently in operation. Discussion also revolved around how the funds are built, whether other universities should look to generate their own funds and how they could do it.

Hockaday said the rationale behind funding for universities and university innovation was changing. He said universities used to be funded because they were a “good thing”, but now, in an economic world, you needed money to deliver your mission statement. He also spoke about the importance of follow-on funding to protect your seat at the table, citing the case of David Latchman, an academic who made just $709 from the $1bn exit of the company he founded, University College London spin-out BioVex.

Investing in the early stage was the topic for another panel, this time drawing on the investing talents and know-how of Cambridge Innovation Capital, Parkwalk Advisors, Imperial Innovations and Bridge 37 Ventures, which manages Singularity University’s $50m fund. Moderated by Brian Park of Royal Philips, the panel tackled a range of investment models, including how the four investors work with universities to stimulate investment from seed to later stage and initial public offering (IPO).

Perhaps the most electrifying aspect of our event, however, was the range and talent of the delegates who attended and provided insight through networking. The bridge between the university and corporate worlds may be a fair way from completion, but some of its foundations will be laid on the conversations exchanged and contacts made at our inaugural double-header event.

Winners: Global Corporate Venturing Awards 2015

Now in its fifth year, an integral part of the symposium has become its annual awards, presented at a gala dinner. The investment and professionalism of all those nominated are impressive, and the winners have demonstrated that extra special something to Global Corporate Venturing’s advisory board – many thanks to that group chaired by IBM Venture Capital’s Claudia Fan Munce.

Unit of the Year: Merck Global Health Innovation Fund has quickly become one of the biggest corporate venturing players in the digital health segment and is dedicating a sizeable amount of its $500m fund to larger deals with private equity and other strategic partners. This has marked it out as one of the most sophisticated new entrants to corporate venturing in the past five years.

Lifetime Achievement Award: Arvind Sodhani has led Intel Capital, the corporate venturing unit of the chipmaker, since 2005, taking it to more than $11bn of venture capital invested and making it probably the biggest venture investor in the world. It is regularly the most active corporate venturing investor by number of deals in our annual and quarterly rankings. Sodhani has achieved iconic status in the corporate venturing industry, due to the success of Intel Capital.

New Entrant of the Year and Fund of the Year: DRX Capital. For the first time, the board voted to give two awards to the one unit. DRX Capital, a $100m digital health convergence fund devised “over lunch” between fellow corporate investors. Qualcomm Ventures, the corporate venturing unit of the US-based technology company, and Novartis Pharmaceuticals, a Switzerland-based pharmaceutical company, surprised investors in both the health and IT sectors with their radical move towards convergence.

M&A Exit of the Year: Beats. Vivendi, the parent company of Universal Music, made a $404m return when it sold its 13% stake in US-based headphones production and music-streaming company, Beats, to computing technology company Apple as part of a wider exit. It was a large return from a company that has quickly become iconic in its industry, and now will benefit from Apple’s marketing heft.

IPO of the Year: Alibaba’s IPO illustrated the returns that can be made by large corporate venturing investments in high-growth companies. The deal yielded gigantic $30bn to $40bn stake crystallisations for corporate venturing backers Yahoo and SoftBank.

Large Investment of the Year: Xiaomi. The claim of creating the world’s largest startup is always an impressive one. Xiaomi, a China smartphone manufacturer backed by media company IDG and wireless technology producer Qualcomm, raised $1.1bn in series E funding early this year, putting its valuation at $45bn, according to the company’s president Lin Bin.

Sub-$50m Investment of the Year: Instacart. American Express Ventures, the corporate venturing unit of the financial services company, has tapped into what could be one of the fastest-growing consumer IT investment stories in the past year. Instacart’s move into the convenience grocery delivery segment highlightied new ways that financial services companies, such as American Express, can strategically tap into retail purchase application software tie-ups.

Legal Firm of the Year: DLA Piper has made waves within the corporate venturing community and is well known throughout the industry. Lawyers at the firm interested in corporate venturing include Mark Radcliffe in Palo Alto, Megan Muir in Seattle, and Ed Griffiths in London.

Financial Firm of the Year: Silicon Valley Bank. With a carefully honed offering for corporate venturing units across the globe, the bank has consistently proven its dedication to the segment, with its insight into new market trends and its deal analytics and sector-based services.

Software Service Provider of the Year: Salesforce’s success has led to widespread adoption across the corporate venturing world, with many voters on our board picking the technology company as their software service provider of choice. It is common to talk with dealmakers about how they use the platform, and multiple corporations have customised the system.

Consult
ancy Firm of the Year: PricewaterhouseCoopers. Over the past year, PwC has been building its corporate venture capital advisory capabilities alongside its private equity and corporate M&A services, two sectors where the firm has extensive experience. The firm’s far-reaching know-how across international markets and transactional services is setting the advisory firm apart in the corporate venturing arena.

Talent Award of the Year: Naspers. The ethos of entrepreneurialism permeates every aspect of the Naspers Group and is the driving force behind the organisation’s successful talent strategy. Its approach to finding, developing and retaining talent is staggeringly effective – especially considering both the scale of the organisation and the diversity of its markets, geographies and cultures.

Keynote: Cultivating and nourishing innovation

Marc Sluijs, president of Health Tech Summit, spoke to Jack Young, senior director of Qualcomm Ventures, and Young and Ceulemans discussed how the DRX Capital fund was forged by wireless technology producer Qualcomm and pharmaceutical firm Novartis. DRX Capital, named Fund of the Year by sister publication Global Corporate Venturing, was conceived around six months ago, said Ceulemans.

Novartis wanted to pursue new applications and developments in medicine, but did not have the engineering skills. Marc Ceulemans, head of strategic venture capital fund, pharma equities, at Novartis, about the future of digital health and technology. Qualcomm had been involved in digital health for 10 years and had picked some early winners, such as health and fitness tracker company Fitbit, but as Young said: “Many companies which started as consumer health have become more clinical, going more towards digital medicine.”

The collaboration with Novartis takes Qualcomm in that higher direction, Young said, predicting: “It should yield some interesting investments.”

The $100m fund, which could yet have more firepower, is expected to be invested in between eight and 10 deals over the next two years. The focus includes pills and how to wrap them with digital diagnostics. According to Young, 150 possible deals have been sourced so far, with two announcements expected soon.

The US Food and Drug Administration is a factor in slowing down investments, Young said, adding: “But as it gets more comfortable, the process gets more streamlined.”

“This is a DNA change for us,” said Ceulemans, who described the fund as a platform open to collaboration – discussions on the subject are being held with Merck. “We do not want it to benefit just us,” he said, “but the whole pharmaceutical industry.”

Panel talk: Open innovation

John Riggs, partner at professional services firm PricewaterhouseCoopers, spoke to corporate and university innovation promoters about the advantages and challenges of creating open innovation.

The panel was made up of Timothy Barnes, director of UCL Enterprise, the tech transfer office of University College London, Dyan Finkhousen, director of open innovation and advanced manufacturing for industrial conglomerate General Electric (GE), Jacqueline LeSage Krause, managing director of strategic corporate ventures for insurance provider MunichRe/Hartford Steam Boiler, and Robert Rosenberg, adjunct associate professor of entrepreneurship for Chicago Booth School of Business.

Finkhousen described how, two years ago, GE decided to scale its innovation delivery system and establish a centre of excellence, explaining: “We committed to engage the crowd, both internally and externally. The crowd for us is an extension of the team.”

One of the early challenges, Finkhousen said, had been cultural, in terms of opening up GE’s store of intellectual property. The engagement statements it had were initially very constrained in terms of what was required for a commercial product. “After retooling to the opportunity statement design, we now have access to more disruptive solutions,” he said.

Open innovation, Krause stated, was about being “open to the outside, and also being open about which tool to use, be it venturing, partnering, M&A, licensing or a university relationship”. She added that, from MunichRe’s experience, the firm had discovered “you need to give a little to get something back”.

Rosenberg gave an example of how a molecule, after many years of study in the university lab, had not been patented, only for four pharmaceutical companies then to fight with each other to develop drugs based on the research to combat anaemia. “You could argue that open innovation encourage competition that brought drugs to market more quickly.”

Barnes said the concept of sharing was vital, and that universities “were able to construct environments of trust” to enable this. In the UK, he claimed, the relationship with universities did not start on a transactional or licensing basis, saying: “You start with the problem, and you need to open the funnel as wide as possible, rather than by saying how to do it.”