Global Corporate Venturing (GCV) says ‘Corporate Venturing involves larger companies investing in and supporting entrepreneurs, such as taking minority equity stakes, either directly or through venture capital funds, as well as other innovation tools, including incubators, accelerators and developing internal innovation – ‘intrapreneurship’’.
Bundl distinguishes this with Venture Clienting where corporates, ‘focuses on becoming early adopters or customers of startup products, providing a quicker, lower-risk approach but with limited financial upside’.
Corporate Financial Institute (CFI) highlights that Corporate Venture Capital (CVC) targets to gain a strategic competitive advantage and access to new innovative high growth, high scale, high risk and high return MSMEs that may become potential competitors in the future. Strategic CVCs increase the sales and profits of corporates by investing in startups that use new emerging technologies , new Intellectual Property Rights (IPRs), entering new markets, catalyzing external innovation, identifying acquisition targets, and accessing new resources.
Financial CVCs invest in new companies for leverage via IPOs or sale of stakes in the MSME in secondary venture capital market. South African conglomerate Naspers with a market capitalization of USD$49.54bn in August 2025 converted itself from media company to an internet and technology company by investing USD$32M for a 46.5 percent stake in China’s Tencent in 2001 when it was small and loss making. Tencent hit a home run with its popular platforms like WeChat and video gaming. Its market capitalization stands at USD$653.32bn in August 2025.
Bundl reports that majority of top 100 USA Fortune 500 corporates have active CVC units. CVCs and Venture Clienting business models targets to revolutionize innovation and future proof corporates with a consistent pipeline of ideas, strategic insights on emerging trends as ears and eyes , products, solutions, technologies, entrepreneurial talent, ecosystems built around the corporate’s core business via forward and backward linkages , gap filler innovations in corporate product roadmaps and services to overcome rapidly morphing VUCA (Volatile, Uncertain, Complex and Ambiguous) external context.
Corporates can manage their corporate venture capital funds in-house or outsource to specialist venture capital fund managers. Corporates worried that the speed of change in the external environment is so fast that their internal innovations teams cannot match, may choose to buy instead of building innovations or opt to invest stakes in more nimble disruptive firms solving their challenges. Some may choose to strategically share their infrastructure, management and marketing expertise, strategic direction, and lines of credit with the new entrants to their sectors.
Corporates help MSMEs to coordinate the factors of production (land, labor, finance, technology , entrepreneurship), take risks, develop products, find customers before eventually exiting and in return crowd in innovation ideas, wider pool of talented staff ,synergistic integrations to their current businesses, saving costs, earning investment income and furthering their corporate growth strategies including acquisitions to maintain market leadership. Startups benefit from industry expertise, renowned corporate brand validation (endorsement), strong financial rating, network connections, and ‘inside circle’ ecosystem of developed products. CVC funds are not judged purely on Internal Rate of Return- IRR.
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Corporate venturing is accused of pushing MSMEs to grow and mature much faster. It dilutes shareholding of founders while their preference shares are high on creditors’ pecking order. It can lead to conflict of interests between the corporate and investee company, fight for limited resources, corporate bureaucracy diminishes startup autonomy and agility , divergence in corporate strategies and lack of ‘corporate parenting’ skills required to nurture the challenger entrants. Corporates aren’t good in crowding in the next round of investors. Startups have high risk and failure rates.
MSME Growth and Development Stages for Corporate Venture Capital Investments
Corporate Financial Institute points out that in the Early-Stage Financing stage, startups burn cash in developing a Minimum Viable Product (MVP) and Going to Market (GTM). Seed Capital Funding is small risky investment to cover an MSME’s initial operating expenses and to attract venture capitalists in exchange for equity stakes. Expansion Financing is capital provided to firms that are scaling up through launching of new products, product enhancements, expanding production plants or marketing. Initial Public Offering- IPO stage is the key long term target for CVCs to achieve home runs (investment that results in an especially large capital gain in a very short period of time and reinvest in new ventures for future returns). Mergers and Acquisitions involves financing a startup’s acquisitions through an investment fund, or aligning it with a complimentary product or business lines, shared resources, processes, and technologies to save costs, enhance liquidity and better market positioning.
Global Banks Corporate Venturing
Fintech Funds are venture capital investments in startup or established financial and technology companies trying to replace, disrupt or enhance the usage of financial services. Fintechs are defined as new applications, processes, products, or business models in disrupting the financial services industry, composed of one or more complementary financial services and provided as an end-to-end process via the internet e.g. mobile payments, money transfers, loans, crowdfunding fundraising, asset management etc.
NAB (National Australian Bank) Ventures is a global initiative supporting entrepreneurs in Australia and offshore in their quest to build leading technology companies. It invests in technology enterprises that can leverage the bank’s expertise, assets and market position to drive growth in investee companies. Its Strategic Objective 1 on Connected Businesses provides a “connected” experience for small and medium businesses’’. Strategic Objective 2 on Home Ownership supports retail customers through the full home ownership journey. It’s Strategic Objective 3 on a Cashless World build easier, faster and richer payments for customers. Its Strategic Objective 4 on Empowered Investments helps customers build, monitor and manage wealth. Some of the investees in NAB Ventures include; Basiq (aggregation platform for acquiring financial data using RESTful APIs); Data Republic’s data exchange ecosystem (secure, simple and accessible way for organizations to collaborate on data projects); Wave (a free financial software for small businesses- accounting, invoicing on iPhone and Android, recurring billing, lending, payroll, receipting), Veem (next generation platform for business to business payments) and Medipass (builder of digital health-grade payment solutions, connecting patients, practitioners and payers in ways that drive system efficiency and better experiences of care).
Banco Santander (Spain) in July 2024 launched the Innoventure $100 million fund to get closer to the wave of disruptive innovation in the FinTech space to make sure Santander customers around the world benefit from the latest know-how and innovations across the Banking Group’s geographies. The Fintech investee had to have a sound financial case, but also a clear vision on how Santander can help the start-up grow and scale leveraging Santander’s global footprint in over 25 markets, over 107 million individual customers and 3 million corporate SMEs. The bank viewed itself as the ideal platform for FinTechs to gain the traction every FinTech start-up needs to validate their business model and become sustainable companies. Investee companies includes iZettle which delivered a service that includes a fully integrated payment solution, consisting of an app, a chip-card reader and a free business management software tool that lets anyone take card payments and manage their business. MyCheck was a checkout technology that enhanced the merchant and guest experience by integrating into point of sales system and allows users to view, split and pay their bill straight from their mobile devices .Kabbage had pioneered the first financial services data and technology platform to provide fully automated funding to small businesses in minutes. PayKey provided banks with a mobile touchscreen keyboard to allow clients to initiate P2P payments across social media chat apps (Facebook, WhatsApp) under a bank-branded extension of the banking app. Elliptic was a global standard in block chain monitoring technology, and was recognized as an established authority on block chain compliance. Socure was a leader in multi factor biometric and social data digital identity verification. TradeShift was a cloud-based enterprise software platform focused on supply chain solutions for buyers and suppliers.
Telecoms Corporate Venturing
Arthur D. Little contends that Telecoms CVC investments optimize balance sheets, free capital to invest in tomorrow’s businesses, expand into adjacent industries and develop new service offerings. Deutsche Telekom strategic capital is invested by T Capital which provides early- and late-stage strategic capital to companies that have synergies the telco. T Capital manages the investment cycle from origination to closing and the relationship beyond. T Capital also assist Deutsche Telekom in technology acquisitions of significant minority or majority participations. T Capital facilitate partner relationships that create strategic and financial value for Deutsche Telekom and portfolio companies – providing introductions to new business partners, driving commercial engagements and assisting in critical junctures.
T Capital has invested in over 40 companies. Mondoo is a security and compliance platform offering real-time, automated insights to secure hybrid and multi-cloud infrastructures. ElevenLabs is a pioneer in voice technology, offering proprietary solutions for TTS, STS, voice cloning, and audio effects. Perplexity is a conversational AI search engine which transforms the search experience into an intuitive and transparent consumer experience. Equativ is a comprehensive full-stack AdTech platform that optimizes buying and selling of digital ad inventory. Ponto is a provider of easy-to-use software application APIs, designed to launch financial crypto products. Droniq is a software which processes drone position data simultaneously to manned aircraft enabling safe drone operations.
Titanium Ventures is the CVC of Australia’s leading telco Telstra which invests in accelerating the growth of extraordinary high-potential technology startup disruptors. It invest in companies that are using software and AI to tackle tough problems, upend and disrupt traditional industries. It has made over 100 investments including 18 unicorns and has over USD$1bn in Assets under Management (AUM). Its portfolio companies includes DocuSign, Box, CrowdStrike, BigCommerce, Snap and GitLab. ASAPP is a Generative AI for contact centers. BuildOps is building the future for commercial contractors. Cequence Security protects billions of API calls every day. FitOn is transforming how fitness is delivered. Forage is bridging education and career success. LambdaTest enhances apps quality with AI-powered testing. CrowdStrike is a leading cybersecurity platform which allow the telecom to expand its offerings into cybersecurity services.
Global Insurers Corporate Venturing
Lions Financial reports AVP- Atlantic Vantage Point (AXA Venture Partners) in France invests in high-growth deep-tech to tech-enabled companies across Europe and North America. Its investment sectors comprise software, healthcare and ICT. It has over 60 companies including NS8, Contrast Security, Block Stream, Sedai, Idelic and PolicyGenius.
Munich Re Ventures in Germany funds the future of risk for the human endeavor by investing in the next generation of disruptive technologies and business models. Investment sectors comprise insurtech, resilient future, cybersecurity and privacy, healthtech and built world. It has over 50 portfolio companies including Functional Finance, Future Family, ManyPets, RunWise and Quantile Health. It offer investee companies long term relationship, financial depth, deep expertise, connection to Munich Re, investor and industry networks.
Allianz X is the digital investment unit of the Allianz Group of Germany that invests in digital growth companies related to insurance, financial services; automotive and FinTech. Investee companies include 1Qbit. a quantum computing software company. AlTi is a leading independent global wealth and alternatives manager. C2FO is the world’s first working capital marketplace. Clark is a leading European digital insurance broker.ControlExpert is a leading technology-driven automotive claims processing company. N26 is a pan-European Mobile Bank for the smartphone. Nauto is an artificial intelligence-powered automotive technology system that makes fleets drive safer and smarter today, and is informing future autonomous vehicle development. NEXT Insurance is transforming small business insurance with simple, digital, and affordable coverage tailored to the self-employed. Pie Insurance is modernizing small business insurance. SafeBoda – an African ride-hailing and financial services platform.
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Kenya’s ‘Sleeping Giant’ Corporate Venturing Scene
The $1 million Safaricom Spark Venture Fund launched in November 2014, managed by an external fund manager TBL Invest and an Investment Committee with Safaricom representative is perhaps the first Corporate Venture Capital fund.
It supports late seed to early growth stage mobile tech start-ups with investment, business development services- BDS and technical assistance levering the telco’s capabilities, assets and market positioning. Average ticket ranges KES 6M to KES 22M – KES 22M.
The call to action is for the other large corporates in Kenya to launch their own Corporate Venture Capital funds. This will benefit them and their investee companies, deepen the sophistication of their business models and future proof their fortunes. Kenya benefits from becoming a ‘startup nation’ like Israel, quickly rising into an innovation economy, and fully leveraging the technology dividends of the 4th Industrial Revolution (4IR)Technologies like AI, ML, RPA, IOT, 3D printing, Metaverse, Block chain DLT, Cloud and Quantum computing.
CVCs maybe the panacea to fix challenges bedeviling Kenya’s innovation economy. The 2024 World Intellectual Property Organization (WIPO) Global Innovation Index (GII) 2024 on ‘Unlocking the Promise of Social Entrepreneurship’ globally ranked Kenya’s innovation inputs-outputs at 105th and 87th. Kenya’s business sophistication scored 21.3 percent. Growing Kenya’s intangible assets score from 15.1 percent needs raising of the country’s top 15 companies intangible assets value proportion of their total value, number of trademark applications per bn PPP$ GDP, top 5000 firms brand value percent of GDP, and number of industrial design applications per bn PPP$ GDP. Reduction of informality of the Kenyan economy will also benefit KRA tax collection efforts by widening the MSME tax base as CVCs enlarge and deepen the formal entrepreneur ecosystem.
