CVC in Full Swing
Jun 23-2019
The 14th NSD MBA Forum was held recently, featuring Mr. Markus Solibieda, Managing Director of BASF Venture Capital, as speaker and NSD Associate Prof. Xie Xuanli as commentator.
In his speech on next-generation corporate venture capital (CVC), Mr. Solibieda presented CVC’s latest developments and strategic models. Statistics showed that from 2013 to 2018 CVC grew rapidly around the world and particularly so in Asia. 2018 alone saw the birth of 264 new CVC funds, an increase of 35% compared to the previous year. Industrial companies used to dominate CVC, but nowadays more and more high-tech firms such as Google, Microsoft, and Intel have joined the fray. Baidu’s CVC was the most active in AI in 2018.
In the first two quarters of 2018, China’s VC raised USD56 billion, eclipsing that of the US (at USD42 billion) for the first time. Mr. Solibieda believed it to be a milestone event. Meanwhile, he said that the exit channels for VC should be further improved in China.
On the strategic models and investment methods, Mr. Solibieda laid out the details and used BASF CVC’s investment case in agriculture for illustration. BASF CVC was launched in 2001 and currently manages USD250 million.
NSD Associate Prof. Xie Xuanli said that CVC has become an integral part of some companies’ business model. Tencent is the biggest Chinese player, followed by Alibaba, Jingdong, and Xiao Mi. One of the driving forces, she argued, is the ascending popularity of Open Innovation that taps external innovative capabilities – a significant shift from the Internal Innovation model in the old days.
