Cisco’s investment highlights an increasing trend of corporate input into venture capital and startup accelerators
International conglomerate Cisco is investing $2.5 million (£1.7 million) in the U.K.-based accelerator network Startupbootcamp, the two companies announced. It seems like a small amount for an organization operating eight accelerators across Europe, but it’s tremendous considering the average amount of investment the organization puts into each of its participants. It also adds fuel to the trend of corporations moving into the ventures and acceleration business.
Startupbootcamp is based in London, but its founders split their time among the different accelerators. There are IoT and smart city related accelerators in Berlin, Amsterdam, Barcelona and Brightlands in the southern Netherlands, plus three fintech accelerators out of London, New York, and Singapore. There are also programs in Miami, Eindhoven, Copenhagen, and Istanbul and specific ones focusing on “insurtech,” e-commerce, mobile, and smart materials. Cisco is listed as a sponsor explicitly for the programs in Berlin (smart transportation and energy) and Barcelona (Internet of Things), though their press releases do not indicate any specific program for their funds.
“We see the move to digitize every business as a strong trend in the U.K., and yet there are still huge opportunities to improve productivity by further use of digital technology,” said Cisco’s CEO of its UK and Irish division, Phil Smith. “That is why we are so excited about the investment and growth we are making in the UK and the kinds of skills, jobs and technologies it represents with this investment today,” he concluded.
Corporates giving velocity to startup acceleration
Cisco Investments — the company’s venture arm — touts a portfolio covering big data, SaaS, cloud computing, cybersecurity and probably some other niche verticals our more astute readers could guess. They list 15 exits on their website. Before Startupbootcamp, Cisco Investments had planted cash in the Alchemist Accelerator in San Francisco. Besides that, they’ve invested in six VCs: 3TS Capital Partners, the Alchemist Accelerator, Boston IoT venture fund Bolt, big data-centered Georgian Partners, Omers Ventures, IoT-focused McRock Capital and cybersecurity foundry Team8.
For Startupbootcamp, it is just the latest from a slew of big brands putting their money in the network, including Intel, Salesforce, Samsung, Google, and Amazon. Sponsors for specific accelerators in the Startupbootcamp network include Vodafone, Airbus, Mercedes-Benz, AVG, Ernst & Young, Microsoft BizSpark, Mastercard, Mastercard Singapore, PwC, ING Group, and eBay.
Corporations have been moving into the acceleration space for quite some time. Some have made investments in independent accelerators, while others have formed their own. Companies like Siemens, IBM, Microsoft Ventures (in seven cities), Coca-Cola, Tyco, Warner Brothers, AOL, Deutsche Telekom, Citibank and South Korea’s SK Telecom are just a few. Min Park of SK Telecom Americas told TechCrunch last year that they launched their own because they saw a dearth in early-stage investment for new communications technologies.
“We are in an up cycle, but this time around corporates are not only re-engaging with venture capital but have entered the accelerator market – with a wide variety of different models,” Techstars Managing Director Jon Bradford wrote in tech.eu early last year. “In Europe today, there are already plenty of corporate accelerators, and their number is growing.”
Startupbootcamp was founded in 2010 by several founders, including Berlin-based Alex Farcet and Amsterdam-based Patrick de Zeeuw.