The new VC will be based in the tech centers of Tel Aviv and Palo Alto
Tech giant HP announced today the launch of their new effort to discover and fund new innovators with the creation of their venture capital arm, HP Tech Ventures.
The new VC is reported to have two bases of operations, nestled into the tech centers of Tel Aviv and Palo Alto. Not having named a director for the venture in their press release, they do note that HP’s CTO Shane Wall and Chief Disruptor (I’d love to see that job description) Andrew Bolwell will be in charge of overseeing its development.
At this point, there has been no mention from the company regarding how much they intend to invest in this effort.
HP cited in their statement to the press that they are focused on finding companies working in the fields of 3D, virtual reality, hyper-mobility, IoT, and smart machines as priorities in their investments.
Part of the value proposal that HP believes will help attract new startups into their portfolio is their wealth of experience in the technology field, built over their 75 years of working in the sector.
The continued resurgence of the corporate in the startup ecosystem
HP is just the latest in the long line of corporate tech entities to enter the fray of investing and supporting the startup ecosystem, primarily with the intention of building a fast track to discover new innovations that they can later incorporate into their own products.
This is not as evil as it may seem, and is actually a net positive for the startup ecosystem. While HP may sound like they are just boasting when they tout their long history and over 18,000 patents, they actually have a lot to offer young startups in terms of resources and expert consulting on how to move their ideas forward.
Perhaps most crucially, in the startup-corporate relationship, there is a win-win for both sides when it comes to this arrangement. The corporates understand that the startup ecosystem, operating outside of the constraints of the traditional system, are producing amazing new technologies and developing ideas that will shape the future across multiple industries.
The fear of missing out on these innovations has led to the creation of corporate accelerators, which by my count has been a very successful model. By investing in the startups early, corporates like HP can set up important deal flows early on in the pipeline, identifying who are the hot movers and shakers to keep an eye on, which is far more valuable to them than the money that will be made by them if the company reaches an exit.
From the startup’s side, there are also significant advantages. Beyond the importance of the resources that can come from finding the right accelerator or investor, they can often turn to their corporate sponsor’s own customer base for making sales.
More corporates are looking to form their own VC arms, helping to support the ecosystem while staying tapped into the source. Microsoft, Alphabet, Salesforce, and American Express are just some of the companies that have recognized the importance of opening up VCs.
The types of companies that HP will decide to invest in may well signal where they see themselves heading technology and business-wise down the road, and should be an interesting process to watch.
Which corporates are you seeing getting into the VC game, and what do you think it means for the industry? Let us know in the comments.