Corporate Venture Capital funds or CVC funds are investment vehicles of large companies that actively invest in startups, mostly directly, but sometimes through VC firms. A few global examples of CVCs include Intel, Google, Microsoft, Meta, among others. In India too, the space is slowly but steadily seeing increased participation. “CVC concept is new to India. Large corporates are not used to taking bets on early-stage startups and partnering with founders who are working on ideas that have the potential to disrupt existing business models. However, that is fast changing,” said Yagnesh Sanghrajka, co-founder and CFO, 100X.VC.
From what is observed globally and in India so far, these corporates have a separate team that runs the CVC independently and adopts the best practices of Venture Capital. Further, CVC investment is a win-win for both corporates and startups. While it gives large companies an additional revenue stream, it gives startups access to the vast network of the company and mentorship of corporate leaders.
THE BENEFITS OF STARTUP INVESTING: Investing in startups is a long-term strategy that allows corporations to tap into innovative ideas and gain early access to emerging technologies. “The startups can disrupt their industries, become potential future competitors, or allow the corporation to expand in new sectors. This allows corporations to diversify their portfolios and potentially achieve financial returns in the long-term,” said Rohan Joseph, Vice President, head of Global Investments and Corporate, Times Bridge & The Times Group. According to Joseph, 20% of all startup funding deals in India now involve a corporate investor or a family office fund.
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