The Rise of Corporate Venture Capital in Europe

Since the rise of the first successful VC firms, it has brought attention to the big players in the corporate world. As we know, large companies are less open to high risks because they have more liabilities and responsibilities at their stage of business. 

But the corporate world decided not to close the door to this idea of venture, but to set a specific budget and support their companies in that way. Such players as Google, Samsung, Shell, and many more have their VCs. The main idea is a bit different, but it's enormously helpful for new ventures.

Most CVCs focus on building an ecosystem around their companies to find new verticals of business and to enhance their existing product to compete with other companies. For the startup, it is also a big win, because while you are receiving a grant or funding, you have a clear strategy for the development of your company, and you can gain a lot of resources from the corporation, knowledge, and in the future, this company may acquire you, which shows the liquidity that the company can have.

The growth of CVC in Europe

In Europe, the CVC market has grown a lot. Since 2015, the amount of investment in Europe tripled by 2023. These results show that European corporations are taking it much more seriously to stay competitive.

Here are a couple of reasons why it's happened:

• Europe opened to digital transformation. Many traditional sectors started to invest in startups that are working in AI, Fintech, and cloud technologies to enhance their capabilities in these sectors.

• The second important point is that Net zero regulation motivates firms to invest in that to keep their business, and receive tax benefits, which in the same way increase social responsibility.

• Also, since the start of global uncertainty and cutting budgets generally in the VC space, CVC offers this stability, which many startups need. This stability is highly valuable in today's environment.

Current CVCs:

Today, most larger corporations have their own venture department, innovation lab, or partnerships with external funds. Among these are: Salesforce Ventures, Uniqa Ventures, GV Ventures, Shell Ventures, BMW, and Schneider Electric Ventures. These firms invest in many industries, which gives a broad range of new ventures to reach.

Let's look at the example. Energy company looks for clean energy solutions, which would be easier to support the existing solution on the market.

For startups, this growth of the CVC network gives them more chances to get the right partner. Startups can present their products, form partnerships, and get access to their resources.

The road ahead

The recent boom of AI has created a really big demand across all industries to develop productivity in companies. Many CVCs are opened to invest more in their R&D and practice corporate investment. 

Looking forward, we can expect that more European companies will enter the venture capital space. For new ventures, it's a great opportunity to research which corporations still do not have this and reach out to them in the space where it may help that company.

Conclusion

The rise of CVC unlocked opportunities for large companies to outsource their innovations. Firms are investing in innovations that help them grow.

Looking from a startup's point of view, it's a really great benefit to access capital, knowledge, and global reach from almost the start. These resources can help the new venture grow in that space.

These partnerships are building a new generation of innovations across Europe. It connects entrepreneurship with existing working models, which helps to grow both sides. More corporations recognize that and are investing in the new ventures.