Strategy & Governance
Written by Linnea Palmertz
September 8, 2022

Three ways big corporations are making an impact through corporate venturing

The need to accelerate change is more important than ever. Startups working to solve global challenges are making money on a brighter future, but for large corporations taking social responsibility is often perceived as a cost. Many established companies now turn to corporate venturing as a means to achieve both social and financial results. We have identified three ways some of the world’s largest and most influential corporations are making an impact through corporate venturing. 

Invest with purpose

One way to make a positive difference is by supporting the founders of impact startups. Many large corporations already have their own venture capital (VC) funds that they use to identify promising startups, often industry related, and invest in them. Here, corporations have a unique opportunity to steer their investments in a direction that creates social value. Surely, we see more and more companies establishing VC arms with the sole purpose of investing in and supporting impact startups. A few examples include the Climate Innovation Fund at Microsoft, Venture Impact Fund at Salesforce,  Patagonia’s Tin Shed Ventures or +impact that is a joint initiative between Danske Bank, WeWork Labs and Rise.

Although corporate venture capital is a great way to support the startup community, studies have shown that there are more cost-effective and faster ways to get results from corporate venturing and make a difference.

Partner for impact

A radically faster and less costly approach is to adopt the venture client model, where you search for existing startups to partner with and together set out to solve global challenges. It’s a win-win situation – the startup benefits from the corporation’s industry knowledge, resources, relationships and brand recognition, and in turn the corporation gets insight into the innovative ideas, new technologies and entrepreneurial talent within the startup.

European energy provider Vattenfall is a great example of a company using partnerships and the venture client model for the greater good. Their innovation strategy involves entering strategic partnerships with startups and forward-thinking companies that are working towards the same goal as Vattenfall: a fossil-free tomorrow. Ongoing partnerships include piloting mobile energy storage technology with startup AirForesty and building the first truly fossil-free vehicle together with electric motorcycle manufacturer CAKE.

Build for tomorrow

Another effective way to drive change is to become even more involved and build an impact startup yourself. This is sometimes called corporate venture building. By setting up a venture building unit with clearly defined social goals, you have an opportunity to make a real impact for the corporation’s local community or the global arena. Building the next impact startup yourself is not only an opportunity to take social responsibility, but could also yield new revenue streams and have other spillover effects for the parent company.

The moonshot factory and innovation lab ‘X’ is a venture building effort at Google with a clearly formulated goal: to make a 10x impact on the world’s most intractable problems. Although the moonshot factory focuses primarily on the initial stages of development, the ultimate goal is to take the best ideas and spin off as independent businesses with significant impact.

Invest, partner and build – making a threefold impact

German energy company Siemens has an extensive corporate venturing initiative focused on a green mission. As Illai Gescheit, Partner at Siemens Energy Ventures cleverly puts it “in the climate and energy sector, no single business or company will save the planet alone and we must do it together”. With what they call a 3V’s model, the venture team at Siemens works through various means to make a positive impact on the world. The three V’s in their model stands for Venture capital, Venture clienting and Venture building, and with this strategy, Siemens manages to cover all three approaches to making an impact through corporate venturing.

Strategy & Governance
Written by Linnea Palmertz
September 8, 2022