Edit №040 — Weekly Newsletter on Corporate Innovation & Venture — A Tale of Two Strategies — sent June 14, 2020
The Editorial
We’re hearing two very different narratives around innovation in the current climate.
On one hand, it can seem a pretty cheery landscape, like some companies haven’t noticed the crisis. Open Innovation has yielded some inspiring results. Intel has been on a shopping spree. Facebook has decided to launch a ventures unit to spend some cash. The venture studio is blossoming (disclaimer: we’re biased about that).
On the other hand, the many many many articles on the importance of innovation, belie the real problem — it’s happening less and less. Innovation has AGAIN suffered and been cut from some agendas. UK innovation firm Rainmaking reported that, in just four weeks between mid-March and mid-April, the appetite for innovation (in US and Europe) dropped precipitously, nearly a third of CEOs they spoke with saying they planned to “delay or cancel innovation investment,” versus 8% who said that in March.
A conspicuous contradiction has surfaced: Leaders readily acknowledge that customer preferences are changing thanks to the crisis, and these same leaders are amongst those saying that they are going to innovate less- hamstringing their ability understand and serve these new needs.
All this despite the dismal results that awaited innovation-cutters out of the Great Recession. Back then it wasn’t just financial institutions who suffered — GM, Ford, Sony, Nokia, Motorola — these are some of the big names that nearly perished.
The same is true now. The cutters are not just those in the directly-hit industries of health care and hospitality — they range from consumer products and financial services, to manufacturing and high tech.
So, whose names will be added to the list post-pandemic?
Insights Corner
Recap on the latest industry news, insights, and signals
Facebook establishing a venture arm to invest in startups.
Corporate Venture / Axios. Facebook has been hiring seasoned tech investors to help lead a new “multimillion-dollar” investment fund within its experimental apps team. A source familiar with the company’s plans said the effort is not a general-purpose fund but rather a targeted effort to stay in close touch with the startup world. Facebook characterized the effort as an extension of the work it has done in the past with startup accelerators and hackathons.
Akin Note: Facebook is the latest corporate to launch a venture fund, seeking to become closer to the disruptor they once were. They’ll be hoping that their golden touch with acquisitions extends into venture, with the ambition to spot the next WhatsApp or Instagram, as well as putting a finger on the broader disruptive pulse. But in addition to all the challenges that traditional CVCs have to contend with, Facebook’s new venture fund will have to work even harder to lure startups due to their current reputation in the technology community and the potential one-sidedness of an early deal with such a monster platform.
Microsoft venture fund M12 opens office in India.
Corporate Venture / Business Insider. Microsoft venture fund M12 on Wednesday announced it has opened its office in Bengaluru to pursue investment opportunities, focusing on B2B software startups in applied AI, business applications, infrastructure, security and vanguard technology. The company said that local presence is a step forward in M12’s long-term commitment to the Indian startup ecosystem.
Gap to shutter Hill City brand.
Retail / Retail Dive. Gap is taking a step back from the athleisure market, shuttering its two year-old men’s athletics brand Hill City during a crisis that has caused many retailers to take a closer look at their businesses. “While the business is performing well, the financial impacts of COVID-19 have required the company to ruthlessly prioritize and reduce operating expenses. We will apply best learnings, talent, styles and innovation from the brand to our other brands as athleisure continues to grow.”
US e-commerce sales to jump 18% in 2020, but not enough to offset retail’s decline.
eCommerce / Tech Crunch. US e-commerce sales will jump 18% this year due to the impact of the coronavirus pandemic that forced more shoppers online, according to a new forecast released today by eMarketer. Overall retail sales dropped 10.5% in 2020, which is steeper than the 8.2% drop last seen in 2009, amid the recession. “This is the sharpest consumer spending freeze in decades in the U.S.,” said eMarketer senior forecasting analyst Cindy Liu, in a report. But with a silver lining, “Everything we’re seeing with e-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession,” said Andrew Lipsman, eMarketer principal analyst.
The Water Cooler — Conversation starters for around the (virtual) office
Willy Wonka-like chocolate factory to open outside Amsterdam. The Waiting List for $1,000 Haircuts Is Ballooning. If you thought your neighbors were bad,imagine living next to a TikTok house. The infamous Rocky Mountain treasure chest has finally been found after ten years. Gap has their “Fellow Kids” moment with the launch of Gap Teen. Who better to compare your quarantine “bubble” with than the Queen. A nine-year-old aims to be the youngest chess grandmaster ever.
Company U. — Lessons, wisdom, and best practices
How Marcus Aurelius Conquered Stress.
To say that Marcus Aurelius had a stressful life would be a preposterous understatement. He was overcome with anxiety, but openly worked through it and taught incredible lessons about it in his work Meditations. This past week Ryan Holiday wrote a great overview of what we can learn and how we can apply it. The key takeaways are below:
1️⃣ He worked through his problems with journaling — By taking the time to write, he was chipping away at his anxiety, just as we all can–in the morning, at night, on our lunch break. Whenever.
2️⃣ He constantly sought perspective — Sometimes he zoomed way out. He meditated on his insignificance. “The infinity of past and future gapes before us,” he wrote, “a chasm whose depths we cannot see. So it would take an idiot to feel self-importance or distress.”
3️⃣ He remained present — We are often anxious because of what we fear will happen next, or after what happens next. We worry about worst case scenarios. We dread potential obstacles. But Marcus, from Epictetus, knew that “Man is not worried by real problems so much as by his imagined anxieties about real problems.”
4️⃣ He separated the essential from the inessential — “If you seek tranquility, do less.” But then he makes a critical clarification, “Or (more accurately) do what’s essential… Because most of what we say and do is not essential. If you can eliminate it, you’ll have more time.”
5️⃣ He became a good friend to himself — Although he was firm and strong and self-disciplined, he did not whip himself. The key, he said, is to just focus on getting back on track. Don’t dwell. Don’t call yourself an idiot. Don’t smack your forehead in anger.
The Corporate Card — Corporate Venture & M&A Deals
Venture Deals
JD.com & Sumitomo Corporation join the $130 million Venture Round of Vietnamese eCommerce startup Tiki. eCommerce
GV invests in the $100 million Series G of cloud-based bioinformatics startup DNAnexus. Cloud Computing
Johnson & Johnson Innovation — JJDC joined the $100 million Series C of biotech startup Cue to speed the development of rapid Covid-19 diagnostics. BioTech
Pfizer Venture Investments & Bristol-Myers Squibb join the $85 million Series Bof regenerative medicine for CNS disorders startup Autobahn Therapeutics. BioTech
GV led the $63 million Series A of Gene-Editing startup Verve Therapeutics. BioTech
GV co-led the $60 million Series C of care collaboration platform PatientPing. BioTech
Dell Technologies Capital invests in the $43 million Series E of AI model monitoring startup Domino Data Lab. Artificial Intelligence
Johnson & Johnson Innovation — JJDC & Varian Medical Systems join the $40 million Series C of medical device startup HistoSonics. Medical Device
Dell Technologies Capital invests in the $30 million Series B of open-source database startup Yugabyte. Open Source
JP Morgan & Goldman Sachs & Barclays invest $27 million in the Venture Round of digital document startup H4. FinTech
Saudi Aramco Entrepreneurship Ventures led the $25 million Venture Round of Islamic Investment Platform Wahed Invest. FinTech
Bpifrance co-led the $23.5 million Series C of SME financial service platform iBanFirsta. FinTech
Nationwide Ventures invests in the $16 million Series B of AI underwriting startup Planck. InsurTech
Northwell Ventures co-led the $12 million Series B of virtual care startup Conversa Health. Health Care
The Boston Consulting Group joined the $11.6 million Series B of travel startup Journera. Travel
Wix invested in the $8 million Series A of employee collaboration startup Spike. Collaboration
Google’s AI investment fund Gradient Ventures invested in the $7.6 million Seed Round of enterprise data onboarding startup Flatfile. Artificial Intelligence
Bpifrance joined the $6.75 million Series A of HealthTech startup Ambler. HealthTech
Swisscom Ventures joined the $3.25 million Series A of BioTech startup Scailyte. BioTech
Shell Ventures led the $2.2 million Series C of industrial AI startup Veros Systems with participation Chevron Technology Ventures. Artificial Intelligence
Acquisitions
Just Eat confirms it is acquiring Grubhub for a reported $7.3bn. Delivery
Novo Nordisk expands into cardiovascular disease through the acquisition of Corvidia for a deal worth up to $2.bn. Health Care
The Bulletin Board — Job openings and opportunities
Product Strategy Lead, New Product Experimentation at Facebook. This specific role will lead Product Strategy for the New Product Experimentation (NPE) organization. NPE was developed to generate a pipeline of new applications and experiences, and responsible for generating and nurturing true “zero to one” ideas that can change people’s lives and everyday experiences. A key focus for the NPE team is on creating product experiences that help fulfill the Facebook mission, creating community and bringing the world closer together.
Brand Manager, Innovation Lighthouse Incubator at Ocean Spray Cranberries.The Brand Manager for Innovation Lighthouse Incubator will be assigned to a start-up business and empowered to lead its incubation and growth. You will not do it alone. You will be responsible for leading cross functional teams in planning, execution and evaluation of your start-up’s learning and growth goals. The role is a combination of Incubating and Growing your startup brand to serve both user’s and customer’s needs and journey.
