Does it make sense that a company may try its hand at being a venture capitalist? Absolutely. Corporate venture capital (CVC) is booming and today, nearly a third of all deals include a CVC. Most companies recognize that organic growth alone will fall short of growth targets and are seeking new ways to drive efficiencies, stay innovative and fuel outsized growth targets.
Investing in startups is an opportunity to make smaller bets on innovative ideas without having to fund the entire development internally. Companies gain early access to new technologies that can advance company goals or deliver insights into potential competitors of the future.
Novelis, the world’s leading producer of flat-rolled aluminum products and largest recycler of aluminum, was seeking ways to enhance product quality, lower costs, maintain their competitive edge and reach new growth markets. Recognizing a need to supercharge their efforts to meet their decarbonization goals, Novelis approached 19Y to help them work through the process of establishing a corporate venture capital group.
19Y initiated introductions to industry experts and innovation networks to help Novelis get started and determine what structure would work best. This included, how to allocate the funds, how to organize the CVC and overall objectives. As members of the ventures team, 19Y works collaboratively on discovery efforts to fill the pipeline and delivers investment due diligence. Today, in support of their investment thesis, Novelis Ventures has built an exciting portfolio of investments across recycling technologies, mobility solutions, industry 4.0, carbon reduction and electrification.
Access to expertise and networks are time consuming to acquire which is why if you are considering embarking on a journey to become a corporate venture capitalist, let us know.