Is CVC the “fun uncle” of startup investing?

This was one of the clearest explanations I have heard recently for why many corporate investors prefer to follow rather than lead funding rounds. It was not about confidence in due diligence, or even cheque size. It was about roles, as one experienced CVC investor told me. 

“The person who writes the biggest cheque is the one the founder or CEO calls when things are on fire. I want to be the fun uncle. You want to play around with some ideas? Let’s run experiments, launch rockets in the backyard together — that kind of vibe,” he said. 

That is not to say this particular CVC is casual about its role in a syndicate. It works to VC timelines and follows the same rigorous process. But it knows what it brings: industrial production facilities, sector relationships and joint projects — the rockets in the backyard, or perhaps the kind of overly candid relationship advice your drunken aunt might offer at a family barbecue. It takes a village, right?  

One of those opportunities to play and experiment is coming up for startups working on 3D technologies, as a new innovation challenge is launched by NatureWorks, a joint venture between GC (PTT Global Chemical) and Cargill, the maker of Ingeo, a proprietary, plant-based polylactic acid (PLA) biopolymer. PLA is already widely used in 3D printing, but NatureWorks is looking for ideas on how to improve the material’s performance for new ways to use it in 3D printing. Apply by August 2, either through the Chemical Angel Network or by emailing Lisa Dufresne at GC.  

Meanwhile, fun uncles are getting a bit thinner on the ground in the UK, as we already noted last week, with BP closing down its investment arm. That move feels aligned with an overall decrease in investment momentum by the whole oil and gas sector, seen in our quarterly numbers. A more volatile environment, which has seen oil prices seesaw between $71 and $126 dollars a barrel through different phases of the US-Iran conflict, has undoubtedly played a role and we’ve also seen a continuing move away from sustainability investments as the current US administration rolls back subsidies, grants and tax incentives for green projects.  

In contrast, fun uncles seem to be on the rise in Germany, where we saw a new CVC unit set up by healthcare company Fresenius. This is the latest in a series of moves which have seen German corporations commit more to startup investment. Bosch not only launched a new €200m fund to build new deep tech ventures but, together with Scheffler, has been a prominent investor in several recent European AI and robotics rounds. Deutsche Telekom-affiliated DTCP, together with German peers Hensoldt and Porsche, launched a €500m defence innovation fund earlier this year.  

Commitment to corporate venture does go in waves, waxing and waning across different regions, but it is interesting to see UK and German companies moving in such opposite directions when it comes to this, and, it remains to be seen if, as GCV CEO Jim Mawson pointed out in an opinion piece last week, the UK economy will eventually pay the price of this pullback. 

One final request this week: if your company has a venture building arm and you haven’t already filled in our survey, please take a moment to do that now. This is the second edition of the project we started last year, aiming to provide a picture of what venture building models and methodologies companies are using — and which of these seem to be providing the best results. All responses are anonymous, and you’ll receive an advance copy of the results! 

This editor’s note was first published in GCV’s Blueprint newsletter, which tracks corporate venture news, key deals, new funds best practice and jobs.

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