There’s a corporate venture capital Renaissance underway, with everybody from General Electric to Anheuser Busch throwing money at tech startups. On Wednesday, one of the older players in the business will announce a new fund that it says will also make it one of the biggest.
SAP Ventures got its start 17 years ago and, three years back, spun out as an independent firm, with the German software giant as its sole investor. (It’s a technique that’s been used effectively by venture firms like BlueRun, which began life as Nokia’s in-house venture arm, and Scale Venture Partners, which was originally part of Bank of America.) Nino Marakovic, managing partner of SAP Ventures, tells me the idea is to be able to make investment decisions with an eye solely on potential return rather than on things like whether the parent company has a relationship with a competing startup.
His firm’s first fund, which was launched in 2011 with $350 million in capital, has invested in mid-to-late stage startups that range from enterprise software makers Box and Exact Target to consumer companies like LinkedIn and FitBit. With the fund fully invested, SAP Ventures today is announcing Fund 2, a $650 million pot in which SAP, again, is the only outside investor.
Together with a $450 million “fund of funds” that lets SAP Ventures put money indirectly into early stage and seed startups, Marakovic’s outfit boasts $1.4 billion under management. “We’re now one of the largest VCs in the world in terms of fresh capital available,” he said.
Marakovic figures the new fund will be invested at a clip of $100 million a year by his 20-person team, most of whom are in Palo Alto. But he’s also making plans to expand the fund of fund’s scope; currently, it invests in about a dozen venture firms, including August Capital, Data Collective and Germany’s Earlybird. Marakovic wants to hike that to 30 firms in the next few years, offering his portfolio companies the chance to work not just with SAP, its customers and suppliers but also with the hundreds of startups those partner venture firms have backed.
Marakovic envisions a keiretsu of more than 1,000 startups. Take that, Dave McClure.