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22 May 2013

Unit of the year: Intel Capital

Arguably no corporate venturing unit globally has achieved this more convincingly than Intel Capital, the corporate venturing unit of the US-based chipmaker.

Author: Toby Lewis, Editor

There is probably nothing more important for a corporate venturing unit than that it can become an institution in its organisation. Arguably no corporate venturing unit globally has achieved this more convincingly than Intel Capital, the corporate venturing unit of the US-based chipmaker. To all appearances the unit has cemented itself as a key part of its US parent, investing more than $10.8bn in its long history.

As winner of the Global Corporate Venturing Unit of the Year award, Intel Capital last year demonstrated its durability as a dealmaking machine, even as Intel’s core market personal computing undergoes one of the biggest shifts in the competitive landscape in 20 years with the move towards smartphones and tablets, at the same time as the chipmaker’s chief executive Paul Otellini steps down.

Arvind Sodhani, president of Intel Capital and executive vice-president of Intel Corporation, said: "This recognition validates our unique ability to help entrepreneurs scale from start-up to global corporations. As a pre-eminent global investor, we are focused on helping entrepreneurs with the resources, tools and know-how they need to succeed by providing access to our business development programs, global network, tech expertise, and brand capital."

The unit, given its stature, has been in consideration for our unit of the year award since we were founded three years ago. Yet we think the past 12 months have demonstrated its durability, and its purposefulness is arguably unrivalled in the corporate venturing community.

Perhaps the biggest proof of this is its general activity. During 2012 Intel Capital made 150 investments worth $353m, including 64 new investments, 86 follow-on investments, and $254m in new investments. At least in volume of investments, this means Intel Capital was busier deploying capital than the most active venture capital firm, New Enterprise Associates, which invested more than $750m in at least 110 companies last year, according to news and data provider Thomson Reuters’ Venture
Capital Journal. This strong level of investment activity continued into the first quarter of this year – Intel Capital was the most active corporate venturing unit, according to Global Corporate Venturing research.

Sodhani said when the 2012 activity was reported: “2012 was an excellent year for us, with investments totalling $353m in 26 countries. In spite of global market uncertainty, in 2012 we had 35 exits, with seven IPOs [initial public offerings] and another 28 exited via a merger or acquisition, bringing our total historical number of deals to 1,276, with 201 IPOs and 317 companies acquired.” Market research firm Privco named Intel Capital the most active venture firm by realisations.

Among the exits, Intel Capital singled out AVG (NYSE), Vocera (NYSE), iMall (Naspers), Anobit (Apple), Gaikai (Sony), DynamicOps (VMware) and Perceptive Pixel (Microsoft) for special mention in a progress report at the end of last year.
Intel Capital is also the global firm par excellence. Sodhani said: “We expanded our global investment footprint to 54 countries, making first-time investments in Ghana, Estonia and Spain. We continued to deliver on our unique and differentiated value proposition to our portfolio companies by helping our portfolio companies grow.”

Even a rare financial misstep by Intel Capital, such as its investment in US-based wireless telecommunications company Clearwire – the unit sold its stake at a significant loss – is seeing signs of a resolution for the portfolio company, with bids being tabled for Clearwire by cellular company Sprint and satellite television provider Dish Network.

After another successful year, and given its scale, doubtless Intel Capital will be a strong contender for next year’s award as well.

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