The Top 25: Rob Salvagno, Cisco Investments
Rob Salvagno is head of corporate development at US-based networking equipment provider Cisco and its corporate venturing capital vehicle Cisco Investments.
Cisco has so far acquired around 200 companies, while Cisco Investments invests an estimated $200m to $300m a year, from early to late stages. It has more than $2bn of investments in more than 120 companies and 45 venture funds.
In December last year, Cisco acquired two companies – US-based fabless semiconductor technology producer Luxtera for $660m as reported by Bloomberg, and US-based network analytics platform provider Singularity Networks for an undisclosed amount.
Regarding the former acquisition, Salvagno said at the time: “As system port capacity increases from 100GbE to 400GbE and beyond, optics plays an increasingly important role in addressing network infrastructure constraints, particularly density and power requirements.”
And about the latter, he wrote on Cisco’s blog: “Service providers today are challenged to meet intense demands for always-on connectivity powered by reliable, high-speed bandwidth. They need a holistic view of network performance to anticipate and proactively manage their traffic patterns. With network automation software and innovative data collection techniques, we are helping our service provider customers transform how they operate their infrastructure.”
This echoes Salvagno’s discussion in January last year at the Global Corporate Venturing and Innovation Summit the unit’s investment strategy and its progress since he stepped into his leadership role four years ago.
Salvagno, who runs a team of more than 40 and reports to Cisco’s chief financial officer Kelly Kramer, said having the same team working on both investments and acquisitions had been key in driving the unit’s success. He added: “Although there is still a long way to go, we have the opportunity to be a top investor. We do a great job at tracking innovation, so what we really need to do now is build our core value proposition.”
This, Salvagno said, was crucial for a unit’s success. When setting up a unit, CVCs should first determine their investment approach. Was the goal to strengthen existing businesses, or to track innovation outside that? “These are two different philosophies, and you need to be clear about them both internally and externally,” he said. “There is a lot of money out there, so you really have to look at what makes you unique. It is about believing in your core value proposition, and how it may benefit your portfolio companies.”
The company in October 2015 promoted Salvagno after Hilton Romanski, previously senior vice-president of corporate development, became chief strategy officer. Romanski, however, left Cisco in September last year to join private equity firm Siris Capital and was replaced by Anuj Kapur, formerly senior vice-president of networking and security.
Salvagno had joined Cisco at the end of the 1990s dot.com boom, having been a tech investment banker at storied firms Donaldson, Lufkin & Jenrette and PaineWebber after graduating in economics at Stanford University in 1997.
Together, corporate development and Cisco Investments have a worldwide presence with teams covering the US, Israel, China, Asia-Pacific, Japan and Europe.
Founded in 1993, Cisco has committed to multiple VC funds, notably SoftBank’s China fund, which invested in online retailer Alibaba. Last year, Cisco said it was committing to a new fund called Catalyst Labs Fund I, a $500m venture capital fund according to a regulatory filing, being set up in October by Jon Sakoda, a 12-year veteran at VC firm New Enterprise Associates. Cisco’s strategic priorities are in the areas of data centres, cloud, security, big data, internet of things and core network equipment.
Recent commitments in India have shown the country’s importance to Cisco. Cisco has long been active in India, having pledged in 2010 to invest $200m in the country over a three-to-five period. It allocated $40m to early-stage startups in the country in 2014 before expanding the initiative to $100m in 2016, where about 50 projects have been completed, such as 10 innovation labs, three smart city showcases and a cyber-range.
Cisco Investments has funded 20 India-based startups and in March last year, it committed an undisclosed amount to venture capital firm IDG Ventures India’s third fund, the Economic Times reported.
In February 2018, Cisco became a limited partner in VC firm Stellaris Venture Partners’ first fund, which has a $100m target. The fund has already secured capital from enterprise software producer SAP and IT services firm Infosys.
At the time, Salvagno said: “Cisco has a rich history of participating in India’s technology ecosystem and investing directly in local innovation over the past decade.”
And he added in June 2018 in a statement: “I am very bullish on India. I see our participation, going forward, only increasing. I think that is reflective of where the market is going, and that is also reflective of how Cisco is in a position to leverage that. We think that there is more opportunity for enterprise and B2B (business-to-business) plays in India.”
Its history is equally rich around the rest of the world under Salvagno.