Qualcomm Ventures is, compared with most corporate venture capital units, mature. Set up in 2000, the unit has successfully weathered the 2008 crash, CEO changes, and head of unit changes. How does it operate and maintain success?
Li said: “We have been in business for 18 years. We have been very consistent with our strategy over a long period of time, as well as through ups and downs in the marketplace. We started investing in the US, and we slowly expanded internationally.
“There is a lot of interest in corporate venture right now, with many companies setting up venture groups. It is very important to have very strong executive support, and we have strong support all the way through to the CEO. The other thing to keep in mind is that the venture business is a very long-term business. Many companies may enter, and a few years later, they get out. There was a wave around 2000, and many of them did not stick around. It is not something where you will get instantaneous returns. You need to have a much longer horizon, and [at Qualcomm] there is support from senior management.
“Over time, we have obviously seen change. The venture market has become more and more competitive, especially with a lot of new players entering the ecosystem. Thus, for us it is important to continually look at ways to improve how we operate, the speed at which we move, as well as to improve the value that we can add to portfolio companies. Our support goes beyond just funding. We can serve as a conduit for startups to work with a large company like Qualcomm, providing access to technology expertise and our ecosystem, which we have found to be of great value to startups. ”
A consistent approach is one thing, but what does that look like in practice? What is the investment thesis?
“We are known as a mobile and wireless technology company, but the company has evolved. We have a big focus on the internet of things (IoT), on automotive, artificial intelligence and verticals the company is actively pursuing. What we are trying to do is to take the technology we developed for mobile and figure out a way to leverage these technologies and apply them to different verticals.
“Our primary objective is to invest in companies in the broader Qualcomm ecosystem, so that could be customers or partners of ours that help us learn from the marketplace, or it could be companies that we can potentially sell products to, or companies that we can partner to go to market together.”
Those verticals are where Quinn, and Qualcomm, see potential growth for the company – 5G, IoT, automotive, digital health and mobile.
“I will highlight two areas. The first being IoT, where we are targeting certain verticals including consumer devices or enterprise. We look for devices that have a clear value proposition, and where it is a company we can work with to help them from a technology development standpoint. One example is a [home security] consumer device company we invested in a few years back, called Ring, which was recently acquired by Amazon. They have done a good job at executing the product, the price point is right, the value proposition is clear, and it is very easy to install from a consumer standpoint. We have worked with them over the years trying to explore ways to incorporate our technology into their product.
“In the enterprise IoT market, we invested in a company called RetailNext, which provides analytics for physical retail stores. They leverage a variety of sensors, cameras and wifi access point data, to provide a dashboard of where people are spending time, a heatmap of the store, and how long the checkout line is. They use computer vision and camera technologies to do this, and initially they were using a third-party camera. Over time they decided to develop their own camera, and we were able to work with them and help them with that effort. Today, all the cameras they deploy in stores include [Qualcomm’s] Snapdragon processor. The video processing, the computer vision, the recognition of the merchandise within stores, is all done locally on this camera.”
Digital health is another area in which Qualcomm seeks innovation. What are they looking at, given that e-health has such a broad spectrum?
“Our company’s background is not primarily in healthcare, so we go back to where we are strong, which is mobile. Thus, we focus on healthcare IoT and how we enable connectivity of devices, either as [professionally-administered] devices, or the devices patients use at home. For example, we have an investment in AliveCor, a company making a device which allows you, in conjunction with your phone, to measure your electrocardiographic signals. The other area is IT. Here we look at how to use technology to improve the efficiency of the healthcare system. An example of that is Doctor on Demand, which is providing a telemedicine service, so you can consult a doctor over your mobile devices.”
Quinn is thinking strategically for Qualcomm, with a clear mandate. Yet with such a large unit, and such a large fund – $1bn – how is the approach tailored for each portfolio company? What is being offered above competitors?
“One is the technology expertise we have. We have deep mobile and wireless expertise, and we can really help portfolio companies as they develop products and leverage that technology for their end product. In the example of Ring, they needed help on the technology front with determining what technology to use, which are areas we can really guide them in.
“The second area would be the vast customer or partner network Qualcomm has in the wireless ecosystem. We sell all around the world, we sell to many IoT-device companies, we sell into the automotive market, and we work with mobile operators globally. We leverage the network that we have, whether it is a customer or the partner, to help companies grow their business. If the company needs an introduction to an operator, or maybe a company is looking to expand internationally, we leverage the parent to help those companies grow both their market and their presence.
“Last, having boots on the ground in seven regions across the globe allows companies to leverage our global network. This allows us to provide a different level of support to our portfolio companies, such as providing guidance and insights into other markets and the nuances of doing business in those markets.”
Quinn is also backed by an impressive track record.
“We have had nine unicorn exits over the past eight years. Just this year alone we had three big exits – 99, a ride-sharing company in Brazil that was acquired by Didi; Ring, bought by Amazon; and more recently we had [Chinese bike-rental business] Mobike acquired by Meituan. We have had three unicorn exits this year so far. When Xioami goes public this year, we will have another unicorn, so it has been a great year for us from an exit standpoint. I am very excited for these companies and to see them growz to be mature.
While his work speaks for itself, Quinn is confident – “We have been farming unicorns at Qualcomm Ventures.”
With those successes in the bag, and more success likely to come, how does the next year look for Qualcomm Ventures? Li said: “I see us continuing our focus on key areas such as automotive, IoT, and artificial intelligence and will also continue to be active globally.”