Early CVC success can prove its worthiness and generate goodwill with the parent organization, which translates into autonomy and nimbleness that breeds further success. 
Swisscom Ventures: Wielding Autonomy to Create Partnerships
Interviewed by on March 14, 2024
Strategic consulting in an industry leader like Deloitte’s London office seems like the perfect job for an Oxford graduate with an MA in philosophy, politics, and economics. But as Jennifer Webb told TDK Ventures President and Corporate Venturing Insider host Nicolas Sauvage, “Combining impact and long-term relationships with my companies was something I wasn’t getting from consulting.”
So, she quickly transitioned to the venture scene in 2014. She is now an investment director at Swisscom Ventures.
From Strategy Consulting to Corporate Venturing
One of the first potential investments she considered was a carbon accounting platform called Sweeps. Instead of investing, Swisscom decided to partner with Sweeps to build a Swisscom B2B enterprise solution.
Jennifer’s consultancy background, particularly her work on the offline-to-online transition for clients like Smiths News, has provided her with the experience and insights she needs to act on her observation that industries are profoundly influenced by digitalization’s effects. This realization helped her foresee sustainability as the next significant wave in digital transformation. Today, she identifies sustainability and AI as pivotal trends shaping investment strategies.
The Role of Swisscom Ventures
Swisscom Ventures is the corporate venture capital arm of Swisscom, Switzerland’s leading telecommunications and software integration company. Established in 2007, Swisscom Ventures operates with a dual focus: generating financial returns and creating strategic value for the parent company.
“Swisscom Ventures started in 2007, with our founder Dominique Mégret, and it was never really formally approved within Swisscom,” Jennifer said. “Somehow Dominique got his hands on a few million dollars and started to make disruptive telecommunications-related investments here in Silicon Valley.”
By 2009, one of the investments, Quantena, IPO’d bringing in large revenues.
Financially Driven; Strategically Enabled
That early financial success has given Swisscom Ventures a long leash to operate independently of and uniquely compared to many other CVCs. Since its founding, the fund has adhered to a mindset reminiscent of financial VCs, while adding strategic value through its connection to Swisscom’s vast B2B network. This dual approach is evident in their investment strategies and value-creation processes.
“The investment strategy is financially driven,” Jennifer explained. “The value creation is for afterwards.”
Swisscom Ventures stays agile by keeping its operations free from typical corporate constraints, which allows for swift decision-making and execution. This ability to move quickly has been crucial in securing competitive deals, particularly in fast-paced markets like Silicon Valley.
Sustainability and Strategic Collaboration
Jennifer appreciates the autonomy she wields at Swisscom Ventures, as it allows her to lead the sustainability investment theme to catalyze stakes that align with Swisscom’s sustainability goals and can scale across Swiss businesses.
“The tail doesn’t wag the dog,” she is quick to note. “We can’t control the tanker; we are kind of (Swisscom’s) scanning function. But the tanker takes time to move.”
Still, Swisscom Ventures has been able to move the tanker’s rudder a number of times. The first was with the previously mentioned fruitful partnership with Sweep, carbon accounting. The second is Yokoy, a Swiss expense management solution in Swisscom’s portfolio. It recently signed a joint marketing agreement with Swisscom, incorporating the company into Swisscom’s strategy.
Unique Multi-LP Structure and Challenges
Swisscom Ventures distinguishes itself by operating a fund with multiple limited partners, a rarity among CVCs. This structure allows it to draw capital from various sources, including private and corporate Swiss pension funds. The first external fund, initiated in 2018, comprised 19 LPs, enabling the organization to compete more effectively in the venture market.
Jennifer works to balance financial discipline with strategic value creation. For follow-on investments, she and her team adhere to strict criteria, ensuring each investment has the potential for substantial returns. Jennifer emphasized the importance of treating follow-on decisions with the same rigor as initial investments. They evaluate several criteria before following on. When they make the initial investment, they keep reserves equal to that investment for potential follow-on. This ensures sufficient capital is available to help the portfolio as it grows. Next, they decide if their investment’s return profile would still deliver 3x or more for their limited partners. If it does, they are more likely to commit the reserve to additional funding.
Swisscom Ventures’ global investment strategy necessitates a data-driven approach to sourcing deals. Jennifer underscored that investment speed is in Swisscom’s DNA.
“In order to get into these great deals, we have to be able to move quickly,” she said. “So we need to do something within two to three weeks.”
This requires fast turnarounds and streamlined decisions that usually only VCs can accomplish. Additionally, the team takes a judicious approach to board involvement when making investments, focusing on adding value without overextending their commitments.
The Future: AI and Beyond
Jennifer has been investigating “sustainable computing…(computing) in a more energy-efficient, high-performance way.”
She said several processes promise to cut costs and environmental concerns. Jennifer finds it encouraging that impact and sustainability-related deals now constitute a significantly larger portion of the deal flow, growing from a niche 1% to 20–30%. This shift reflects a broader trend within venture capital towards aligning financial returns with positive environmental and social impact.
Additionally, Jennifer is interested in AI as a technology enabler. Focusing solely on generative AI delivers only a limited perspective on AI’s broad implications and applications
In Jennifer’s view, successful AI investments require data moats, industry moats, and distinct services that establish a differentiated offering. She doesn’t see that with many companies. Nonetheless, Swisscom has begun to integrate AI to evaluate investments and pursue an increasingly data-driven investment approach.
