Driving Strategic Value through Corporate Venture Capital

Since 2014, corporate venture capital (CVC) has participated in over 21% of venture capital deals with 46% of total VC deal value. Yet, according to PitchBook the number of CVC-backed companies their CVC investors eventually acquired has remained below 4%.

If mergers and acquisitions (M&A) aren’t the primary drivers of the active CVC landscape, what motivates companies worldwide to invest in startups?

Investing for strategic advantage

As the world of technology has continued to flourish and startup companies have emerged as drivers of innovation and markets, larger corporations have looked for ways to tap into the startup and venture communities to drive new business growth and stay competitive. Corporate venture capital allows companies to look beyond their core business to explore and drive future growth opportunities.

Unlike traditional venture capital firms, in many cases CVCs invest strategically to align with their parent company’s long-term goals. These investments drive market and technology insights and help foster strategic partnerships that provide startups with access to enterprise resources — such as distribution channels, marketing, and manufacturing — while allowing corporations to stay ahead of industry trends and technological advancements.

Value creation

As HP’s corporate venture arm, HP Tech Ventures focuses on three key areas of value creation:

1. Strategic Investments — HP Tech Ventures invests in startups aligned with our corporate strategy to drive insights, deepen commercial relationships, strengthen HP’s market position, and hedge against future industry shifts. These investments aim to drive growth while also delivering financial returns.
2. Startup Partnerships — Supporting commercial partnerships with startups complements HP’s R&D efforts, helping to fill technology gaps and enhance product differentiation.
3. Startup and Venture Insights — Investing in startups provides HP valuable insights into emerging markets and disruptive technologies. By leveraging these insights, HP can refine its strategy and remain at the forefront of industry innovation.

Example: creating value in Healthcare

HP’s investment and partnership with Adaptiiv led to the development of 3D-printed, personalized accessories for cancer radiation treatments, enabling more precise and consistent radiation dosage.

Example: creating value in Retail

HP’s investment and partnership with AiFi is enabling game-changing retail experiences. AiFi’s autonomous checkout solution is powered by AI computer vision and demonstrates what happens when technology and retail converge to really deliver on what the customer wants: convenience, speed, ease, and a more informed, personalized shopping experience. AiFi’s solution leverages the HP Engage Express and HP Z Workstations to power its next generation retail experience.

Tapping into trends

Strategic investing also offers corporations a way to tap into trends and innovations early. Investing in startups developing new technologies and business models in emerging areas allow companies to stay ahead of customer demand and position themselves for competitive success. A great example of this is the staggering number of AI Funds created over the past few years by corporations. From Google’s launch of Gradient back in 2017 to Cisco’s $1B AI fund established in 2024 there is ongoing, deep corporate investing in this emerging area. In 2024, AI alone accounted for 37% of CVC-backed funding and 21% of CVC deals.

Shaping your future through investment

Long-term growth and adaptability in a rapidly changing world require companies to develop diverse strategic capabilities. Engaging with the startup ecosystem has become a crucial component of corporate success. HP Tech Ventures is dedicated to this mission, using startup investing as a strategic tool to drive innovation and enable future growth.