In a world increasingly driven by rapid technological change and evolving consumer demands, corporations are being challenged to innovate faster and more effectively than ever before. Traditional methods of innovation, rooted in internal R&D, are sometimes not sufficient on their own. To stay competitive and tap into disruptive technologies, many corporations are turning to Corporate Venture Capital (CVC).
What is Corporate Venture Capital?
Corporate Venture Capital (CVC) refers to the investment of corporate funds directly into external startup companies. Unlike traditional venture capital, which primarily seeks financial returns, CVCs have dual objectives: generating strategic value and achieving financial gains. These investment arms allow corporates to monitor emerging technologies, gain early access to innovation, and potentially integrate new solutions into their core operations.
Over the past five years, Corporate Venture Capital has experienced substantial growth, solidifying its role as a critical component of corporate innovation strategies. In 2024, global CVC-backed funding reached $65.9 billion, marking a 20% year-over-year increase, with the United States leading this surge with a 39% rise to $42.8 billion. Notably, CVC-backed deals in 2024 accounted for 35% of total deal value, the highest share since 2019. This upward trajectory underscores the growing importance of CVCs in driving innovation and strategic growth across industries.1
The structures of CVCs can vary. Some corporations build in-house CVCs, where employees manage the venture fund internally, embedding the investment team within the corporate organization. Others opt for CVC-as-a-Service models, partnering with external venture firms to operate the fund independently. This approach leverages the specialized expertise and expansive networks of venture capital firms.
As an example of an in-house CVC, Leaps by Bayer, established in 2015 as the corporate venture arm of Bayer AG, focuses on transformative innovations in the life sciences, with a particular emphasis on health and agriculture. Since its inception, the fund has committed over $2 billion across more than 65 companies, targeting breakthrough solutions to ten of the most significant challenges facing humanity today. Similarly, Corteva launched ‘Corteva Catalyst,’ a corporate venture capital and strategic partnership platform aimed at accessing and bringing to market agricultural innovations that align closely.
CVCs provide startups with not just capital, but also access to market channels, customers, and operational expertise. For corporations, it’s a way to inject agility into their business models and stay ahead of disruptive trends.
The Role of VC Firms in Building CVCs
Establishing a CVC requires venture investing experience, infrastructure, and deep connections within startup ecosystems—something many corporations lack. This is where venture capital firms can play a transformative role.
Venture capital firms bring operational experience in fund management, a rich pipeline of startup opportunities, and a nuanced understanding of startup needs and growth trajectories. In partnering with corporations, VC firms act as operators, advisors, and ecosystem builders. The result is a hybrid model: corporates contribute technology assessment, and pathways for growth while VC firms execute the fund’s operations, from deal sourcing to portfolio management. Importantly, VC oversight introduces disciplined, ROI-driven company selection criteria and post investment guidance. While strategic fit is often a priority for corporates, a focus on financial rigor and ROI is essential for attracting external capital from financially motivated investors and ensuring long-term success.
This model enables corporations to fast-track their venture efforts without having to build in-house capabilities from scratch while leveraging external VC expertise and ecosystems.
This collaboration is reshaping industry partnerships by introducing faster innovation cycles, new collaborative models, and stronger bridges between established corporations and agile startups. By leveraging the VC firm’s network and investment processes, corporations can more rapidly pilot new technologies, co-develop solutions with startups, and adapt to market changes with greater flexibility.
Case Study: Kagome and SVG Ventures |THRIVE
An example of this model in action is the strategic partnership between SVG Ventures and Kagome, a leading multinational, Japanese food and beverage company known for its tomato-based products, vegetable juices, and commitment to promoting health and sustainable agriculture.
In 2024, Kagome partnered with SVG Ventures to launch a $50 million corporate venture capital fund, the SVG Ventures Sunrise Fund with SVG serving as the fund’s General Partner.
This partnership offers a new model for how corporate venture capital can be structured. Rather than building a fund team internally, Kagome leveraged SVG Ventures’ established infrastructure — gaining immediate access to a high-quality global pipeline of early-stage startups, breakthrough agtech solutions, and opportunities for strategic collaboration and investment.
What makes this collaboration groundbreaking is how it combines Kagome’s industry expertise with SVG Ventures venture capabilities to create an end-to-end innovation engine. “At Kagome, it must be said that our agri-food industry has faced increasingly difficult circumstances in recent years. There appears to be an imbalance between the agri-environment and technology. History has shown that innovation often arises during such periods of imbalance. We believe that innovation is key to overcoming the significant challenges facing global agriculture today. Our partnership with SVG Ventures and the creation of the Sunrise Agri Venture Fund is a testament to our commitment to driving sustainable solutions that will not only strengthen our company activities but also benefit the broader agricultural community and its stakeholders. By investing in and collaborating with forward-thinking startups, we are taking proactive steps to address the impacts of climate change and ensure the future resilience of food systems worldwide” said Mr Hiroyuki Ueda, Kagome Global Agri Research & Business Center. The Sunrise Fund has already made its first investment in Heritable Ag and is in due diligence with multiple others.
The Future of CVC
As innovation becomes more open, fast-moving, and global—driven in part by the rapid proliferation of technologies like artificial intelligence—Corporate Venture Capital is poised to play an increasingly central role in helping corporations stay competitive and relevant. These emerging technologies are reshaping industries at unprecedented speed, making it critical for corporations to tap into external innovation pipelines. Yet, launching a successful CVC requires more than just capital; it demands strategic clarity, operational excellence, and the right partners to navigate and lead in this evolving landscape.
As corporations seek to future-proof their business models, Corporate Venture Capital is increasingly recognized not just as an investment mechanism, but as a vital strategic capability. And for VC firms, there’s a growing opportunity to help shape the future of corporate innovation.
The next wave of industry transformation won’t happen in silos. It will be built through bold partnerships—and CVCs are leading the way.
References
- https://www.cbinsights.com/research/report/corporate-venture-capital-trends-2024/
