Spain is the European country where there are the most corporations that have business units specifically dedicated to open innovation. This method is based on the intense collaboration of large companies with startups, according to the conclusions of the Open innovation report 2023. This study reveals that three out of four European companies opt for this formula, since they consider it essential in their business strategy. , both in the investment field and for the development of disruptive projects that transform your company or your sector in the context of current technological acceleration.
To analyze the role of corporations in innovation, Diálogos en La Vanguardia, with the collaboration of Telefónica, held a session last Tuesday, October 17 at the Monteverdi Club in Madrid that included interventions by the Group's director of open innovation Telefónica and general director of Wayra, Irene Gómez; the director of investments and institutional relations of Kfund – manager of Leadwind, of which Telefónica is an anchor investor –, Borja Santos, and the founder and general director of the startup invested by Kfund Quibim Quantitative Imaging Biomarkers in Medicine, Ángel Alberich-Bayarri.
The director of open innovation of the Telefónica Group and general director of Wayra, Irene Gómez, confirms that “corporations have an increasingly greater role in the investment ecosystem.” The purpose of this technology company when investing in startups is the “search for new strategies in a world that evolves very quickly.”
“The adoption of technology and investment in startups by corporations has greatly accelerated,” agrees the director of investments and institutional relations at Kfund, manager of the Leadwind investment vehicle that has Telefónica as an anchor investor. Other companies such as BBVA, Catalana Occidente and Estrella Galicia also participate in Leadwind, as well as other business investors and family offices. According to Borja Santos, the early growth fund, Leadwind, is an example of the extent to which corporate investment in open innovation “has become more sophisticated,” as it is bringing in the number of corporate investors with the common goal of establishing a “ “symbiotic relationship of the business ecosystem to generate value.”
Launched two years ago, this Kfund fund focused on the early growth phase, Santos explained, has managed to reach a capital of 250 million dollars. He has invested in startups such as Voicemod, a voice modification software company using artificial intelligence; Nflux, a platform also based on artificial intelligence, in this case to optimize operator-based processes for different industrial companies through computer vision; Digibee, an integration software company that facilitates seamless integrations for companies transitioning to the cloud; Factorial, a human resources platform for SMEs that streamlines time, talent and documentation management, and Quibim, a platform powered by artificial intelligence that specializes in precision medicine based on medical images.
The founder and CEO of Quibim, Ángel Alberich-Bayarri, whose startup offers hospital centers and pharmaceutical companies the analysis of medical images with artificial intelligence, highlighted that emerging companies bring “agility and the ability to adapt quickly and flexibly” to large corporations, in addition to offering them investment opportunities.
This “alliance,” explained Alberich-Bayarri, allows startups to have the “endorsement” of investment and collaboration from large companies. In addition, it gives them access to “investments that are very high, especially in the case of very intensive technologies – the so-called deeptech –, such as those that require a large computing infrastructure.” Interaction with large corporations also makes it easier for them to accelerate their growth and “position themselves in a more stable scenario to mature as a company.”
The benefits that open innovation brings to the business ecosystem, in the opinion of the director of Open Innovation of the Telefónica Group and general director of Wayra, Irene Gómez, are “tangible”. “According to Fortune 100, in 2000, 10% had corporate venture capital strategies, however, in 2022 the percentage reached 71%,” she recalled, to highlight this positive increase.
These data, Ángel Alberich Bayarri, show that “the relationship between corporations and startups has an impact on both parties.” For Borja Santos, the key to success is in the “balance between control and speed.”
Beyond financial objectives and technological development, Santos highlights “the value of the human team.” “Innovative talent is an intangible that has a great impact on the cultural transformation of companies,” adds Irene Gómez.
When opting for open innovation strategies, “there is no magic formula that works for all corporations, but rather it is about being able to understand what society asks for and how technology is changing the way of doing things.” ", warned Irene Gómez
The general director of Wayra pointed out that the program that aims to connect Telefónica with the entrepreneurial ecosystem around the world has a portfolio of 400 startups. Of them, more than 170 work for Telefónica. Among the most consolidated, Irene Gómez highlights that 70 startups they have opted for currently have a value of more than 50 million dollars. In total, the emerging companies invested by Wayra "have raised 3.5 billion euros, that is, more than ten times what Telefónica has invested in them", which shows for Irene Gómez that both the corporation and the startups obtain economic benefits thanks to to open innovation.
For a year now, Wayra has been managing capital from Telefónica Group companies through Íope Ventures and Vivo Ventures. Íope Ventures is a vehicle specialized in insurtech launched in September 2022 by Wayra and Telefónica Seguros to invest in startups with the potential to transform the insurance sector with disruptive business models and solutions that drive the digitalization of the sector. In the case of Vivo Ventures, the investment is initially focused on innovative Brazilian startups in diverse areas such as entertainment, education or health, among others.
Telefónica focuses on open innovation as a company within the technological group that “helps both the startup and the large corporation,” revealed Irene Gómez, who leads it with this “double objective,” since “every decision must take into account and balance both the benefit for the corporation and the startup.”
“When you have an investor with whom, in turn, you do business, it is difficult, but having a fund that accompanies both of us, in our case Leadwind, makes it less complicated,” celebrated the founder and CEO of the startup. Quibim. Ángel Alberich-Bayarri alluded to the expression skin in the game to refer to the formula in which the corporation is not only a client but also an investor in the startup, and that aligns its objectives with those of the emerging company with which it collaborates.
Alberich-Bayarri considers that the relationship between the corporation and the startup must be “symbiotic”, although with “relative freedom in a framework of non-exclusivity”, with the aim of establishing “a link that facilitates a real business model ”. “The relationship can be to go to the market or to collaborate internally,” said Irene Gómez, defender of collaboration, even with competitors in the same sector, to innovate together. “There are many possible formulas,” she insisted.
Among the trends, Irene Gómez pointed out that “verticalized funds” are being created, and gave the example of Iope Ventures, launched together with Telefónica Seguros in Spain. Another “turning point” is “expansion”, which in the case of Leadwind offers the guarantees of a “local operator with experience and international presence,” added Borja Santos. Among the technologies that are accelerating the most, the investor expert highlights artificial intelligence, although work is also being done on connectivity, smart mobility and other areas that "are converging with each other."
Open innovation will continue to be a way of competitiveness for the business ecosystem in the future, agreed the participants in the Dialogues session at La Vanguardia, with the collaboration of Telefónica. The director of investments and institutional relations at Kfund, which in one year has carried out final analysis of 30 companies, describes the “market appetite” as “incredible”.
On the part of corporations, Irene Gómez predicted that, despite the “moment of caution” due to the macroeconomic situation, “there are more and more corporations that are betting on venture capital.” The director of open innovation of the Telefónica Group and general director of Wayra recalled that, in the last year, they have made 25 investments for a total amount of 10.6 million euros and announced that her company “will continue investing to the extent that the group needs it, both for the current strategy and for the search for disruption.”
