Corporate Venture Capital

The terms venture capital and corporate venture capital

are becoming increasingly common in the business world of large corporations and startups. These two vehicles work hand in hand with entrepreneurs, startups, and other key players in the ecosystem to provide solutions to the challenges faced by each industry. This is done in a coordinated manner with the objective to provide innovation and economic or strategic return to each of the parties involved.

Keep reading to learn more about how venture capital and corporate models are working towards a more innovative, sustainable, efficient, and productive industry.

What is Venture Capital?

Venture capital, also known as VC, is a financial tool for companies and a vehicle for institutional investors to participate in emerging businesses.
Therefore, it is an opportunity for new companies to secure funding, strengthen their business models, and/or explore new markets by receiving money in the short-term. As is usually the case, venture capital investors tend to have a purely economic motive and will have a negotiated participation with the new company or startup.

Venture capital firms raise capital to create investment funds, used to invest in both early and mature stage startups depending on the specialization of the firm – although VCs do not necessarily always pay attention to the stage of the company at the time of closing the investment. For VCs it is very important to have good performance measures, especially financial, in order to see the level of development of the company.

WHAT IS CORPORATE
VENTURE CAPITAL?

HOW DOES IT WORK?

The structure and methodology of corporate venture capital sits at the center of a large ecosystem to which it brings much value. For example, a CVC serves different stakeholders in its industry, such as:

WHAT ARE THE OBJECTIVES?

The main objective of a corporate venture capital is to provide the parent company with new technologies and solutions that allow it to advance its strategy and position in the market.

Contrary to venture capitals, corporate venture capitals not only pay attention to the economic return. CVCs also prioritize certain information or strategic advantages that startups can provide them with, either within the market segment where they already operate or a new one.

As part of the CEMEX Ventures evaluation process, attention is paid to how each solution fits with the strategic priorities of the parent company. These include:

BENEFITS

Startups in search of support approach these two vehicles looking for benefits based on the stage they are in (i.e., early stage, commercialization stage, etc.). During the initial conversation, both parties must evaluate the service-offering and agree on how to make the collaboration tangible.

With the objective to collaborate with the most promising startups, the most common offer found among CVCs is:

ACCELERATION
  • Laboratory testing and pilot projects
  • Joint participation in consortium projects and calls for grants
  • Opportunity to develop solutions in the field with real customers
  • Commercial partnerships after solution validation
  • Development of business models to enhance the value of startups
  • Strengthening of startup presentations and showcasing of solutions to share with investors and customers
  • Potential investment

With the objective to collaborate with the most promising startups, the most common offer found among CVCs is:

CAPITAL INVESTMENT

  • A fair assessment of the startup's capital needs
  • Funding and smart money to promote the startup's continued growth and relationship with potential investors
  • Preparation for investment rounds and connection with potential investors
  • Follow-up on investments to continue developing solutions together

COMMERCIALIZATION AND EXPANSION
  • Option to test a startup’s solutions and buy its service
  • Pilot projects and implement solutions
  • Support in market expansion
  • Through the corporation’s network, connecting startups with new customers
ADVICE AND INDUSTRY EXPERTISE
  • Feedback to the startup in all stages of the development process
  • Technological knowledge and support with testing
  • In-depth industry knowledge
CAPITAL
INVESTMENT

Smart money to promote your continued growth and connect with potential investors.

COMMERCIALIZATION & EXPANSION

Access to construction leads and industry decision makers to pilot and test new markets.

ADVISORY & DEEP INDUSTRY EXPERTISE

Feedback and insights from our Expert Network, from industry experts to CEMEX Ventures Team.

LEVERAGE CEMEX GLOBAL NETWORK

Access our extensive network, R&D and marketing team, and spaces around the globe.

STARTUP
JOURNEY

1.

Afair evaluation and capital needs.

2.

Test your solution with real customers.

3.

Receive industry feedback and CEMEX experience.

4.

Prospect new markets.

5.

Invest in your startups.

6.

Launch joint media campaings for milestones.

7.

Pilot/implement your projet.

8.

Get feedback from industry Experts.

9.

Access to CEMEX R&D Team, spaces and suppot.

10.

Suppot to scale to new markets.

11.

Connect with potential new clients with CEMEX network.

12.

Connect with industry & Technology Experts.

13.

Prepare for investment rounds and connect with investors.

14.

Follow-on investment.

CORPORATE VENTURE CAPITAL FOR STARTUPS

Startups rely on this collaboration model in order to grow, strengthen their business models, or expand their solutions to other geographies.

Although it may seem like a new concept and frighten companies that have not yet approached innovation, the only thing that is new about corporate venture capital is the speed at which it has taken off in the last decade. More and more companies are setting up vehicles of this type and becoming more agile in testing new solutions and tapping into the entrepreneurial drive, innovation mindset, and fresh vision that startups bring.

Forbes states that startups looking to partner with corporate venture capital units should look for companies that allow them to test their solutions quickly and leverage their large customer base, where investors take on the role of the leader, forging initial introductions. For CVCs that are part of international institutions, these crucial connections are not only personal and customized, but also global.

VENTURE CAPITAL
IN CONSTRUCTION

The construction industry is no exception, despite being one of the sectors most lagging in technology adoption and innovation. Arguably, the industry is entering into a new revolution thanks to numerous agreements and alliances, collaboration between large companies, and the confidence to invest in new business models.

Just like previous industrial and technological revolutions, has the ConTech (Construction Technology) revolution begun? We say YES. Investment in this area has been booming in recent years and it is largely thanks to venture capital and corporate venture capital vehicles, the key emerging players in the sector.

Since the launch of CEMEX Ventures in 2017, CEMEX’s corporate venture capital and open innovation arm, we have focused on startups in the ConTech ecosystem that operate in one of our four focus areas. These areas narrow down the main challenges facing the industry, and are where we seek to bring innovative solutions, promoting a collaborative environment with key decision makers to drive the construction industry revolution together.

Since 2017, we have seen a significant increase in companies within the industry betting on startups and their new solutions. When we started on this path, the number of companies investing in construction startups was barely 10, and five years later, the investor ecosystem has grown to almost 50. In fact, in 2021 many companies had more than 20 projects in their investment portfolios, and in 2022 this number is expected to grow.

In 2021

63%
of investments in construction startups sought to optimize productivity in construction projects and on project sites

followed by solutions to improve the supply chain
and the technologies we believe to be the future of construction
(such as the use of robotics, modular construction, and advanced construction methods)

Investment in construction startups with a focus on sustainability remained in fourth place behind the other areas. So, could we be talking about a new marriage between CleanTech and ConTech?

Given the immediate need to reduce the industry’s effect on climate change, the Green Construction vertical is expected to see a strong growth in emerging solutions as well as new investments. Just as this vertical cuts across many industries, the ConTech sector is betting heavily to include it in its daily operations.

HOW DOES CEMEX VENTURES HELP STARTUPS GET AHEAD?

cemex_img_1

For CEMEX Ventures, driving the construction revolution is more than investing; we are committed to building a journey to success together with hundreds of startups.

cemex_img_2

CEMEX Ventures offers the startups it works with the opportunity to connect directly with a leading company in the building materials industry.

cemex_img_3

Additionally, startups may reap all the benefits of CEMEX's global network, multiple geographic locations, worldwide partners, and deep knowledge of the sector and the players operating within it. We help startups get one step closer to reaching their full potential.

cemex_img_4

By investing strategically in startups and tailoring our approach to meet their particular needs, we ensure that our offering is mutually beneficial and that we can help emerging businesses develop their solutions regardless of what stage they are at.

WHY DO
WE DO IT?

Our privileged position in the construction value chain allows us to connect startups and entrepreneurs with relevant players within the industry and thus, increase their potential for development and growth, regardless of the area in which they operate.
Contact us and let’s start our journey together! We look forward to learning more about you and how we can collaborate as a team.