Corporate Venturing in 2024: How Top Companies Thrive in Uncertain Markets

Tackling sustainability 

With the repercussions of climate change increasingly taking centre stage for governments, businesses and consumers worldwide, corporations are under more pressure than ever to create solutions and operate more sustainably. This can be a challenge within existing corporate business models, which tend to focus on core offerings and are often slow to change due to long chains of command and bureaucratic delays.   

This is where corporate venturing comes into play, enabling corporates to build, buy and partner with cutting-edge startups to boost innovation with unprecedented speed. By nurturing a culture of collaboration and investing in these fledgling ventures, companies are building greener portfolios and fast-tracking sustainable initiatives, products and services.

Example: AB InBev and EverGrain

In 2020, Anheuser-Busch InBev (AB InBev), the world's largest brewer, launched EverGrain, a sustainable ingredient company that transforms leftover barley from the brewing process into high-quality, nutritious ingredients. As explained by founder and former CEO Gregory Belt:

“We started our journey in 2013, long before upcycling was a trend, with the goal of unlocking every grain of potential in our barley to have a positive impact on people and planet.”

Here are just a few of the ways the move is helping AB InBev boost sustainability:

• Reducing waste: EverGrain upcycles spent barley, reducing waste in AB InBev's production.
• Smaller carbon footprint: The process significantly lowers the carbon emissions typically associated with agricultural waste, supporting AB InBev's broader sustainability goals.
• Boosting corporate responsibility: Evergrain enhances AB InBev's brand as a leader in sustainable innovation.
• Diversification: Evergrain taps into the growing demand for sustainable food products, potentially opening new markets for AB InBev.

The example highlights how companies can leverage corporate venturing to turn waste into valuable products, creating potential new revenue sources while boosting sustainability.

Overcoming uncertainty

Recent years have been marked by high levels of uncertainty, making it challenging for innovators and entrepreneurs to predict the next big market shift. Some of the factors fuelling this market unpredictability include:

• Disruptive technologies
• Shifting customer demand 
• New market entrants and cross-over players 
• Political or regulatory variations 

So, how can corporates overcome uncertainty? Well, to start, companies that position themselves to take advantage of new opportunities are often better equipped to navigate even the most unpredictable of market conditions—and corporate venturing is a great place to start. 

By strategically investing in, partnering with, and building new startups, companies can quickly gain access to new technologies, capabilities, and markets, making it easier to future-proof, adapt and compete. 

Example: Porsche and &Charge

The automotive industry is undergoing a rapid transformation with the rise of electric vehicles (EVs). Recognising the shift and anticipating the growing need for charging solutions, Porsche Digital (Porsche’s technology and digital unit) founded &Charge, Europe's first e-mobility loyalty program. Here's how this venture is helping Porsche beat market uncertainty:

• Diversifying revenue: &Charge introduces a new revenue model within the e-mobility space.
• Strategic data: The venture provides insights into charging patterns and behaviour, which can guide future products and market strategies.
• Adapting to the shift: Porsche is embracing the shift towards electric mobility and sustainability, expanding its brand presence in the eco-conscious consumer segment.
• Broader market reach: The venture appeals to younger, tech-savvy consumers, helping Porsche stay relevant in a changing market.

Through &Charge, Porsche is unlocking new opportunities in a fast-evolving market and potentially establishing itself as a major player instead of just reacting to the market shift.

Building resilience

Resilience refers to a company’s ability to withstand and recover from internal and external shocks. This includes economic downturns as well as operational challenges like supply chain disruptions, cyber threats, and other crises. Building resilience typically involves creating robust systems, ensuring financial stability, planning for continuity, and cultivating a corporate culture that can adapt to changes and recover from setbacks.

Corporations often possess inherent resilience due to their size, resources, and established market positions. However, in a rapidly changing world, the ability to adapt quickly and push the boundaries becomes a significant advantage. 

Example: PVH’s Stitch

Building resilience isn't just about anticipating potential disruptions but about optimising internal processes to be quicker, better and more efficient than the competition. That's what led PVH, the parent company of iconic brands like Tommy Hilfiger and Calvin Klein, to launch Stitch (formerly Hatch)—a cutting-edge digital showroom that ended up transforming the way sales are made to this day. The solution combines both hardware and software to help fashion brands streamline their operations and move effortlessly between their “in-showroom” and “remote selling” efforts. Here are just a few ways the move helped PVH ensure resilience in a rapidly evolving fashion landscape:

• Technological innovation: Integrating advanced digital tools through Stitch has streamlined PVH's sales processes, reducing time-to-market and improving responsiveness to market dynamics.
• Insight into market trends: Stitch provides PVH with deeper insights into buyer behaviours and market demands, facilitating more informed decision-making.
• Cross-brand synergies: Stitch's innovations could be applied across PVH's portfolio of brands, maximising impact and building company-wide resilience.
• Talent attraction: The venture positioned PVH as an innovator in the fashion industry, attracting top tech talent and fostering an entrepreneurial culture within the company.

Through Stitch, PVH demonstrated how a traditional fashion company can build innovative solutions that can transform entire industries. 

Final thoughts

Corporate venturing is no longer a buzzword; it’s become a proven strategy embraced by top companies worldwide. With a growing number of corporates and startups partnering to tackle shared goals and targets, the possibilities for positive change are virtually endless. 

There’s no better time than the present to make your business more sustainable, adaptable and resilient, so don’t wait too long before starting your own journey.For more inspiring corporate venture examples, be sure to check out our new report: 20 Corporate Spin-Off Examples.

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Are you a corporate innovator looking to fuel innovation through corporate venturing? We can help you create a detailed strategy that leverages your unique corporate assets to create a pipeline of profitable new ventures.