Coca-Cola knows its fizz. So you might not expect the soft drink giant to jump into the venture capital game just as it's going flat.
But that's just what Coca-Cola is doing. As overall venture capital investments in IT were tanking, the Atlanta company three months ago launched a division charged with finding, cultivating and investing in embryonic technology startups. Have Coca-Cola officials been drinking something stronger than soda pop?
Nope, said Chris Lowe, president of Coca-Cola's venture unit, Fizzion LLC. In fact, Lowe said, this is the right time for the company to get an early peek at the technologies on which its e-business strategy will depend tomorrow. "I'm very optimistic on technol ogy, and I think that we're in the second wave of the technology upswing," Lowe said. "More and more of the investment [for] technology will come from what you used to call the Old Economy [companies]. We're sort of cutting the path for how this is going to unfold."
Coca-Cola is a latecomer to a trend that peaked last year: major corporations making billions of dollars in venture capital or incubation investments in IT startups. And, not surprisingly, with the sudden demise of the dot-com and IPO (initial public offering) markets, many corporations that came early to the venture capital trend have joined professional venture capitalists in closing their wallets to new investments.
But not all corporations. Enterprises such as Coca-Cola, Dow Chemical, Boeing, J.P. Morgan Chase and Chevron are continuing or even increasing venture investments in technology startups. Unlike enterprises that launched venture capital units a year or two ago, however, these companies aren't in it just for a quick killing. Instead, their venture capital investments are intended to help them quickly spot and understand technologies that will be key to keeping their e-business strategies a step ahead of those of their competitors.
Therefore, these e-business leaders are making sure their venture capital units remain tightly aligned with the needs of the business so that they are able to strike the right balance between financial returns and strategic goals.
