World’s top 100 corporations are in on startup revolution: 500 Startups-INSEAD study
by Liz Lee for DealstreetAsia.com,
A notable 68 per cent of the top 100 companies named in the Forbes Global 500 list are engaging with startups, evident that large corporations are paying attention to the smaller, more innovative companies.
In a report about the depth and breadth of corporate startup engagement, Silicon Valley-based global venture capital seed fund and startup accelerator 500 Startups and leading graduate business school INSEAD have found that 262 companies, or 52.4 per cent, out of the 500 world’s biggest public companies are working with startups in one way or another.
While there lingers a perception that larger corporations are slow to adapt to the tides created by startups, the biggest public corporations are actually not as clueless, noted the authors of the report, 500 Startups director of corporate innovation, Arnaud Bonzom and INSEAD Timken Chaired professor of global technology and innovation, Serguei Netessine.
The research was done based on the 500 world’s biggest public companies according to the Forbes Global 2000 ranking.
For this report, the research focused on seven different channels to engage startups: technical support, business support, startup programs, co-working space, accelerators and incubators, startup competitions, and corporate venture capital.
“On average, each corporate working with startups is engaging them through 1.6 different channels. The most common is through corporate venture capital in 62.6 per cent of cases, following by startup competition (29 per cent) and setting up accelerators and incubators (24.4 per cent),” the report noted.
Corporate venture capital, as the main channel by which corporations engage with startups, is used by up to 73.5 per cent for the 68 companies in the top 100 that conduct at least one activity with startups.
The research noted that the top 100 companies are working with startup two times more intensely than the last 100 companies of the Forbes Global 500.
500 Startups and INSEAD also found a strong co-relation between the rank of the corporation and the engagement with startups.
“Indeed, the first 100 companies are working with startups twice as intensely (68 per cent versus 32 per cent) as the last 100 companies of the Forbes Global 500. There’s a gradual decline as ranking decrease,” it pointed out.
Looking at industries, the research narrowed down to industries where at least 10 companies are engaging with startups.
Some industries are more focused on one channel, such as the corporate venture arm for the pharmaceuticals industry, whereas the telecommunication services industry has been using a wide range of channels to engage with startups, the report said.
The top 5 industries engaging startups are pharma 94.1 per cent), telecom services (85.2 per cent), regional banks (68.8 per cent), major banks (64.5 per cent) and diversified insurance (58.8%).
Another three interesting industries to note were semiconductors and computer services in which all participated in startup engagement, while beverages scored 87.5 per cent engagement.
The research also found that the majority (at 61.7 per cent) of the startup unicorns mentioned by The Wall Street journal under The Billion Dollar Startups Club, have raised from at least one corporate, not including investment firms and banks.
The article first appeared in LtP