The number of companies investing corporate venture capital (CVC) in start-ups or accelerator projects has soared in the past five years and so has the amount of capital being invested in such projects. The total amount of venture capital investments has grown from $76 billion in 2010 to $142 billion in 2015, according to research by the Boston Consulting Group.

Access to new technologies and markets

The study shows how corporate venture capital investing has become an increasingly important method in which companies acquire or access innovative technologies and new markets. The percentage of companies that are using CVC to take a minority equity stake in a start-up as an investment or as a way of gaining an early understanding of new markets or technologies increased from 27 per cent in 2010 to 40 per cent in 2015. Investing in accelerators or incubators is a similar way of accessing new areas of technological expertise and the percentage of companies doing so rose during the same period from 2 per cent to 44 per cent.

From 2010 to 2015, the overall amount of venture capital investments nearly doubled, but the amount of CVC investments increased from 7 per cent to 9 per cent, as a share of overall venture-capital investments.

Biggest companies are earliest adopters of CVC

The research identified three different types of corporate investment, most popular among the biggest 30 companies in each of the seven industries focused on in the report (automotive, chemical, consumer goods, financial services, media and publishing, technology, and telecommunications). These three types of investment are CVC, accelerators and incubators, and innovation labs. According to the report, these 'tools' don't supplant internal R&D but complement and encourage it. The 10 biggest companies – out of a sample of 83 – were the earliest adopters of the three venture investment tools, with 57 per cent making CVC investments; 66 per cent using incubators and accelerators, and 41 per cent operating innovation labs.

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CTMfile take: Driven by the need to innovate and adopt new technologies, large corporates are looking for ways to invest and develop. CVC, accelerator or incubator projects as well as innovation labs are all ways to grow skills and expertise without disrupting the current business model until products or services have been tried and tested.