Intel Capital Is Betting Millions On Four Categories: Should You Be Copying Them?

Just like great artists, great investors steal great ideas from those with demonstrated expertise. No corporate venture capitalist (CVC) has demonstrated as much expertise and excellence over the decades as Intel Capital. So when the firm unveils new bets at its Global Summit each fall, you can bet that everyone with fresh capital and a need for ideas is watching closely.

Held in October in San Diego, Calif., the 17th summit drew huge sponsors (e.g., Accenture, NASAQ and the Canadian government), big-name speakers (e.g., Marc Benioff, CEO of Salesforce.com; Lowell McAdam, CEO of Verizon; and former U.S. Senator Bill Bradley), and over nearly 1,000 attendees from around the globe. Discussion centered on how technology can improve lives and impact how we interact with the world around us.

“Innovation is exploding as the world transforms into an increasingly smart and connected place, where billions of devices will be made even smarter by intelligence in the cloud," said Wendell Brooks, Intel senior vice president and president of Intel Capital, announcing 12 additions to its portfolio. These 12 companies, profiled below, received a combined total of $38 million in fresh venture financing from Intel. Below, we also review CVCs and private VCs making investments in these same markets.

Four Categories, Varied Needs

The 12 portfolio investments that Intel Capital announced fall into four distinct categories. What they share is technology that benefits in some way from networked intelligence, putting digital smarts to use in new and creative ways.

Autonomous Machines

Adding smarts to devices using increasingly sophisticated software and microprocessors is nothing new, but the volume of R&D going into automating our lives is unprecedented. At Rocketspace, we've tracked over 22,000 self-driving patents granted in the last five years alone. And at least 10 percent of the world's mobile connections will be machine-to-machine (M2M) by 2020, creating infrastructure needed to automate almost any basic human task—from driving to cleaning, cooking, scheduling, screening messages, and more.

1. Chronocam, based in Paris, was founded by four of the world's pioneers in the field of "neuromorphic vision," in which sensors are made to act and react like the human eye in processing images accurately. As Intel sees it, this sort of machine vision has "a variety of applications in autonomous navigation and connected objects." Other CVCs would appear to agree: French automaker Renault participated in the same $15 million B round as Intel.

2. Embodied was founded in January by the former CTO of iRobot and a famous robotics researcher. Intel is betting on the startup's ideas for creating intelligent robots capable of handling care and wellness for individuals and families. Think of them as personal coaches and assistants who, as the company says, "empower people to be better at helping themselves." So far, Intel is the only investor to contribute to Embodied's seed round of funding.

3. Perrone Robotics, founded in 2003, has years of successful testing and development of what it calls a "full-stack" platform for autonomous vehicles. Intel is first to take a piece of the company, but the deal goes further than an equity investment. Perrone and Intel have also agreed to collaborate on ways to improve autonomous driving, working specifically with Intel subsidiary Wind River Systems to improve the intelligence of embedded systems in modern vehicles.

Data and Connectivity

More information than ever is available to us as business owners and consumers. How to process and make sense of all this information is a challenge that dozens of startups hope to help solve, including the ones listed below.

4. Eazytec is a smart city developer whose technology for connected services is encoded in unique firmware—that is, software that runs directly on and enhances the processing ability of embedded systems. While no other investor has committed capital to Eazytec (at least not as of this writing), Eazytec's location in Yixing City, which doubles as China's science and technology business incubator, suggests that it may not be long before the company secures another round of venture financing.

5. Grand Chip Microelectronics, also known as Kangxi Communication Technologies, is a Shanghai-based startup that primarily develops wireless technology for connecting the Internet of Things (IoT) and wireless network infrastructure. The theory here is simple: the faster and better the connections are between devices and other infrastructure components, the more we can know about the networked world around us. As with many of the recent investments, Intel is the only documented outside investor in Grand Chip Microelectronics.

6. Paxata, founded in 2012, has developed what it calls the world's first "Adaptive Data Preparation" platform for transforming raw data into insights. The system eliminates "code or sampling" due to a combination of technologies that process and make meaning from everyday language when performing analysis. Intel isn't the only investor who likes the story— 12 investors have committed a reported total of $59.5 million to Paxata, including Cisco, Deutsche Telekom, and Microsoft.

7. StealthMine, based near Intel in Sunnyvale, Calif., purports to make it possible for big enterprise software applications to accept and use fully encrypted data for performing jobs. That way, nothing is ever exposed, which reduces the risk that a network breach—an increasingly common phenomenon, unfortunately—won't cause harm. So far, Intel is the lone investor to publicly acknowledge backing StealthMine.

Sports and Health

As the quantified self movement stretches beyond millennials to involve consumers of every age, entrepreneurs are fashioning computing devices that can be made to fit everywhere and measure everything.

8. CubeWorks, an Ann Arbor, MI startup that was founded in 2013, is making its name with a millimeter-sized computing platform it calls Cubisens. Each miniaturized device is capable of autonomously measuring and capturing metrics about its environment, and then either broadcasting them wirelessly for processing by a server or storing them locally for later retrieval. Either way, Intel is an early believer in the potential of Cubisens for measuring human performance—and is first to invest as a result.

9. Kinduct, a Canadian software company founded in 2009, has been working on tracking human performance for about as long as the quantified self market has been around. Intel explains its investment by pointing to Kinduct's massive client list, which includes "teams in all five major sports leagues in North America." Using the cloud to pull insights from a variety of data sources makes Kinduct's approach unique, Intel says. Others would seem to agree; the company has raised $9.02 million in funding from four different investors, including the corporate VC arm of R/GA, a well-known design agency.

10. K4Connect, founded just over three years ago, has a built a system for tracking the key metrics that help older adults and those living with disabilities to enjoy more fruitful, fulfilling lives. Intel cites one of the company's newest products, K4Community for senior living centers, as a key reason for its investment. The idea is to create "smarter and healthier living environments" that provide analytics and insights to help provide better care. Lowe's joined Intel in providing corporate venture capital to K4Connect, which has raised $9.9 million in venture financing over two rounds of funding.

Virtual Reality

While the technology itself is still in the early stages of development, the long-term promise of virtual reality (VR) for entertainment, prototyping and design is undeniable. Consulting firm Deloitte marked 2016 as the first year in which VR would bring in $1 billion in total revenue.

11. Dysonics has developed a unique technology that embeds in headphones to deliver the feel of 360-degree sound. Additional software and hardware for bringing this same feel to different applications, including virtual reality, is in development. Intel is investing to help bring it all to life, building on an earlier venture round that brought in $421,060 in funding.

12. InContext Solutions, founded in 2009, offers a ShopperMX platform that simulates the shopping experience for web visitors. Intel cites the company's ability to test new concepts before expending capital to bring them to life in new stores as key. Avoiding profit-stealing mistakes could make ShopperMX a go-to for retailers and makers of consumer packaged goods. Pfizer, Nestle and ConAgra Foods are already clients. Other corporate investors include AMD, which participated in three earlier rounds of funding.

Who to Watch Next

Intel is hardly alone when it comes to making deals in these markets, but if your aim is to follow others making similar bets, your ideal approach may be to focus more on deal flow and volume than on industry expertise. After all, Intel is active in these areas in part because it's active in everything.

According to data compiled by CB Insights, Intel Capital was last year's most active CVC in terms of overall deal flow. Each of the following three CVCs routinely ranks in the top five of most active investors, though Qualcomm fell back a bit in the first half of 2016 and ranks seventh as of this writing. Nonetheless, Qualcomm remains on our list of firms to watch because of its interest and expertise in wireless technologies.

• GV, formerly known as Google Ventures, has put hundreds of millions into 310 companies, according to data provided by Crunchbase. Recent bets include series B round investments in Amino Apps, which provides mobile apps that organize communities of interest, Clear Labs, which specializes in a category it calls "food analytics," and Lemonade, which uses a form of artificial intelligence (A.I.) to help set rates for homeowners and renters insurance.
• Qualcomm Ventures, founded in 2000, tends to take small positions in its portfolio companies—generally between 5 and fifteen percent of available equity— and focuses on startups that have wireless technologies that are complementary to Qualcomm's own product line. Overall, the firm has invested in 179 startups since inception, according to data provided by Crunchbase. Recent bets include series A investments in SEWORKS, which provides security to mobile devices, and AttackIQ, which uses automated validation techniques to improve cybersecurity. Qualcomm also recently participated in a series C round for M87, building on earlier bets made in the company's A and B fundraising rounds. No one should be surprised by that: M87 says its working on engineering ways to increase the coverage and capacity of mobile networks, which are Qualcomm's bread and butter.
• Salesforce Ventures is a more recent addition to the corporate venturing world. Salesforce started investing its capital in related startups in 2009 and has funded 171 companies since, according to data provided by Crunchbase. You'd think most of those investments would be in the same sorts of cloud technologies that power Salesforce's platform, yet that isn't always the case. For example, the firm recently participated in a massive $160.14 million series E round of funding for SIGFOX, which has built a low-power cellular network for connecting devices that comprise the IoT.

Coincidence? Unlikely. Great investors work together often; Intel calls these partners "fellow travelers." Watch them all if you want to see where the smartest money in corporate venture capital is headed next—after the big bets on autonomous machines, data and connectivity, sports and health, and virtual reality have run their course.