There are many different ways technology companies can innovate: they can do it organically, partner, invest or acquire. Qualcomm does all the above and is one of the last remaining companies on the planet that invests in technology research. I am taking an increasingly deeper look at how technology companies are doing this.
Qualcomm is no stranger to acquisitions with companies like Atheros Communications, NUVIA and Veoneer's Arriver coming to mind in the last decade. A more popular way tech companies invest is to run a separate venture capital arm within a parent company to acquire an equity position. Qualcomm has had a strategic venture capital arm of its business called Qualcomm Ventures for over 20 years. With Qualcomm Ventures, the company has deployed capital in synergistic markets, added value, and got a return on investment, sometimes in the form of an exit or IPO.
Led by 15 year Qualcomm vet, Quinn Li, senior vice-president and global head of Qualcomm Ventures, the team has helped hundreds of companies succeed and scale throughout the last two decades. While the return on investment is a crucial metric for these businesses, strategic investments also help Qualcomm in popular markets like Automotive, 5G, AI, Enterprise, and Consumer.
Qualcomm has been very busy with Qualcomm Ventures, and the numbers do much of the talking. The company has 150 companies in its portfolio, with roughly 50 percent of those in the United States. It has over $2 billion in assets under management in the broad portfolio. Although we are a few months into the new year, 2021 was a record year for Qualcomm Ventures. Let's look back at some of the wins from last year and where the company is headed in 2022.
A look back at Qualcomm Ventures in 2021
Last year was the best year in the history of Qualcomm Ventures. Qualcomm uses its network with other key players to open doors for companies operating under its umbrella. It must be a win-win for both companies for these deals to work. The portfolio company gets a capital investment from Qualcomm Ventures and access to Qualcomm’s deep tech expertise and network of partners, while Qualcomm uses its network and strategic synergies to increase market penetration.
In 2021, Qualcomm Ventures added 25 new companies to its portfolio across various markets. Although Qualcomm Ventures invests in many new companies throughout the year, the other side of the equation is when these portfolio companies are acquired by other large companies or go public, much in part because of the value and capital Qualcomm invested into the company. In 2021, over 20 companies within the portfolio also had experienced successful exits. I will call out some of the more notable exits below.
2021 portfolio company exits:
- Matterport: a leading spatial data company
- SentinelOne: highest-valued cybersecurity IP
- Altiostar: A v-RAN leader acquired at $1+ billion valuation
- Innovium: A switch silicon provider acquired by Marvell for 1+ billion
- MapMyIndia: India’s leading provider of digital maps and location-based services
Qualcomm Ventures in 2022
I expect Qualcomm Ventures to keep up the pace of capital investment and portfolio company exits throughout 2022. I believe a big focus area for the company could be the connected intelligent edge. Qualcomm is intimately involved in mobile devices, primarily due to being one of the leading SOC providers, so 5G infrastructure makes much sense to look for in a portfolio company. Billions of intelligent devices will use 5G connectivity, so focusing on 5G in portfolio companies makes sense. AI is another area where I look for Qualcomm Ventures to invest capital this year. There is much application for AI in the realm of automotive and robotics. XR is another emerging area that Qualcomm is looking at going forward. The company founded the XR Ecosystem Investment Alliance in China this year, which indicates that the company believes XR matters.
I think above all, Qualcomm Ventures will continue to take a blended approach to distribute capital to companies in its core markets of IoT, 5G, Enterprise, AI, and plenty others.
After spending some time looking back at Qualcomm Ventures 2021 performance, it’s clear that the company was successful in its mission last year. It invested large amounts of capital and drove innovation in its core markets. While I believe that past success can be an indicator of future performance, there is still plenty of work ahead if Qualcomm Ventures wants to top last year's record performance. Adding 25 companies to its portfolio and having 20 successful exits is no small feat. I believe the company is focused on the right markets and use cases to continue deploying capital and seeing significant returns on these large growth markets like IoT, AI, and 5G.
Only time will tell if the company can continue its hot streak. If 2021 indicates what we could see in 2022, then the future could be very bright. Excellent work in 2021, Qualcomm Ventures.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.