SAP Ventures Reinvents Itself

Article by Lindsey Riddell, Reporter, San Francisco Business Times on June 28, 2013  – As many venture firms are figuring out how to bring more value to the companies that they fund to better compete for the hottest deals, SAP Ventures has a new strategy.

The firm has more than doubled the size of its fund-of-funds, thanks to an investment from its former corporate parent and sole limited partner, SAP, that brings the total of that fund to $405 million, a move calculated to get SAP Ventures exposure to younger companies. And the venture capital firm is hiring a 10-person business development team for the sole purpose of offering a high-value resource to its portfolio companies to help them recruit and expand overseas and to introduce them to strategic partners.

These are the next steps for SAP Ventures, a corporate venture capital firm that’s been working to restructure itself to retain the good stuff associated with the giant software company from which it licenses its name, while shedding the baggage that can put corporate firms at a disadvantage.

SAP Ventures’ portfolio shows that the firm is clearly doing a lot of things right. Its investment history includes LinkedIn, Red Hat and WebEx. Three of the firm’s recent portfolio companies have provided stellar exits in just the last four months. Those include ExactTarget, which recently sold to for $2.5 billion; Marin Software, which went public to the tune of $105 million in March; and Indian search engine Just Dial, which went public in June.

SAP Ventures CEO Nino Marakovic said public offerings aren’t necessarily exits for the company, and that’s one of the benefits of being connected to SAP.

“That’s an advantage of one (limited partner). There is not a rush to distribute shares,” said Marakovic. “SAP has plenty of cash and we’re perfectly happy to stay engaged longer” with a portfolio company that goes public, if the firm thinks shares in the company will continue to increase in value.

Right now it’s investing a $353 million growth fund in later-stage companies such as Box and Lithium.

SAP, the software company, just increased to $405 million its investment in SAP Ventures’ HANA fund, which — follow me here — invests in VCs who invest in startups developed on SAP’s HANA platform.

So why fix what ain’t broke? Marakovic said his firm, for the first time during its next fundraising expected to be four years from now, will be seeking limited partners that aren’t SAP. It needs potential limited partners to know who it is and what it does and how it’s different than all the other firms competing for their dollars.

“Most people … when they look at our portfolio, they’re surprised,” he said. “And I kind of don’t want it to be a surprise anymore.”

Score your ’hood
Appallicious, the maker of the Rec and Park app that is dragging San Francisco’s park reservation system into the 21st century, is at it again.

The San Francisco-based startup released June 23 a neighborhood scoring app, aptly titled Neighborhood Score, that ranks neighborhoods in San Francisco based on their health. The app ranks blocks according to an analysis of data on public safety, quality of schools, crime rates, air quality, walkability, access to public transportation and other factors.

The point is to inform real estate decisions, but also to give residents more ammunition in advocating for healthier communities and policies that protect the environment.

Mayor Ed Lee, an advocate of public access to government data that is making apps like these possible, debuted the app at the U.S. Conference of Mayors in Las Vegas.

API for parking data
Streetline Inc., which leads drivers to open parking spaces using sensors and real-time data, has released a free application programming interface that lets developers add parking data to websites, mobile apps and other digital platforms.

The idea, said CEO Zia Yusuf, is to “provide developers with a playground to experiment.”

Streetline, based in Foster City, is offering parking information — including garage locations, rates and hours — to developers for free.

Quote of the week
‘Investing in a startup is like a marriage, but it’s an odd marriage because you get married after two PowerPoint presentations and dinner.’

Reid Hoffman, Venture capitalist, Greylock Partners.

CRM for the small guys
Intercom uses one product to address customer relationship management, customer support and digital marketing: Its own.

“When you get to use your own product to sell your business, that’s true empathy for your customer base,” said Intercom founder Eoghan McCabe. “Empathy is the path toward building a thing people will value.”

Through its platform, users can track each interaction they’ve had with a customer or potential customer, from sales calls to clicks on email links to messages to the support desk.

“We’re trying to bring the human back to the web,” said McCabe.

Lindsay Riddell covers energy and cleantech for the San Francisco Business Times.