Intel Capital is a major venture capital firm that just happens to be related to the chip giant. As such, the moves it makes are important indications of what trends might be in the larger technology space. So tech entrepreneurs should pay attention when its VCs talk about what they see as the next big areas, as Intel Capital's president did in a recent interview with private company financial intelligence firm PrivCo.
3 Trends to Watch
When asked what the big thing a few years down the road would be, Arvind Sodhani said the following:
Big areas for growth in the future that we believe in, if I had to choose, I would say are in speech and voice recognition technology and optical eye tracking. More computing horse power today means better eye tracking and voice recognition as these technologies continue to evolve. These technologies will work for consumers in the future, enabling electronic devices to sync with email and calendars and help simplify people's lives, like booking dinner reservations and doctor appointments. For example, your phone will recognize that you have a doctor appointment in your calendar and call your doctor to either confirm or cancel the appointment. Or, your device will recognize that you have been searching for restaurants, and suggest one that fits your tastes and then even book the reservation for you.
You might wonder whether these are nothing more than areas that the Intel mothership has decided enter, but the history of Intel Capital suggests otherwise. The VC arm doesn't act strictly as an acquisitions feeder pool, according to Sodhani. Intel Corp has acquired less than 2 percent of the 1,265 investments that Intel Capital has made. And yet, Intel Capital averages about 28 to 30 investment exits a year. Between two-thirds and three-quarters are acquisitions, while the balance undertakes IPOs.
Not that additions for Intel are unimportant. Finding new technologies that can add to Intel products and contribute to understanding of technology trends is one of two overall goals of Intel Capital. The other goal, which can potentially help entrepreneurs understand the VC group, is that Intel Capital tries to build ecosystems within a given industry. "In a particular year, we might cluster together several VC investments in related companies, so that they can work together or learn from one another and grow within that ecosystem," Sodhani says.
If you have a technology company and want to approach Intel, it might make sense to do two things. One is to be able to articulate how your business fits into an emerging tech trend. The other is to look at other Intel Capital investments and see if there is a natural grouping you might fit into. The more you understand the needs of VCs, the better a chance you have of getting their attention.