reduce the number of companies in Intel Capital’s portfolio—a shift that precipitated a slew of reports in March that Intel Capital was exploring the idea of selling a big part of its portfolio investments. By May, Brooks said Intel Capital had decided not to sell part of its portfolio—a position he restated yesterday.
“There is not going to be a sale,” Brooks said during his keynote.
Rather, he wants to make bigger investments in fewer companies—and to gradually reduce the 400-plus portfolio companies he inherited to what he regards as a more manageable number, probably somewhere between 250 and 300 companies.
Under Brooks, Intel Capital has continued to invest consistently across the gamut of early through late-stage technology startups. Intel Capital’s average investment this year is probably about $10 million, Brooks said, but he noted that Intel Capital invested $80 million of the $120 million that went into last month’s Series B funding at Thalmic Labs, a wearable technology startup based in Waterloo, Ontario (Canada). Thalmic has developed an armband that uses the electrical activity of your muscles to control computers and other electronics with particular gestures.
He sees Intel Capital acting more frequently as a lead investor in syndicated deals, and said he also wants Intel Capital to play a more active leadership role on the boards of its portfolio companies. He also highlighted Intel Capital’s Diversity Fund, which has a charter to invest $125 million over five years in startups led by women and under-represented minorities. “We’re going to encourage talent diversity across all of our portfolio companies,” Brooks said.
Brooks noted that Intel also invests between $10 billion and $12 billion a year on its own technology research and development, with another $5 billion allocated to acquire technology companies like San Diego’s Nervana Systems.
Much of those expenditures are focused on projections that the ecosystem of smart and connected devices—i.e., the Internet of Things—will grow from about 5 billion devices today to more than 50 billion devices by 2020. To make that possible, Brooks laid out four investment themes that show where Intel Capital is headed:
—Better networking through the implementation of 5G networking technologies.
—More cloud computing capabilities, including technologies that accelerate data processing, storage, and retrieval, and new algorithms for deep learning, machine learning, and improved big data capabilities.
—New systems with an emphasis on consumer friendly interfaces.
—Autonomous devices, with more vision, data storage, and processing capabilities in each device.
While he maintained his investment banking demeanor most of the time, Brooks also demonstrated a sense of humor by playing a video that mocked a dubious investment strategy. He also showed his colors as a University of Michigan engineering grad—shouting “Go Blue” when UM research fellow Zhiyoong Foo took the stage at a press briefing to describe the microelectronic sensor technology under development at CubeWorks, a new Intel Capital portfolio company based in Ann Arbor, MI.
