In 2010, corporate investors contributed just 10% of the funding raised by European startups, far from being a significant source of capital. Today, the landscape has changed remarkably. As of 2024, CVC funds account for over 25% of the total capital invested in startups and have participated in one in four startup deals across Europe, according to Dealroom. This trend shows no sign of slowing down — 89% of corporate investors plan to increase or maintain their startup investment over the next three years.
Vestbee talked to Philippine Horak, Principal at Orange Ventures, and Maximilian Schausberger, Managing Director at Elevator Ventures, who shared their perspective on the trends and challenges shaping CVC funds in the current startup ecosystem.
Bridging the gap in the market: how CVCs make investments
Unlike the "first wave" of CVCs in the early 2000s, which were often extensions of corporate M&A departments focused solely on acquiring startups to complement core operations, today's CVCs are more closely aligned with traditional venture capital in structure and function. They now view startups as key partners for maintaining competitiveness in fast-changing markets. This shift is reflected in the numbers: in 2024, corporate investors contributed over 25% of all startup funding, up from 15.3% in 2014 and 22.7% in 2023.
Corporate firms have many reasons to dip their toes into startup investments, including gaining a competitive edge by incorporating more agile and innovative solutions into their core business. They can benefit from these partnerships to break free from outdated practices and bring a more dynamic Silicon Valley-like culture into their organizations.
Most CVC investments focus on startups with technologies that complement the corporation’s core operations, helping them stay ahead of the curve. These benefits are particularly evident when investing in startups beyond the early stages, which often struggle to secure funding from other sources — especially in the CEE region.
“There is a significant investment gap in growth financing across the DACH and CEE regions,” said Maximilian Schausberger, Managing Director at Elevator Ventures, a corporate venture capital entity of Raiffeisen Bank International (RBI). The firm aims to fill this funding gap that holds back regional growth. He underlined that Series A funding in the CEE region is lagging behind other parts of Europe and North America — every $1 million in seed funding in CEE attracts significantly less follow-on capital than in Western Europe.
With over €50 million invested in 16 companies and two funds, Elevator Ventures is working to close this gap. The fund explicitly targets Series A and B stage companies, deploying up to €3 million per investment in startups reshaping the landscape of fintech, banking, cybersecurity, regulatory tech, or wealth management.
“Before investing, we assess how we can elevate the growth of each portfolio company using our network and access to experts. Our goal is to build long-term value with founders. Therefore, we prefer equity as a core financing method with convertibles as a helpful tool in certain situations,” Maximilian explained.
Another fund we talked to is Orange Ventures, a venture capital fund of the global telecommunications operator and digital service provider Orange Group. As the firm's Principal Philippine Horak said, its approach balances its corporate roots with an entrepreneurial outlook. Orange Ventures invests like any other VC, stating that synergies with Orange core technologies are an additional bonus. With 18 investments since 2021, including companies like Dataiku and Brut, the fund focuses on impact-driven early-stage startups and growth-stage players, with investment tickets ranging from €750,000 to €20 million.
The CVC growth in the last few years isn’t just a passing trend. According to recent data, 89% of corporate investors plan to increase or maintain their startup investments over the next three years. The message is clear: startups are no longer just an experiment for corporations — they’re a strategic necessity.
Integration with corporate strategy
The unique position of CVCs within the broader VC sector stems from their dual mandate: they seek financial returns and aim to enhance the strategic interests of their parent companies. This alignment allows CVCs to leverage corporate resources, networks, and expertise, providing portfolio companies a competitive edge that traditional VCs may not offer.
On the other hand, startups securing investment from a large corporation instantly boost their market credibility, attracting new business opportunities and further investments by validating their value proposition. Unlike traditional VCs, CVCs often take a more patient and strategic approach, prioritizing mutual benefit over short-term growth. This allows startups to focus on building sustainable businesses rather than chasing rapid, unsustainable expansion
Elevator Ventures leverages its close ties to its LPs, including Raiffeisen Bank International, to provide startups access to networks, industry experts, and tailored growth strategies. Specific examples of these synergies include Autenti’s eSignature technology, which has been seamlessly integrated into Raiffeisen’s e-signature platform, delivering an efficient and secure digital signing experience. Similarly, SESAMm’s AI-powered ESG controversy detection tool has been embedded into RBI’s advanced risk analytics framework.
Orange Ventures also takes an active role, with operating partners that work hands-on with startups to forge partnerships with Orange’s extensive business network and unlock synergies.
Challenges of CVCs
One of the most commonly reported challenges within the CVC sphere is balancing the drive for innovation with imposing restrictions resulting from corporate regulations. Tightening economic conditions have exacerbated this, as corporate boards demand longer decision-making processes, heightened scrutiny, and more tangible outcomes for each investment. Additionally, competition for high-quality startups has intensified, necessitating that CVCs differentiate themselves through value-added services and strategic partnerships.
Incorporating the startup into the existing culture of the CVC parent company can also be challenging. However, companies like General Motors and Lyft have successfully navigated this integration process. Thus, in 2015, GM invested $500 million in Lyft, a popular ride-sharing service. This partnership allowed GM to tap into Lyft's innovative technology and expertise in mobility. Together, they are working on creating an "on-demand network of autonomous vehicles, blending GM's automotive experience with Lyft's cutting-edge software."
On the other hand, for startups, one of the major concerns is the potential loss of control, as giving away too much equity, agreeing to consent rights, or relinquishing significant intellectual property can reduce the startup's influence over its direction. For CVCs, cultural integration can also pose a challenge, as startups often operate with agility and informality that contrasts with corporate environments.
However, EV offers an optimistic perspective on navigating these hurdles. "I do not think that scaling CVC operations is more or less difficult than for other VCs," Maximilian Schausberger asserted. He emphasizes the importance of precise positioning, value propositions, and delivering results to all stakeholders, including portfolio companies, LPs, and co-investors.
The road ahead
Europe is at a pivotal moment. With innovation hubs expanding across the continent, CVCs should step up as investors and builders of ecosystems, as Vestbee was told. For Elevator Ventures, this means fostering a culture of collaboration within the DACH and CEE regions, while Orange Ventures envisions more spin-offs and external partnerships reshaping how CVCs operate.
