Using Global Markets To Your Advantage

Dating Group CIO Bill Alena is a RevOps and CVC executive with more than 20 years of experience in digital media and online dating.

For corporations to survive in today’s ever-changing business environment, they must innovate. This is true whether your organization is a scrappy startup or a global corporation. But for larger corporations, maintaining a culture of innovation can be difficult. Startups have it in their DNA, but as corporations grow, they often become bogged down in processes, bureaucracies and false security.

That’s a big reason why many of the Fortune 500 companies that were around 50 years ago no longer exist. They weren’t willing to adapt to changing market conditions. The movie rental company Blockbuster is perhaps the reigning poster child for what happens when corporations become sedentary. In 2008, Blockbuster CEO Jim Keyes famously said, “Neither Redbox nor Netflix are even on the radar screen in terms of competition.”

Obviously, that quote didn’t age very well.

Strategies For Growth

However, not all corporations make it a habit of sitting on their laurels. General Electric (GE) is a great example. The company has stood the test of time and has grown to be one of the most diverse companies in the world. Historically speaking, larger corporations such as GE have tackled innovation initiatives through R&D—General Electric Research Laboratory was the first industrial research facility in the United States.

The other way hungry corporations grow is by relying on teams of M&A professionals to go hunting in the wild for good prospects to acquire. The theory is that it’s less risky to buy a successful product than it is to build it from the ground up. However, in-house R&D and M&A both have their positives and negatives. That’s why a third vehicle known as corporate venture capital has started to reemerge.

Although CVC has its roots with Pierre S. du Pont’s investment in General Motors, it’s still a relatively young specialty. But it’s growing rapidly. Ten years ago, AdvisoryCloud estimated there were more than 10,000 chief investment officers (CIOs) and C-level investment executives in the U.S. alone. According to a Zippia analysis, that estimate is now over 17,000 investment officers.

CVC Activity On The Rise

Corporate venture funds come in different shapes and sizes. But traditionally, they are affiliated with large companies interested in having a hand in the innovation taking place within targeted industries. And CVCs represent a fast-growing segment of the funding market.

According to CB Insights, CVC activity hit record highs in 2021, with investments reaching $169.3 billion. CB Insights also reported that 221 new CVCs were created over the year, with funding activity increasing 142% year over year from the previous year.

For context, Dating Group is quite active in the CVC space. We are advancing with a multitiered approach, with a traditional venture fund to invest in startups at all stages and a recently launched accelerator. The accelerator is designed solely for early-stage startups with which we can offer myriad expert support tools that go far beyond the monetary.

Keeping An Eye On Global Markets

With so many CVCs now competing for strategic investments, along with VCs, private equity, investment banks and more, it can be hard for CIOs to find the right companies to invest in—with the right terms. But following a sound strategy can make all the difference. One that has worked wonders for many comes from the Oracle of Omaha himself, Warren Buffett. As Buffett famously said: “Be fearful when others are greedy. Be greedy when others are fearful.”

This applies to CVCs as much as it does retail stock investors because investing in quality companies in times of market corrections is always a great strategy. In select European countries, there is going to be a lot of investment opportunity soon—especially within the technology sector. Following is a short analysis of my thinking in this regard.

A Focus On Europe

Some of the brightest and most promising technologists in the U.S. are originally from Eastern European countries such as Belarus and Russia. Although founders from the region often head U.S.-based corporations, many have maintained engineering and R&D operations overseas. But on February 24, 2022, the invasion of Ukraine changed it all.

Markets have crashed and thousands of talented tech workers have been displaced. Now those highly skilled professionals are calling Cyprus, Malta, Poland and other countries home. And there is little doubt in my mind that many will be charting new paths with ideas and innovations that could be worth billions. As such, regions not traditionally known for technology could soon become hotbeds for innovation.

An AI Boom From Small Countries

At this very moment, motivated and skilled professionals working in the field of artificial intelligence (AI) are busy building new networks, incubators, labs and consortiums in countries such as Cyprus and Armenia. Some are even building them without a central location. Their focus is on developing new projects and ventures that bring the field of AI forward. According to Statista, the global AI software market is forecast to grow rapidly in the coming years, reaching around $126 billion by 2025.

AI will be a driving force within the global economy for years to come. Everything from healthcare and retail to concepts like Web3 and the metaverse will rely on AI applications. All of these are huge markets within themselves. For example, Statista anticipates the metaverse alone will surge to $678.8 billion by 2030.

Final Thoughts

Specifically, the dating world is uniquely situated to expand into AI and the metaverse. I’m personally seeing a large influx of early-stage startups attacking this space, with much of the development work coming out of Eastern Europe. At my company, we’re aggressively pursuing investments in apps that we can potentially acquire and technology platforms that can be added to our O&O properties.

With all that said, a smart strategy for CIOs looking to follow Buffett’s advice is to capitalize on this trend. Go out and get involved in the areas where the Eastern European tech exodus is taking talent and entrepreneurs. It is there that you may discover the next big thing.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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