US-based IBM seeks technology start-ups in SA to add to its global network channel.
The company's venture capital unit already has 700 local organisations in its channel, 40% of which were added in the past two years.
Deborah Magid, director of software strategy at IBM's Venture Capital Group, was in SA last week to address venture capital companies to find new partners to add to its “ecosystem”.
Since launch 10 years ago, the unit has added thousands of business partners globally to IBM's portfolios, and it has acquired 25 companies. IBM does not provide funding, but engages with established venture capital firms to find new, complementary, and relevant technologies.
Part of its initiative to expand into emerging markets includes its Innovation Centres, says Magid. These are resource centres located around the world, with a focus on developing economies, where innovators can meet up with IBM staff, and get assistance if required.
In SA, there are two centres, with the Cape Town unit having opened last September, and the Johannesburg-based centre in 2008. “We intend to build others in Africa,” says Magid. IBM has 45 of these centres around the world.
Missing out
The company's venture capital initiative was launched 10 years ago, just before the dot-com bubble burst. Magid explains that IBM felt it was invisible to start-up technology companies in Silicon Valley, and could not form relationships with these firms.
As a result, she says, the organisation was losing out on having access to innovative technologies. During the crash, Magid says, it became even more important to invest in small companies that had new technology because they may have failed otherwise. “We wanted to find innovation.”
Magid explains that the unit liaises directly with venture capitalists to discuss technology companies in their portfolios. By partnering with these firms, IBM can aid them to grow in the marketplace, she says. “We get a whole pipeline of partners, and learn about new products.”
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