One of the most interesting acquisition trends of 2016 has been the increased involvement of non-tech companies in the technology market. This year, unlike in previous years, many of the billion dollar exits were done by non-traditional buyers.
GM acquired Cruise, Unilever acquired Dollar Shave Club, and Walmart acquired Jet.com. Could this be an indication of new era, in which the tech ecosystem and the traditional fortune 500 companies are converging?
Actually, this probably isn’t an entirely new phenomenon, as non-tech companies have been active in Silicon Valley for quite some time. Many retailers, auto companies, and consumer goods companies have opened offices in major tech centers, looking to be involved in innovation that might potentially help them get an edge over their competitors.
Since Israel is known globally as a strong innovation hub, lately we have seen many of these players arriving here, looking for innovation. Clearly, this is a positive trend, because it presents opportunities for our startup companies to benefit from strategic investments, business partnerships, and potential acquisitions. In fact, for Carmel this isn’t new either. One of our portfolio companies was sold for a modest amount to Sears back in 2009 (Sears acquires Delver).
September was a big month here in Israel, and many overseas visitors flocked to our shores for EY’s Journey conference, DLD, and other tech events. One of those visitors was Chaz Giles from Estée Lauder. Chaz is the global head of external innovation at Estée Lauder, operating out of San Francisco. He provides a great example of how non-tech companies are trying to benefit from global innovation hubs.
As part of our video interview series, I sat down with Chaz to discuss innovation, non-tech acquisitions and other relevant issues.
Some of the topics covered in this video:
Estée Lauder interest in Israel’s tech scene
What types of innovation are likely to develop in the beauty industry and at Estée Lauder specifically
Carmel Ventures’ interest in the intersection between the virtual and physical worlds
The trend of non-tech companies responsible for many of the big acquisitions in the venture world this year
The likelihood of Estée Lauder buying tech companies