SAP ramps up venture capital efforts

SAP's venture arm has seen 12 portfolio company exits this year

SAP's venture capital arm has raised US$1 billion over the past year as the company tries to land stakes in hot startup companies, both to generate profit down the road and to align itself with the industry's newest technologies.

In total, SAP now has $1.4 billion under management in its various venture funds, according to Wednesday's announcement. As part of SAP Ventures' expansion, the organization is also creating a new 10-member business development team, SAP said.

SAP is expecting to have a total of 13 exits for its portfolio companies this year, said Nino Marakovic, CEO of SAP Ventures, in an interview. Five of the companies, including Marin Software and Violin Memory, have gone public, with another seven acquired by other vendors. One of the most significant in the latter group is marketing software ExactTarget, which SAP rival Salesforce.com bought for $2.5 billion.

There's a reason for SAP's installed base, as opposed to SAP shareholders, to care about what the Ventures group is doing, Marakovic said.

"We're kind of a good pipeline into the things that are to come," he said. "We want to show customers SAP is forward-thinking."

In addition, SAP's involvement could give customers more confidence in working with the very smallest startups in the portfolio, which may have only a handful of initial customers, he said.

SAP has made efforts, including a special venture fund, to get startups interested in its HANA in-memory database platform, in hopes of quickly developing an ecosystem of partners and applications for HANA.

Overall, SAP looks to invest in mostly enterprise-themed startups, but about 20 percent of its portfolio concerns more consumer-oriented companies, he said. It is particularly interested in companies that span both markets and reflect the consumerization-of-IT trend, according to Marakovic.

It's not unusual for tech companies to have venture capital arms. Intel runs one of the better-known ones, as does IBM.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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