Need money? Call Intel! Intel Capital, the chip manufacturer's investing arm, was the most active investor in IT companies in the US in 2002, according to VentureWire.
Intel invested over US $200 million in more than 100 companies worldwide. "This year it will be even more," Claude Leglise, vice president of Intel Capital, told reporters at the Intel Developer Forum in San Jose last week.
Intel Capital invests in several market segments, such as networking and wireless technologies, nanotechnology and biomaterials that could be used for digital storage.
"We're basically interested in technologies that complement and help drive demand for Intel products," Leglise explained. "Do you need a GHz laptop if you already have a 2GHz notebook? Probably not, but technologies that don't draw the batteries down are something most people definitely want."
Some investments are what Leglise calls gap fillers: companies that develop technology that "Intel doesn't do well...We prefer investing to partnering when it comes to entering new business areas," he explains. "Sure, like Intel, Sony and Philips are working on Home Networking, but those companies are unusually not very quick in responding to market opportunities."
Intel has two specialised funds to provide investment focus, including the $500m Intel Communications Fund (which concentrates on accelerating Intel voice and data communications initiatives), and the Intel 64 Fund, which relates to Intel's Itanium processor family.
Intel Capital typically takes small minority stakes in start ups - generally less than $10 million each. If an investment furthers the larger strategic goal of advancing computing platforms, then it is also likely to be financially successful, Leglise argues. The portfolio is valued at approximately US $798m and has contributed billions in cash to Intel in its 10 years history.
More recently, Intel Capital has developed an interest in companies which help accelerate the adoption of technology in emerging markets. Those investments have increased from less that 5 per cent of Intel's deals in 1998 to about 40 per cent last year. Asia Pacific (including Japan) is the most important area to invest, followed by Europe and Israel and Latin America. ®