Financial investment giant Macquarie Capital has teamed up with digital advertising and brand agency R/GA to invest in a wide range of startups that have potential to disrupt both traditional and digital markets.
The companies have set up a unique partnership — the Macquarie Capital Venture Studio (MCVS) with R/GA — where the investment arm of R/GA (R/GA Ventures) finds startups and vets them with Macquarie Capital, a division of the sprawling Macquarie Group. Then the partners help nurture the startups and run pilot tests of their technology through partnerships with Macquarie’s larger portfolio companies.
Macquarie, with hundreds of billions of dollars in investment assets under management, has developed a big ownership position in infrastructure companies around the world. But it is aware that those traditional businesses can be disrupted by startups with clever technologies.
“Infrastructure is no different in that respect, and we want to be a part of that,” Michael Silverton, head of Macquarie Capital Americas, said in an exclusive interview with VentureBeat. “We partnered with R/GA, as we didn’t want to create our own incubator. We did want to create a platform to identify leaders in technology.”
Macquarie typically invests much higher amounts of money, around $20 million to $150 million, in growth companies.
“We recognize we have to move earlier than our traditional investment timing to capture the opportunities and help them develop efficiently,” said Silverton.
Gene Mauro, head of the R/GA investment team, said the investment amounts are deliberately on the small side.
“We don’t quantify the fund amount. That would put us in the institutional investment business, and we are deliberately not writing a big check to start,” Mauro said. “We come in with a six-figure check.”
Working with Macquarie helps R/GA get perspective and “make sure we are not boiling the ocean” with startups that don’t have a practical use for their ideas, Mauro said.
“This is a game changer, about accelerating your startup’s commercialization,” Mauro said.
While such small investments may not move the needle for Macquarie in terms of its overall rates of return on investment, they do help identify disruptive technologies and unearth ideas that will help its larger companies.
“This comes back to point that whole industries are being impacted by new technology,” Silverton said. “It’s incredibly exciting. To find the players that are going to be successful, you need to be in the early stage. We are helping to develop a new industry. Tech will become more and more important.”
He added, “We need to establish dialogue between entrepreneurs and asset owners to see what those opportunities look like. It’s thinking of the future. You have to see ahead of the curve. It adds value to assets we have.”
Silverton said there are three focus areas. One theme is called “inspect, detect, and protect,” which includes the sensors, maintenance, and safety technologies to protect infrastructure. That’s essentially the Internet of Things, or making everyday objects smart, connected, and sensored.
The partnership is also investing in the theme of distributed energy or renewable energy. And finally the partners are looking at productivity and automation through technologies such as augmented reality, virtual reality, mixed reality, artificial intelligence, and machine learning.
Mauro and Silverton said they have already invested in three companies.