Nike tries again at venture capital and scores a touchdown? That’s the news apparently left out of a report by CB Insights. Published on March 22, 2016, the report told of big “bets” by fitness brands in tech and other areas. CB Insights’ findings were culled something called the Business Social Graph. To tell this story, you really numbers not pictures, so continue reading.
Nike started its corporate venture capital unit in late 2011. In the beginning, Nike’s team was Avi Sahi and John Hull. According to Linkedin, Avi Sahi was involved in two transactions involving a minority investment in DyeCoo Textile and another in Llamasoft. Both investments fit the venture capital unit’s mission of sustainability and innovation.
It appear Nike appears invested $2 million in DyeCoo and $3 million in Llamasoft. The amounts come from quarterly filing reports summarized in the chart at the bottom. While the amounts may be small for Nike, the amount are larger for founders of these companies.
Nike invested, along with Intel Capital, in Reflektion in March 2014. Reflektion brings machine learning to e-commerce. Nike investment appears to be $1 million and was part of the $8 million Series A round. Nike also invested $1 million in the Series A round of Grabit. Grabit makes adhesion technology for material handling and industrial automation.
Now Hannah Jones appears to head Nike’s corporate venture capital ambitions after the departure Avi Sahi left in November 2014. John Hull left earlier in 2012. She now leads the sustainable business and innovation team at Nike. And Ms. Jones has the title to match: Chief Sustainability Officer & VP of the Innovation Accelerator.
Ms. Jones has picked up the pace of Nike’s investments. Under Avi Sahi, Nike made about one investment each year of approximately $1 million to $3 million (see chart below). Since 2014, Nike has not announced any new minority investments. But according to SEC filings, Nike has more than double its corporate investments.
By then of 2015, Nike corporate investments increased from $6 million to $17 million. In the three months ended May 31, 2015, the increase was $2 million. For next quarter ended August 31, 2015, the amount increase was $1 million. The last quarter filed by Nike, the amount of increased to $8 million.
Where do the numbers come from? Answer: Not from a Business Social Graph, but from Nike. In the filings, Nike has made investments of non-marketable preferred stock, the kind of security associated with private companies. Nike reports the value of these investment using internal models and assumptions, since there are no public market prices.
Since 2011, these investment have increased from zero to $17 million. The increase may have come from increases in the amount and the value of the investments. The assumption made here is the increases are due additional investments. Why? The increases correspond to publicly announced minority investments by Nike. In addition, the investments have been steady and modest.
If Nike has indeed increased its venture investments, this is good news for founders and startups of Silicon Valley.
Nike’s Quarterly 10-K: 2011 to 2015.