At first glance, the maker of Cheerios and Cocoa Puffs might not fit the image of a cutting-edge venture capital investor.
But with the food business moving to healthier offerings and online distribution, General Mills has created a venture capital unit that recently led a $3 million investment in Rhythm Superfoods, a specialty start-up that makes kale chips and broccoli crisps.
General Mills, based in Minneapolis, is part of an increasing number of old-economy companies, including the convenience chain 7-Eleven and the Campbell Soup Company, that have joined a crowd of technology companies to create venture capital funds. Through them, they scout for new products or services and promising potential business partners.
Their moves have accompanied a surge and recent crest in the valuations of many venture capital-backed start-ups. Critics say the corporate-run funds have contributed to inflated valuations for start-ups, and some funds have begun selling stakes even as they face reduced valuations on some holdings.
Reports recently surfaced that Intel’s fund, the largest of its kind, might sell up to $1 billion of its holdings as it narrows its strategy under its chief executive, Brian M. Krzanich.
With valuations of many young, private companies faltering as interest in initial public offerings of stock has waned, corporate venture investing faces a test.
“I think some of the corporate V.C. will get a little less enamored as the venture market goes from euphoria into a little more normal period,” said J. Sanford Miller, a general partner at Institutional Venture Partners in Menlo Park, Calif.
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Since 2011, the number of companies making venture capital investments has risen 79 percent, to 801 globally, according to Global Corporate Venturing, a data provider. The ranks include Verizon Ventures, Volvo Group Venture Capital, Chevron Venture Capital, Pfizer Venture Investments and Blue Cross Blue Shield Venture Partners.
Even as total venture capital investment more than doubled from 2011 to 2015, to $58.8 billion, the amount invested by corporate venture funds quadrupled to $7.6 billion in the same period, according to the National Venture Capital Association. Corporate funds make up 12.9 percent share of the total, the highest since 2000.
As a sign of how start-up valuations have waxed and waned, the size of the median late-stage fund-raising roughly tripled from 2012 to 2015, but it has fallen by 23 percent so far this year, according to Global Corporate Venturing.
For many company funds, financial gain is less important than finding the next big idea.
Arvind Sodhani, who led Intel’s venture unit for 10 years, until mid-2015, said corporate venture investing has grown partly because of interest by chief executives. “C.E.O.s who are worried they’re going to get disrupted want to have an outpost in Silicon Valley to discern where the disruption is coming from,” he said.
Such corporate funds have “clearly been driving up valuations,” he added.
For General Mills, which has also invested in the plant-based food maker Beyond Meat and two other start-ups, the venture capital fund is a way to keep pace with the growing number of small food brands that have found consumer success, especially online.
“The traditional consumer packaged goods model of big advertising budgets, trade leverage and scale — a lot of those factors have been neutralized by these small brands,” said John Haugen, who heads the General Mills venture fund after managing brands such as Nature Valley, Yoplait and Hamburger Helper. Emerging brands, he added, “have alternative pathways to market online.”
Technology companies pioneered corporate venture funds 30 years ago, followed by media, finance and health care companies. The two giants of the field are Intel, with stakes estimated by outsiders of more than $5 billion in more than 400 companies, and Google, now Alphabet, which has a $2.4 billion venture fund called GV with more than 300 investments.
Comcast Ventures invests in companies it can later introduce to its cable and broadcast television customers. In 2009 and 2011, it took stakes in iControl Networks, a broadband home security and energy management service, and it later offered it to its customers through Xfinity Home.
Comcast’s portfolio also includes stakes in DocuSign, Birchbox and TiVo, as well as FanDuel, the fantasy sports betting site. Comcast introduced FanDuel to its NBC broadcast TV unit and its large customer base of sports fans.
Other corporate venture funds acknowledge that their growing ranks have pushed up private company valuations. “In the last few years, there has been more and more corporate V.C. money coming in, and I do think that’s had an impact on valuations,” said Rob Salvagno, head of corporate development at Cisco Investments, which has $2 billion of stakes in 100 companies and 40 venture funds.
Some funds have had bubble-style returns — as well as bubble-style losses. Qualcomm, a maker of chips for mobile phones, participated in a $25 million early-stage funding round for Waze, a crowd-sourced traffic application, in 2010. When Waze was acquired by Google for about $1 billion in 2013, Qualcomm’s return was 10 times its investment.
But some of Qualcomm’s investments have struggled, too. It invested $5 million in the fitness device maker Fitbit in 2013 and had a paper profit of about 20 times its cost after Fitbit’s initial public offering in mid-2015. However, Fitbit shares have since come back to earth, falling 67 percent from their post-I.P.O. peak in August.
Qualcomm is prepared to invest through downturns because such stakes offer a ringside seat for “the next generation of disruptive innovation around our mobile core,” said Brian Modoff, who oversees strategy, mergers and acquisitions and ventures for the company.
Microsoft is renewing a venture investing push, hiring Nagraj Kashyap, the former head of Qualcomm Ventures, in January. The software giant was a big investor in tech and telecommunications companies in 1999 and 2000, but after losing about $5 billion from such investments in the three years that ended in mid-2003, it curtailed the effort in favor of more acquisitions.
Venture investments have mushroomed recently at Salesforce, a maker of customer relations software, which began investing in 2009. Since 2011, Salesforce has increased its investments to $505 million, from $27 million. Five of its 150 companies have had I.P.O.s, and another seven or eight are waiting in the wings.
Salesforce was one of five named participants in a $350 million investment in the cloud-storage start-up Dropbox in January 2014 that valued the company at $10 billion. Recently, however, one mutual fund investor that was part of the same investor group cut its valuation of Dropbox to less than $5 billion.
John Somorjai, executive vice president of corporate development and Salesforce Ventures at Salesforce, said that he did not agree that corporate venture funds have helped inflate valuations. Prices for most investments are set by the traditional venture capital firms that lead the deals, not by the corporate participants, he said.
As for Dropbox, Mr. Somorjai called it “a very small investment.” Salesforce does try to reflect such fluctuations in valuing its holdings, but “no single investment is going to move the needle,” he added.
Sue Siegel, the chief executive General Electric’s GE Ventures, said the company got into venture investing in 2013 to identify up-and-coming entrepreneurs in the health care and energy industries. She added that G.E. planned to stick with venture investing in the current valuation downturn. “When you have these down cycles, it’s a wonderful time for us to look.”