Technology Giant Intel

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1.Success Stories and Lessons Learned:Success Story #2: Intel Capital and VMware[Original Blog]

2. Intel Capital and VMware

Intel Capital, the investment arm of technology giant Intel, has a long history of successful investments in the tech industry. One of their most notable success stories is their investment in VMware, a software company specializing in virtualization and cloud computing.

1. The Investment:

In 2007, Intel Capital invested $218.5 million in VMware through the purchase of 9.5 million shares of the company's Class A common stock. At the time, VMware was a rapidly growing company with a strong market position in the virtualization space. Intel Capital recognized the potential of VMware's technology and saw an opportunity to support the company's growth.

2. The Growth:

Intel Capital's investment in VMware proved to be a wise decision. Over the years, VMware continued to expand its product offerings and solidify its position as a leader in the virtualization and cloud computing market. The company's revenue grew significantly, and its market capitalization soared. By 2008, just one year after Intel Capital's investment, VMware's market capitalization had surpassed $30 billion.

3. The Exit:

In 2009, Intel Capital decided to exit its investment in VMware. The decision to sell its stake in the company came at a time when the market for technology stocks was booming. Intel Capital sold its shares in VMware for approximately $1.3 billion, generating a substantial return on its initial investment. This successful exit allowed Intel Capital to reinvest the proceeds into new opportunities and continue its mission of supporting innovative technology companies.

4. Lessons Learned:

The success of Intel Capital's investment in VMware can be attributed to a few key factors. First, Intel Capital recognized the potential of VMware's technology and the growing demand for virtualization solutions. By investing in VMware, Intel Capital aligned itself with a company that was well-positioned to capitalize on this trend.

Second, Intel Capital's investment in VMware was strategic in nature. The company saw an opportunity to support VMware's growth and leverage its own resources and expertise to help the company succeed. This strategic partnership allowed both Intel and VMware to benefit from each other's strengths and create value together.

Lastly, Intel Capital's decision to exit its investment in VMware at the right time was crucial. By taking advantage of the favorable market conditions and selling its stake at a high valuation, Intel Capital was able to realize a significant return on its investment.

In conclusion, Intel Capital's investment in VMware is a prime example of a successful corporate venture capital partnership. Through their strategic investment, Intel Capital supported VMware's growth and ultimately generated a substantial return on their investment. This success story highlights the importance of identifying promising technology companies, making strategic investments, and timing exits appropriately. By following these principles, corporate venture capitalists can increase their chances of achieving similar success in the dynamic world of technology investing.