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  • January 2016 (Revised October 2016)
  • Case
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Saudi Aramco and Corporate Venture Capital

By: Joseph B. Fuller, Matthew Rhodes-Kropf and Nathaniel Burbank
  • Format:Print
  • | Language:English
  • | Pages:16
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Abstract

Saudi Aramco launched an internal venture capital arm in 2011, which promptly became the world's largest investor in energy related startups. In choosing to proceed, the company's New Business Development unit (NPD) wrestled with a number of challenges. How should the fund be structured, as a fully independent, venture capital partnership or as a business unit? How should it be governed, and how should the investment committee function? Could mechanisms be developed that ensured the expertise of Saudi Aramco's famously conservative engineering resources could be harnessed in the investment process and its business units enlisted to work with portfolio companies? How could the fund be structured to reflect Saudi Aramco's role in modernizing the economy of Saudi Arabia? The case provides a vehicle for discussing the basics of corporate venture capital and the challenges large corporations face in participating in the world of startups. It also describes how certain industries, like energy, are poorly suited to the investment profile of traditional venture capitalists. The product development cycle is too long and the capital required to develop and test products too great for ordinary, general partnerships to sustain. The case also introduces interesting themes in the role of parastatals in contributing to national economic competitiveness.

Keywords

Venture Capital; Corporate Entrepreneurship; Energy Industry; Saudi Arabia

Citation

Fuller, Joseph B., Matthew Rhodes-Kropf, and Nathaniel Burbank. "Saudi Aramco and Corporate Venture Capital." Harvard Business School Case 816-068, January 2016. (Revised October 2016.)
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About The Author

Joseph B. Fuller

Entrepreneurial Management
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Related Work

    • October 2016
    • Faculty Research

    Saudi Aramco and Corporate Venture Capital

    By: Joseph B. Fuller and Sarah McAra
    • January 2016 (Revised October 2016)
    • Faculty Research

    Saudi Aramco and Corporate Venture Capital

    By: Joseph B. Fuller, Matthew Rhodes-Kropf and Nathaniel Burbank
Related Work
  • Saudi Aramco and Corporate Venture Capital By: Joseph B. Fuller and Sarah McAra
  • Saudi Aramco and Corporate Venture Capital By: Joseph B. Fuller, Matthew Rhodes-Kropf and Nathaniel Burbank
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