- A flood of venture capital has increased competition among VC firms of all types and forced them to find ways to differentiate.
- Comcast Ventures, the investment arm of media giant Comcast, is bringing more specialists in house to set it apart.
- Its new division, Forecast Labs, is helping about a dozen startups, including Hippo and Acorns.
- The company also is pitching its ability to tap experts at its parent company.
- Other firms like Andreessen Horowitz are already offering similar services to startups, though.
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With massive growth in venture capital, VC firms are scrambling for the chance to invest in the next unicorn by retooling their business models and looking for ways to differentiate.
Comcast Ventures, the 20-year-old investment arm of media giant Comcast Corp. whose portfolio includes unicorns Away and Hippo, is betting that bringing more specialists in house will set it apart. To that end, it has created a new arm called Forecast Labs. Led by Arjun Kapur, growth partner at Comcast Ventures, it offers a range of services including media buying, data, strategy, and hiring. (A separate goal is to launch new consumer brands of its own.)
Read more: NBCUniversal and CBS are building teams to go after direct-to-consumer dollars, but startups still think TV is too expensive
Forecasts Labs’ pitch is that it can tap Comcast Corp.
Kapur said the services would give Comcast Ventures an edge in light of increased competition with the big venture capital firms like Kleiner Perkins and General Catalyst as well as other corporate VC firms that are pouring more money into early-stage companies.
“We don’t have a problem winning deals,” Kapur said. “We have a great reputation for being founder-friendly. But it’s a buyers’ market right now. You can easily find investors who will give you the money. For an entrepreneur, you want someone who can help. We needed to bring a lot more value to the table beyond capital.”
For now, Forecast Labs is just four dedicated people out of 28 at Comcast Ventures, although Kapur hopes to grow it. There’s Kapur, who focuses on areas like marketing, product, and analytics and who joined Comcast Partners in March after more than a decade helping grow tech-based companies such as HelloFresh, Squarespace, and TheLadders.
Forecast Labs also has Andrew Kwok, focused on media buying and analytics; Kristy Leong, on marketing, growth, and operations; and Sam Landman, a partner who’s focused on media and social businesses. It’s also hiring a data science expert.
Forecast Labs’ pitch is that it can also leverage other partners at Comcast Ventures and experts at Comcast Corp. Two-thirds of the portfolio companies already have some relationship with Comcast, whether it’s placing TV spots with NBCUniversal or providing benefits to employees. (In its pitch to startups, though, Comcast Ventures emphasizes that it’s a financial, not a strategic VC, meaning its mandate is to show financial returns, regardless of whether it benefits the parent company or not.)
Forecast Labs is selective about which startups it will help
And while all the services are free to the startup, not all will get access to them. Forecast Labs is prioritizing those that it has a significant investment in or sees as having the biggest growth opportunity. By fall, Forecast Labs expects to be servicing 12 startups, and 15 by the end of the year. Comcast Ventures has about 150 companies in all in its portfolio.
Three of those startups, Away, the investing app Acorns, and insurance company Hippo, have used Forecast Labs to run TV advertising.
Using Forecast Labs to test TV helped Acorns lower its acquisition cost to below Facebook and Google, and saved time on spending optimization, said Noah Kerner, Acorns’ CEO.
“We have seen great results in our TV pilot and have already made a commitment to scale our spend on a performance guarantee based program under Forecast Labs,” Kerner said.
Comcast Ventures’ roots in media helped Hippo with marketing and media expertise that it couldn’t get from other VCs, said Andrea Collins, head of brand marketing for Hippo. Hippo also worked with Comcast’s Xfinity to market its insurance to Xfinity customers, giving Hippo a new avenue to sign up customers.
Comcast Ventures joins other VCs that have added services
Other VC firms from Andreessen Horowitz to Lerer Hippeau have been specializing in services, and Comcast Ventures’ corporate relationships could be a plus for some startups, but there could be caveats, said Mike Duda, managing partner at agency and venture capital fund Bullish.
“I can’t see them saying, ‘We should really go to Viacom,'” Duda said. (Comcast Ventures said it’s agnostic when it comes to buying TV advertising, however.)
Comcast Ventures is still establishing success metrics for Forecast Labs will look like, but essentially, the company expects to see the injection of services make its investments grow bigger and faster, in turn boosting its own returns.
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