As Verizon moves towards billion-dollar annual cost cuts, the company is making changes to the leadership of its 20-year-old corporate venture arm.
Chris Bartlett, the five-year head of Verizon Ventures, has transitioned into a new division, becoming CFO of Verizon Business Group. In his stead will be Madison Rezaei, Verizon’s vice president of new business strategy, who will be head of the venture arm and oversee its investment team and day-to-day operations. John Nitti, Verizon’s senior vice president of strategic partnerships and new business development, has been named Verizon Ventures’ CIO, where he will be identifying Verizon’s investment focus and strategy as well as working with founders.
The transition is more meaningful than just new leadership. The entire venture division has been moved underneath the Verizon umbrella. The venture arm will now sit under the corporate strategy group—under Verizon’s Chief Strategy Officer Rima Qureshi—rather than under Verizon CFO Matthew Ellis.
“Overall, Verizon has been making concerted efforts to streamline our organization across different business units,” Nitti told me in an interview Wednesday, adding later: “Bringing Verizon Ventures into the corporate strategy team seemed to make sense—especially as we work with the largest partners of Verizon across the ecosystem.”
The shift for Verizon Ventures comes as Verizon cuts costs across the entire corporation. On the company’s last earnings call, CEO Hans Vestberg said his team had “designed a company-wide cost-savings program that we expect will save between $2 billion to $3 billion annually by 2025,” and said he continued to work to grow revenue and reduce expenses. “I’m glad to see sequential improvements based on our efforts, but there is more to do,” he said.
It’s possible that some of the cost-cutting may ultimately influence the venture division. When I asked Nitti about Verizon Ventures’ office in Tel Aviv, Israel, he said that Verizon was “looking to possibly restructure parts of the team” across all of its offices and employees. That being said, Nitti says Verizon Ventures wasn’t impacted by the cuts and would stay the same size (now 13 people).
“If you look at the size of the team and our focus areas, that all remains the same,” Nitti says. “Whether it’s cost-cutting or streamlining or being more effective, we’re just looking to pivot the resource[s] where we’re going to ultimately get the best output. But no—there have been no cuts to this overall part of my team, nor will there be.”
As part of the restructuring, Rezaei says that there is “huge untapped potential” in being able to integrate existing portfolio companies into Verizon’s existing commercial partnerships. The venture arm will continue making investments that align with Verizon’s longer-term goals, Rezaei says, focusing on network optimization, end use cases for 5G (such as virtual reality), and broadband strategy (i.e. fixed wireless access).
Rezaei and Nitti will also be adding some new skill sets to the team. Prior to this transition, Rezaei worked closely with Verizon’s Big Tech partners, and she has previously helped private equity investors conduct due diligence. Nitti has been with Verizon for more than seven years, managing the company’s partnerships with other corporations.
It’s difficult to discern whether Verizon Ventures has had a successful investment trajectory. The company won’t disclose any return figures or share the amount of capital Verizon sets aside for venture. Rezaei wouldn’t comment on whether any of its portfolio companies had experienced down rounds in recent months.
When asked about exits, Verizon would only provide five examples: fantasy sports operator FanDuel, which was acquired by Paddy Power Betfair for an undisclosed sum in 2018; location safety feature company Life360, which went public in Australia in 2019 (it canceled plans for a U.S. IPO last year); ad tech startup Adtheorent, which went public via a $1 billion SPAC merger in 2021; and mobile network automation company Cellwize, which was acquired for an undisclosed sum by Qualcomm last year. Verizon also acquired one of its portfolio companies—drone company Skyware—in 2017, though it ended up shutting it down.
Verizon did share that it has invested in 38 new startups and made 27 exits in the last five years. Approximately 20% of its portfolio companies have commercial partnerships with the larger corporation, it says, and a spokesperson provided the following statement in regard to its performance: “Verizon continues to see both financial and strategic value from its Ventures arm, as demonstrated by its long-term stability and continued investment.”
Based on deals that have been publicly announced, PitchBook pegs Verizon at 58 exits since inception—more than half of which involved a third-party acquisition.
Rezaei says Verizon Ventures has historically made investments in around 10 to 15 companies a year. Last year the company invested in seven companies, and made additional follow-on investments, too, she says.
“It ebbs and flows a little bit based on what we see in the market, market conditions, valuations, of course, and also the macro strategy of Verizon,” Rezaei says.
Historically, corporate venture arms have been known for pulling back during market downturns, as budgets shrink. But Rezaei and Nitti say they don’t expect that to be the case in 2023, noting that corporate venture investing has remained stable in recent months, both at Verizon and across the broader industry. They both say they are optimistic about the year ahead.
“Obviously you always have in the back of your head economic concerns with any economic downturn,” Nitti says. “However, I think the evolution of this team, positioning it within the overall company strategy team, only shows the commitment and investment to what we’re doing here.”
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Vannevar Labs, a Palo Alto-based technology provider for national security, raised $75 million in Series B funding. Felicis led the round and was joined by DFJ Growth, Aloft VC, General Catalyst, Point72, Costanoa Ventures, and Shield Capital.
- ThriveCart, an Austin-based shopping cart, sales funnels, and educational course creation technology company, raised $35 million in funding from LTV SaaS Growth Fund.
- Anyfin, a Stockholm-based loan refinancing platform, raised €30 million ($32.46 million) in Series C funding. Northzone led the round and was joined by Accel, EQT Ventures, FinTech Collective, Quadrille Capital, Augmentum FinTech, and Citi Ventures.
- ContractSafe, a Malibu-based contract management platform, raised $27.5 million in funding from Five Elms Capital.
- Carry1st, a Cape Town, South Africa-based mobile games publisher, raised $27 million in funding. BITKRAFT Ventures led the round and was joined by a16z, TTV Capital, Alumni Ventures, Lateral Capital, Kepple Ventures, and Konvoy.
- Chord, a New York-based commerce platform, raised $15 million in Series A extension funding. Bright Pixel Capital and Eclipse co-led the round and were joined by GC1 Ventures, TechNexus Venture Collaborative, Anti Fund VC, Imaginary Ventures, Foundation Capital, and White Star Capital.
- Rx Redefined, an Oakland-based medical supply services provider for group practices, raised $8 million in Series A funding. Crosscut Ventures Management led the round and was joined by Tusk Venture Partners, Silverton Partners, Pisgah Fund, former General Electric CEO Jeff Immelt.
- knownwell, a Boston-based weight-inclusive health care company, raised $4.5 million in seed funding. Flare Capital Partners led the round and was joined by the Flybridge LTV Operator Fund, Oxeon, and others.
- Suppli, an Austin-based digital accounts receivable platform, raised $3.1 million in seed funding. Equal Ventures led the round and was joined by Audacious Ventures, Dash Fund, Built Technologies CEO Chase Gilbert, and Wrapbook CEO Ali Javid.
PRIVATE EQUITY
- Salt Creek Capital acquired Cotta Transmission Company, a Beloit, Wis.-based gearboxes and transmissions manufacturer and designer. Financial terms were not disclosed.
- Socius Insurance Services, backed by Abry Partners, acquired the assets of Kelly Underwriting Services, a Farmingdale, N.Y.-based managing general underwriter. Financial terms were not disclosed.
- StenTech, an Align Capital Partners portfolio company, acquired Advanced Tooling Design, a San Jose-based stencils, tooling, fixtures, and related accessories designer and manufacturer. Financial terms were not disclosed.
OTHER
- Discord acquired Gas, a compliments-based social media app. Financial terms were not disclosed.
- Forter acquired Immue, a Tel Aviv-based bot detection company. Financial terms were not disclosed.
- JW Player acquired InPlayer, a London-based subscription management and identity management technology provider. Financial terms were not disclosed.
- Klue acquired DoubleCheck Research, a Concord, Mass.-based win-loss and churn analytics company. Financial terms were not disclosed.
- Nextivity acquired Assured Wireless Corporation, a San Diego-based high power user equipment technology company. Financial terms were not disclosed.
IPOS
- TXO Energy Partners, a Fort Worth-based oil and gas production company, plans to raise up to $105 million through the sale of 5 million shares priced between $19 and $21.
- Mineralys Therapeutics, a Radnor, Pa.-based phase 2 biotech for cardiorenal disorders, filed for an initial public offering.
FUNDS + FUNDS OF FUNDS
- Greybull Stewardship, a Jackson, Wyo.-based investment firm, raised $140 million across two funds. $100 million will focus on U.S.-based small businesses and $40 million will go toward its evergreen fund.
PEOPLE
- Arsenal Capital Partners, a New York-based private equity firm, hired Jim Rock as an operating partner. Formerly, he was with Seegrid Corporation.
- Coral Tree Partners, a Los Angeles-based private equity firm, promoted Jake Simons to vice president.
- CRV, a San Francisco-based venture capital firm, hired Brian Zhan as an investor. Formerly, he was with Starburst.
- Lightspeed Venture Partners, a Menlo Park, Calif.-based venture capital firm, hired Moritz Baier-Lentz as partner. Formerly, he was with BITKRAFT Ventures.
- NightDragon, a San Francisco-based venture capital firm, hired Josiah Hsiung as principal. Formerly, he was with Instacart.
- Osceola Capital, a Tampa-based private equity firm, promoted Patrick Watkins to partner and Will Newbrander to partner and CFO. Also, Kurt Schwab was hired as vice president. Formerly, he was with Cold Bore Capital.
- Redpoint Ventures, a Woodside, Calif.-based venture capital firm, promoted Jacob Effron to partner.
- The Halifax Group, a Washington, D.C.-based private equity firm, hired Shawn Xiao as a vice president. Formerly, he was with GTCR.
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