Bridging academia and industry for innovation: Venture building at Telefónica

Telefónica Venture Builder is an external incubation vehicle that creates and invests in start-ups as part of our corporate innovation strategy. Through it, we can explore alliances for the creation of new companies that will allow us to address shared opportunities. By forming alliances with partners such as academia, we can complement each other and combine assets to create differentiated and sustainable competitive advantages for these start-ups.

By forming alliances with other partners like academia, both parties can complement each other and lend their assets towards creating differential and sustainable competitive advantages for these start-ups.

Susana Jurado Apruzzese, Head of Telefónica Venture Builder

Context within Telefónica

Established in 2020 to complement existing investment vehicles and increase the value of Telefónica’s start-up portfolio, the primary purpose of the Venture Builder is to create technology start-ups based on innovative ideas with high market potential. It now sits within Telefónica’s “Discovery” area, where all early-stage innovation initiatives are grouped. This enables the company to pursue innovation with two vehicles—one internal and one external —depending on the nature of the opportunity. Thanks to these two incubation vehicles, we can determine the most appropriate innovation strategy to address an opportunity based on factors such as strategic alignment, resource availability, and window of opportunity. 

Moreover, the proximity of our Venture Builder to other early-stage innovation teams allows us to identify knowledge and technology we have within Telefónica that can create strong competitive advantages for the start-ups we help build—thereby enhancing Telefónica’s overall asset value.

Why university-industry collaboration?

Universities have an important role in innovation ecosystems and are particularly important for new company development. This is supported by the study by Piqué et al. (2020), which showed that universities contribute actively to four main domains in innovation ecosystems: entrepreneurial education, sources of knowledge, investment activities, and facilities.

Collaboration between industry and universities allows us at Telefónica to combine assets and efforts to ensure that the knowledge, technology, and talent from both sectors have tangible societal impact.

New venture creation

Since launching our Venture Builder, we’ve found that both students and researchers at universities are a rich source of ideas for potential startups. Beyond innovative ideas, universities are also a key source of talent and knowledge that these new companies need to succeed. In our experience, programmes where students and researchers at universities work on addressing the challenges that these startups face are a great way to promote this.

There are already many entrepreneurship initiatives within universities that industry can engage with, support, or build upon. However, based on our experience, four key elements are essential to successfully building new ventures through industry-university alliances:

1. Make space for entrepreneurship. Universities must actively support and promote entrepreneurship by offering dedicated spaces, educational programmes, and recognition for those who engage with it. This means the university should have incubators or accelerators that go a step further than entrepreneurship education and support their students and researchers in their entrepreneurial projects. It also means ensuring IPR policies don’t compromise the start-up’s future through unrealistic conditions for technology transfer, licensing terms, or university equity stakes.
2. Industry is more than an investor – it’s a partner. Corporations bring far more than funding. Startups. They can also help them grow by becoming early customers or providing access to infrastructure, in-house experts, and their wider network of partners. Their involvement and assets can be a key differentiator for new ventures.
3. Sensible cap table distribution. To avoid compromising future investment rounds and long-term sustainability, both the university and the corporation must ensure the start-up’s management team holds a majority equity stake.
4. Set clear goals. Companies and universities differ not only in their way of working but also in their objectives. TAt the outset, both parties should clarify their goals, empathise with each other’s objectives, and understand where they converge. This will help determine what priorities and results are expected from the alliance.

Alliances between industry and universities have strong potential to create innovative, differentiated companies. But to make both the partnership and the resulting start-ups sustainable, key considerations must be addressed from the beginning.

Susana Jurado Apruzzese (author) is the Head of Telefónica Venture Builder. Susana’s career has focused for more than twenty years on innovation. She is currently Telefónica Venture Builder, the vehicle to create and invest in technological startups based on innovative ideas with a high market potential. Previously, she was Head of Telefónica Open Innovation Campus, an initiative to explore and implement innovation models with the academic world. Before this role, for more than seven years, as Head of Innovation Portfolio, she was responsible for executing and evolving Telefónica’s intrapreneurship program, Lean Elephants.