Cisco Adding $150M to $2B Venture Investment Arm

Cisco Systems Inc. (CSCO) plans to invest an additional $150 million in startups to speed up the development of new technologies.

Cisco Investments, the company’s venture-capital arm, will use the funds to spur advances in projects such as data storage and innovation in India and the Internet of Things, which refers to devices such as Web-connected power meters, home appliances and traffic lights, Cisco said in a statement today.

The biggest maker of networking equipment also unveiled minority investments in three companies -- Alchemist Accelerator, Ayla Networks and Evrythng -- that are working on technologies related to the Internet of Things. Cisco, which is grappling with slowdowns in emerging markets and threats to its core routing and switching businesses, has already invested $2 billion in more than 80 companies and 35 venture funds run by others.

“Our ability to identify and stay ahead of market disruptions is deeply rooted in our build, buy, partner and integrate approach to innovation,” said Hilton Romanski, Cisco’s senior vice president of corporate development.

A new goal for Cisco Investments will be to connect funded startups with company executives, partners and customers, the San Jose, California-based company said.

Cisco is facing a slowdown brought about by growing competition in emerging markets from Chinese firm Huawei Technologies Co. and a shift to low-cost technologies that allow companies to build some of their own network equipment, an approach called software-defined networking.

Revenue growth has slowed to 5.5 percent in the latest fiscal year, which ended July 27, 2013, from 11 percent in 2010. Routers and switches brought in $23 billion for Cisco in the latest fiscal year, 47 percent of total sales and flat from the year before.

Cisco is scheduled to report its fiscal third-quarter earnings on May 14.

To contact the reporter on this story: Jordan Robertson in San Francisco at jrobertson40@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, Stephen West

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.