Hewlett Packard Enterprise Makes a $100 Million Bet on Startups

Meg Whitman, chief executive officer of Hewlett Packard Enterprise, sat down with her top lieutenants last month at the Palo Alto headquarters to evaluate a technology storage company and a data-center-tools startup. She analyzed product details, asked about capital expenditures, and wondered about energy efficiency. The businesses, though, aren’t the billion-dollar acquisition targets that her company has been known for. They’re startups hoping to win investments from HPE’s venture capital arm.

Putting money into startups is a way for the company to contend with new technologies from rivals like Amazon.com Inc. and Google. It’s also an effort to end a checkered spending pattern on acquisitions in the past decade. The business is still making purchases—it acquired Aruba Networks for roughly $3 billion last year—but venture investments provide an opportunity to make cheap bets on promising companies. HPE's VC arm aims to do about 10 to 12 deals annually and has already closed a couple this year.