Lenovo is one of several large companies in the tech industry that is providing startup funding for innovators in the tech field. Lenovo will use its new $500 million fund to invest in companies in the fields of cloud computing, big data, artificial intelligence, robots and Internet service spaces.
What’s In It For Lenovo?
Essentially, small startups in the tech industry can do what large companies like Lenovo can’t always accomplish. They can take more risks because they have less to lose. Lenovo is one company that understands the value of partnering with tech industry startups that can create innovative products that synergize well with what it produces.
Its practice of providing startup funding has helped it invest in companies like biometrics specialist Nok Nok Labs, which can produce accessories that would be useful to a consumer that is thinking about buying a Lenovo product and cares about security.
Why Is Lenovo Doing This Now?
Lenovo is facing a tough marketplace that includes lagging Chinese demand for smart phones. The good news for Lenovo is that its market share has increased slightly from 19.4 percent in Q1 2015 to 20.1 percent in Q1 2016. The bad news is that actual shipments have dropped by 8.5% over the same time frame. The tech industry also moves pretty fast. A company that can’t innovate or provide startup funding for innovators is likely to lose out. Lenovo CTO had this to say about it:
Technology breakthroughs are changing the way all of us live today. With our long-industry history and experience of driving and developing core innovations, we’re well-prepared to shape the future of game-changing technologies through funding and nurturing start-ups and bringing incubator projects to market.?
This basically means that Lenovo is working on staying flexible by not only providing startup funding for innovators in the tech industry, but also spinning off some of its divisions into subsidiaries that can seek third party funding. Lenovo Cloud and Lenovo Connect are just two of these subsidiaries that can take advantage of incubation from their parent company’s Lenovo Startup and Incubator Group.