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H-P Scales Back Investment Activity Amid Quarter-end Shakeup

Listed, Calif.-based Hewlett-Packard has scaled back or eliminated several parts of its corporate venture capital investment structure, said multiple sources who spoke with peHUB.

Further, our sources said, the company is likely to make an announcement within the next two weeks regarding potential M&A plans and other organizational shifts for H-P as the company tries to re-establish itself in the wake of a number of huge transactions and the replacement of its CEO.

“Until the H-P board feels like the company has developed a new plan of action, I would not expect to see them backing very many startups,” said one source.

That is a stark contrast to H-P’s prior investment activity. The tech titan’s multi-faceted investment capacity had it putting more than $600 million to use via direct equity and LP investments with traditional VCs over the last decade-plus. H-P’s investments in companies had, according to an interview with Sanjiv Parikh, a managing director with its corporate VC arm, numbered 65 as of 2008; he said the company provided investments ranging from seed-stage to growth backing. More up-to-date figures on H-P’s investment totals were not available.

H-P is said to have provided support to startups including Fusion I/O, Mimeo and Verdiem in their early stages.

Earlier this year, H-P entered into a partnership with the Angel Capital Association to provide an unspecified amount of funding to startups and angel networks.

As the company’s shares plummeted over the last six months by approximately 40%, shareholders in H-P have watched with increasing concern as newly-installed CEO Meg Whitman attempts to right its fortunes. Shortly after Whitman’s hire, H-P reportedly hired Goldman Sachs to help defend it from activists. For the last six months, shares of H-P have lagged well behind the pace of tech market benchmarks including Apple, Dell, and IBM, each of which have posted gains over that same timeframe. H-P has suffered in the wake of the 2010 acquisition of handset maker Palm, along with the failure of consumer products like its TouchPad, that may force the company to divest consumer-facing products.

The first signs of a quarter-ending shakeup with H-P emerged early Friday morning, with the announcement that chief strategy and technology officer Shane Robison would retire. H-P did not respond to a request for comment.