Most corporate venture capital funds are set up to give their parent companies early access to emerging technologies that can help their existing businesses innovate. But Cox Enterprises launched its venture arm, Socium Ventures, in June 2023 to diversify its businesses.
Socium Ventures’ sophomore fund recently closed on $300 million. Like its debut fund, which was also $300 million but was open-ended with no specified vintage, Fund II will invest in enterprise software, fintech, government tech, healthcare services and sustainability solutions.
Best known for its major subsidiaries, Cox Communications and Cox Automotive, the Atlanta-based conglomerate generates $23 billion in annual revenue.
“Our fund looks like a traditional venture fund – where we’re focused on financial returns, but we’re also trying to diversify the company through an investment vehicle that is doing things outside of cable and auto,” Andrew Davis, managing partner at Socium and head of strategy and investments at Cox Enterprises, tells Venture Capital Journal.
Socium’s sole limited partner is “a very, very large institution, but a 100 percent family-owned company that is always reinventing itself for the future to make an impact,” he adds.
Finding companies in which it would like to own a larger equity stake is one of the advantages of Socium being a part of Cox Enterprises, says Davis.
“Some of the companies in the venture portfolio we may actually want to own one day,” he notes. “And if that partnership between us and them works out and we feel like it’s the right way to go, that’s a really cool option that no other venture firm really has to offer their portfolio companies. That’s another barometer of our success.”
The fund’s portfolio includes a few companies that Cox has assisted in proof of concept or pilot projects as a commercial partner, even though it didn’t invest in them for the purpose of enhancing technological innovation within its core businesses, Davis notes. Two examples are Centivo, which provides self-funded affordable health plans for workers and employers, and HopDrive, whose car moving services aim to offer on-demand, short-duration moves for auto dealers and rental car companies.
“Cox can serve as a large customer for some of these companies where it makes sense,” he adds.
Socium plans to invest in 15-20 companies out of Fund II – mostly in the US and Canada – with checks ranging between $3 million and $25 million. Roughly 30 percent of its capital will be reserved for follow-on investments.
Fund II will focus more on Series A and B rounds than Socium’s debut fund. All but three of the 19 investments out of Fund I were in later-stage companies raising Series B or later rounds. That was a response to opportunities that arose from the downturn in financial markets, which prompted some later-stage companies to recapitalize sooner than they otherwise might have, Davis explains.
Among the companies backed by Fund I are Crisp, a “collaborative commerce platform” for retailers, distributors and brands; Carbyne, which operates cloud-based contact center solutions; Devoted Health, a healthcare company for seniors; Nova Credit, which provides alternative credit data to lenders and businesses; and Humane, a consumer electronics company that developed a wearable AI device called the AI Pin, according to Crunchbase.
With Fund II, “you will see us be a little bit earlier, but I think you’ll always see a mix,” Davis says. “Our intent is to be an evergreen fund that effectively can fund through the entire life cycle of a company.”
Socium is willing to lead some funding rounds and follow other VC firms in others, collaborating with “trusted partners that we’ve worked with in the industry over time,” says Davis. Among the VC firms with which Socium has worked are Accel, Andreessen Horowitz, Durable Capital, FirstMark Capital, General Catalyst, Greenoaks Capital Partners and Index Ventures.
Reinforcement
To help lead the fund, Socium recently hired David Yang as a partner. Yang was previously a partner at Activant Capital, based in Greenwich, Connecticut.
While the intention is to “be more systematic about focusing on” Series A and B rounds, part of Socium’s draw is that “the mandate is quite broad,” Yang says. “We can also be opportunistic, investing later in the life cycle of a company. We could speak for multiple rounds. And then the broader Cox investment platform can potentially, with its deep pockets of capital, be a partner there as well.”
Yang, whose investment background includes fintech and e-commerce, spends a lot of time thinking about what he calls commerce infrastructure, which comprises all the technology used “to make, move, sell and pay for stuff.” Products and services in those industries have shifted in recent years amid a renewed emphasis on supply chains and logistics in the wake of costly disruptions during the pandemic, and that has spurred new companies to be built, he notes.
Where sales infrastructure is concerned, “E-commerce is shifting from a search-led, intent-based world, a la Amazon, to a social, entertainment and maybe video- or AI-enabled future setting,” Yang says. “That’s really interesting, too.”
The consumer fintech category is still in its infancy with “a lot more interesting products to be built with all the money that’s gone into infrastructure,” adds Yang. “And frankly there’s more products to be built to serve the middle-income American, as opposed to maybe the paycheck-to-paycheck [market], where a lot of consumer fintech and fintech infrastructure has been done.”
AI perspective
Just as an entire generation of businesses such as DoorDash, Uber and Lyft, as well as many fintech companies, became mobile-centric once they saw consumers shifting attention from personal computers to their phones, Davis expects software across a broad swath of industries to be transformed by artificial intelligence.
“You don’t have to invest just in AI to take advantage of that trend,” he says. “You have to think at the meta layer of how people deliver products and services and how that might change because AI may create new winners and new losers and also change how things work.”
Davis also anticipates increased intersection of biology and advanced compute capabilities over time, enabling “significant advances in protocols for care of drugs, for prevention of diseases and viruses.”
He adds that Socium has “spent a lot of time with [Dimension Capital] talking about ideas that would be potentially appropriate for us.” Dimension’s partners are “good friends” who focus on biotech, life sciences, hardware, software and machine learning, he says.
Cox executives’ far-reaching professional relationships have opened up a “huge advisory network” for Socium, which, together with the reputations of Yang and others who have joined the firm, makes it easier to source deals, Davis says.
Executives at publicly listed companies that Davis got to know while working at T Rowe Price are also aware of Socium’s thesis and “send people our way that they’re either mentoring or that they’ve invested in personally,” he adds. That, along with building a reputation as a trusted adviser and partner to founders “goes a long way when they recommend you to someone else. That is the way you get into deals that are pretty contested and difficult to squeeze into.”
Most corporate venture capital funds are set up to give their parent companies early access to emerging technologies that can help their existing businesses innovate. But Cox Enterprises launched its venture arm, Socium Ventures, in June 2023 to diversify its businesses.
Socium Ventures’ sophomore fund recently closed on $300 million. Like its debut fund, which was also $300 million but was open-ended with no specified vintage, Fund II will invest in enterprise software, fintech, government tech, healthcare services and sustainability solutions.
Best known for its major subsidiaries, Cox Communications and Cox Automotive, the Atlanta-based conglomerate generates $23 billion in annual revenue.
“Our fund looks like a traditional venture fund – where we’re focused on financial returns, but we’re also trying to diversify the company through an investment vehicle that is doing things outside of cable and auto,” Andrew Davis, managing partner at Socium and head of strategy and investments at Cox Enterprises, tells Venture Capital Journal.
Socium’s sole limited partner is “a very, very large institution, but a 100 percent family-owned company that is always reinventing itself for the future to make an impact,” he adds.
Finding companies in which it would like to own a larger equity stake is one of the advantages of Socium being a part of Cox Enterprises, says Davis.
“Some of the companies in the venture portfolio we may actually want to own one day,” he notes. “And if that partnership between us and them works out and we feel like it’s the right way to go, that’s a really cool option that no other venture firm really has to offer their portfolio companies. That’s another barometer of our success.”
The fund’s portfolio includes a few companies that Cox has assisted in proof of concept or pilot projects as a commercial partner, even though it didn’t invest in them for the purpose of enhancing technological innovation within its core businesses, Davis notes. Two examples are Centivo, which provides self-funded affordable health plans for workers and employers, and HopDrive, whose car moving services aim to offer on-demand, short-duration moves for auto dealers and rental car companies.
“Cox can serve as a large customer for some of these companies where it makes sense,” he adds.
Socium plans to invest in 15-20 companies out of Fund II – mostly in the US and Canada – with checks ranging between $3 million and $25 million. Roughly 30 percent of its capital will be reserved for follow-on investments.
Fund II will focus more on Series A and B rounds than Socium’s debut fund. All but three of the 19 investments out of Fund I were in later-stage companies raising Series B or later rounds. That was a response to opportunities that arose from the downturn in financial markets, which prompted some later-stage companies to recapitalize sooner than they otherwise might have, Davis explains.
Among the companies backed by Fund I are Crisp, a “collaborative commerce platform” for retailers, distributors and brands; Carbyne, which operates cloud-based contact center solutions; Devoted Health, a healthcare company for seniors; Nova Credit, which provides alternative credit data to lenders and businesses; and Humane, a consumer electronics company that developed a wearable AI device called the AI Pin, according to Crunchbase.
With Fund II, “you will see us be a little bit earlier, but I think you’ll always see a mix,” Davis says. “Our intent is to be an evergreen fund that effectively can fund through the entire life cycle of a company.”
Socium is willing to lead some funding rounds and follow other VC firms in others, collaborating with “trusted partners that we’ve worked with in the industry over time,” says Davis. Among the VC firms with which Socium has worked are Accel, Andreessen Horowitz, Durable Capital, FirstMark Capital, General Catalyst, Greenoaks Capital Partners and Index Ventures.
Reinforcement
To help lead the fund, Socium recently hired David Yang as a partner. Yang was previously a partner at Activant Capital, based in Greenwich, Connecticut.
While the intention is to “be more systematic about focusing on” Series A and B rounds, part of Socium’s draw is that “the mandate is quite broad,” Yang says. “We can also be opportunistic, investing later in the life cycle of a company. We could speak for multiple rounds. And then the broader Cox investment platform can potentially, with its deep pockets of capital, be a partner there as well.”
Yang, whose investment background includes fintech and e-commerce, spends a lot of time thinking about what he calls commerce infrastructure, which comprises all the technology used “to make, move, sell and pay for stuff.” Products and services in those industries have shifted in recent years amid a renewed emphasis on supply chains and logistics in the wake of costly disruptions during the pandemic, and that has spurred new companies to be built, he notes.
Where sales infrastructure is concerned, “E-commerce is shifting from a search-led, intent-based world, a la Amazon, to a social, entertainment and maybe video- or AI-enabled future setting,” Yang says. “That’s really interesting, too.”
The consumer fintech category is still in its infancy with “a lot more interesting products to be built with all the money that’s gone into infrastructure,” adds Yang. “And frankly there’s more products to be built to serve the middle-income American, as opposed to maybe the paycheck-to-paycheck [market], where a lot of consumer fintech and fintech infrastructure has been done.”
AI perspective
Just as an entire generation of businesses such as DoorDash, Uber and Lyft, as well as many fintech companies, became mobile-centric once they saw consumers shifting attention from personal computers to their phones, Davis expects software across a broad swath of industries to be transformed by artificial intelligence.
“You don’t have to invest just in AI to take advantage of that trend,” he says. “You have to think at the meta layer of how people deliver products and services and how that might change because AI may create new winners and new losers and also change how things work.”
Davis also anticipates increased intersection of biology and advanced compute capabilities over time, enabling “significant advances in protocols for care of drugs, for prevention of diseases and viruses.”
He adds that Socium has “spent a lot of time with [Dimension Capital] talking about ideas that would be potentially appropriate for us.” Dimension’s partners are “good friends” who focus on biotech, life sciences, hardware, software and machine learning, he says.
Cox executives’ far-reaching professional relationships have opened up a “huge advisory network” for Socium, which, together with the reputations of Yang and others who have joined the firm, makes it easier to source deals, Davis says.
Executives at publicly listed companies that Davis got to know while working at T Rowe Price are also aware of Socium’s thesis and “send people our way that they’re either mentoring or that they’ve invested in personally,” he adds. That, along with building a reputation as a trusted adviser and partner to founders “goes a long way when they recommend you to someone else. That is the way you get into deals that are pretty contested and difficult to squeeze into.”
