Cox Enterprises is investing a quarter of a billion dollars with board member Tripp Rackley, betting the serial entrepreneur will be able to profit from emerging trends in media and technology.
Cox Enterprises, the closely held company that includes the third-largest U.S. cable operator, as well as automotive services and radio and TV stations, is handing over $250 million to Rackley, who has built a track record founding and selling companies to buyers such as Qualcomm and Intuit.
With the money, Rackley said he hopes to start about five to 10 companies specializing in media and security, as well as mobile commerce and payments. The strategy includes patenting ideas and technology to guarantee full control, he said.
“This is so different than the typical corporate venture arm or venture fund in general,” Rackley said in an interview. “Cox Enterprises is investing in these businesses for the long term. There is no fund life associated with this. We’re not trying to get back to our limited partners to tell them we made these investments and exited these companies.”
While competitors such as Comcast and Google have entire divisions or funds dedicated to investing in companies that invent and integrate new technology, Cox is taking a different approach.
Instead of investing in an existing firm or fund, Rackley and his 15-person team plan to build startups from scratch using seed money. That’s aimed at giving Cox a close relationship with the enterprises.
“We already spend billions on new technology, research and development, but we can’t move as quickly as Tripp,” Jimmy Hayes, Cox Enterprises’ chief executive officer, said in an interview. “This way, we can partner with someone we know, we respect and we trust.”
Last year, Rackley introduced Experience, a company that lets sports fans upgrade their seats at games using mobile devices. Experience charges teams, including the Boston Celtics and the Atlanta Falcons, a transaction fee for every purchase made using their application.
Rackley says he focuses on ideas that aren’t on anyone’s radar in the next three years, and not so outlandish that they can’t grow to commercial scale within seven years. While the businesses Rackley builds may later become a part of Cox Enterprises, that’s not the objective of the investment strategy, Hayes said.
“I don’t want to do things that people are already thinking about,” Rackley said. “And I don’t want to do science experiments.”