There’s no shortage of established non-technology companies that are flocking to Silicon Valley to invest in the next Uber or Airbnb. For example, Campbell’s Soup just started a venture capital fund as did Sesame Street-creator Sesame Workshop.
JetBlue Airways announced in February that it too would create a venture capital arm and plant it in Redwood City, Calif., just miles from tech giants like Google, Facebook, and Apple. But some may argue that the airline is late to corporate investing in tech startups.
In the first quarter of 2015, 106 different corporate venture capital arms invested in U.S. Startups, representing a 82% jump from the same quarter three years earlier, according to data from CB Insights. Whether they’ll end up making money or losing their shirts is anyone’s guess.
Coins2Day sat down with JetBlue CEO Robin Hayes and the president of JetBlue Technology Ventures, Bonny Simi, for an exclusive interview. They explained how the company hopes to use its investing to identify cutting edge technology that could help it with its call centers and customer service, bring virtual reality air travel entertainment, and improve its computer security.
“In other parts of the travel industry there has been a lot of disruptions with Uber and Airbnb, but the airline industry hasn’t yet faced that,” Hayes said, hinting that disruption may be coming and that he wants to be ready for it.
JetBlue, the once upstart airline that now has a market value of $6.5 billion, has a reputation for adopting new technology more quickly than some of its counterparts. It was one of the first to offer live satellite TV on flights, and recently started offering higher speed free in-flight Wi-Fi.
“We are not trying to be corporate tourists,” said Hayes, trying to dispel the idea that his company is just following a fad. “There are some companies that want to come see what’s happening in Silicon Valley but never follow up. That’s not our intent.”
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Headed by pilot and former human resources chief Simi, JetBlue’s venture group plans to make five to seven investments annually. Investments, which will range in size from $250,000 to $1 million, will be targeted at early stage startups.
On Friday, JetBlue announced its first investment from the fund: data science startup Flyr. That startup’s machine learning and analytics predict when flight and hotel prices will drop.
Travel booking sites like TripAdvisor are already using Flyr’s technology to help customers find cheaper flight prices. JetBlue declined to reveal the amount of its investment or the size of its stake.
JetBlue (JBLU) isn’t the first airline to push into startup investing. Israel’s El Al Airlines operates a startup accelerator and fund called Cockpit. In fact, Simi is hoping to model JetBlue’s fund after El Al’s approach.
In many ways, investing in startups is about learning about what the future will look like, even for an airline, Simi said.
“What we are going to be using in JetBlue in three years is being built now in Silicon Valley,” Simi said.