Corning Inc. (NYSE: GLW) said today it has sold its venture capital arm, Corning Innovation Ventures (CIV), to a venture capital group called Scimitar Capital Partners (SCP). The terms of the deal were not disclosed.

CIV will maintain offices in Corning, New York, and Greg Smith will continue to serve as president, according to a Corning statement.

Corning Innovation Ventures was started with an initial fund of $50 million in 2000, near the peak of the bubble. The fund was started mainly to help Corning feel out up-and-coming technology areas, says Smith. "We were founded, not solely for financial gain, but primarily for strategic reasons," he says.

But after Corning sold off its optical components unit to Avanex, the company decided it no longer needed a VC arm. CIV made investments in Cinta Corp., CyOptics Inc., OptXCon Inc., World Wide Packets Inc., Photodigm Inc., Iolon Inc., Ondax Inc., Akara Corp., Celion Networks Inc., LightPointe Communications Inc., Innovance Networks, and Xanoptix Inc, according to its press announcements.

Of course, even without the pressure to turn in big returns, things weren't so easy for CIV while its parent was shrinking and changing around its various businesses (see Corning Woes Continue and Corning: 'We'll Do What It Takes').

The only thing surprising about Corning's departure from the venture capital business is that it didn't happen sooner. The corporate venture funds have been heading for the exits for a while now, and it's likely that Corning's delay was due to the lack of investors seeking a telecom portfolio. In March, the Venture Capital Journal reported that there are about 233 companies with active venture programs this year, down from a high of 488 in 2000 – a 52 percent drop in just three years.

Smith says CIV will retain the shortened version of its name – CIV, LLC – and Corning has kept some small stake in the fund. As for raising a new fund, however, Smith says nothing is planned at the moment. "Keeping our current companies going is enough work for now."

— Phil Harvey, Senior Editor, Light Reading