The number of large deals nearly doubled in the second quarter (Q2).
Corporations – including Intel, Tencent, Yahoo, Salesforce and Workday beyond MTS, Sistema and Google – were heavily involved in Q2’s large deals. This follows a rise in deals exceeding $100m. In the 12 months to the end of the first quarter there were 47 deals of at least $100m, 41 of which included corporate venturing units in their investment histories, according to Global Corporate Venturing.
There were 32 large deals in the venture industry globally between April and the end of June, compared with 18 in the first quarter.
These large deals of at least $100m have usually been outliers, occasional rounds distant from most peers, but are now becoming a significant portion of the amounts invested, as illustrated by the 32 in Q2 2014, compared with 10 in the same period last year.
These 32 raised nearly $7.4bn overall in equity and debt, excluding potential raisings under way, such as US-based healthcare services provider ZocDoc, which is looking for $152m at a reported $1.6bn valuation.
Private venture-backed companies worth more than $1bn are regarded as unicorns for their perceived rarity, but in Q2 both US-based transport firm Uber and China-based Wasu Media raised rounds of more than $1bn.
But, reflecting the differences in the two countries’ venture landscapes, Uber turned to a diverse syndicate of corporate venturing units (Google Ventures), mutual fund and financial services managers (Fidelity Investments, Wellington Management, Summit Partners and BlackRock), and venture capital firms (Kleiner Perkins Caufield & Byers and Menlo Ventures), while Wasu sold 20% to co-founders of one of China’s biggest companies, Alibaba.
Where
With 18 deals in Q2, the US hosted more than half the large deals, with China-based private entrepreneurial companies the location for six deals. The remainder were scattered around the globe, from the UK to South Korea and India to Brazil, US-based investors were also influential syndicate members involved in every deal apart from one, in Russia – phone operator MTS and conglomerate Sistema’s $150m round for local e-commerce business Ozon.
Sectors
As the number of large deals expanded in Q2, so the number of sectors covered also increased. There were deals across transport, energy, consumer, technology, financial services, media and healthcare, although almost all were built on technological drivers of change.