Telecommunications connect our ever more digitised world. Current developments in the sector will likely continue to facilitate the further digitisation of everything around us. This is why the sector is among the most highly competitive ones. Telecom companies are compelled to continually make significant outlays of capital and innovate, so they can stay afloat and relevant.
With high levels of competition and high capital requirements, the telecoms sector has been, unsurprisingly, also among the most technologically disrupted ones. Basic and core services of telecom carriers, such as voice calls and texting (SMS), have been long replaced by instant messaging and social media platforms that operate via Internet connection. This disruption has exerted substantial impact on telecoms’ revenue streams and it is likely to deepen with the current rollout of 5G connectivity. The 5G-enabled technologies, some of which are yet to emerge, may open up new opportunities for telecoms to improve their revenue streams. This is why industry incumbents are likely to continue to look for synergies and partnerships with other service providers, including young and innovative businesses.
With disruptions challenges come also opportunities. These industry conditions helps to explain why venturing units of telecom carriers have started seeking third parties as limited partners (LPs) to back their fund and deals. There is no dearth of examples of this trend – from SoftBank with its two large Vision Funds through Swisscom, Telstra and Deutsche Telekom. Over the past few years, the sector has notably developed structures and strategies to incorporate third-party LPs. Such practices have successfully withstood the covid-19 pandemic and have been adopted by corporate venturers from other sectors as well. While demand for capital by emerging enterprises is virtually unceasing, the supply of venture capital funding necessitates a broader range of investors see potential for exceptional financial returns.
However, in recent years optimism has somewhat prevailed in established companies in the sector due to the potential of 5G technologies, because these opportunities are the catalyst that may assuage the erosion of profits for telecoms. The key to the potential of 5G lies in higher speeds. The previous major network upgrade, 4G, was rolled out in 2009 and mobile devices reached a peak speed of almost 10 Mbps. This is far behind what 5G is set to deliver – speeds between 10 and 20 Gbps. This would drive network latency from 30ms to about 1ms, making it apt for a wide range of services and devices that require ultra-low latency. Some venture (no pun intended) to say that a massive virtual reality world will be opened thanks to this. It is, however, somewhat early to judge whether such futuristic predictions will indeed materialise.
Consulting firm Deloitte surveyed 437 US-based executives responsible for connectivity and networking technologies at organisations during the last quarter (Q4) of 2020. According to the survey, the pandemic has accelerated the transition to advanced wireless technologies. The surveyed networking executives stated that the pandemic had made their organisations to accelerate investment in wireless networking, focusing particularly on 5G and wifi 6. The latter two are largely seen as “a way to bolster their ability to address current and future disruptions, as well as an opportunity to create new solutions” because 5G and wifi 6 promise significant operational improvements over previous generations of technologies.
The survey also revealed some findings on the behaviour of organisations that are early adopters of such technologies. Such adopters tend to engage with multiple telecom and technology vendors, prefer to purchase best-in-class components and look for help with integration. According to the survey, seven in 10 adopters have said to be open to exploring new relationships.
According to another report by Deloitte titled “2021 Telecommunications industry outlook”, the pandemic has accelerated structural changes in the industry that were beginning to take place before 2020 and covid-19. In 2021, according to the authors of the report, incumbents in telecoms, media and entertainment have three opportunities to recover from the pandemic and to reposition themselves for the future: first, to renew their focus on customers’ needs; second, to converge and remix entertainment experiences through new service offerings; and third, to monetise advanced wireless networks through new products, services and business models.
The customer centricity focus has to be reshaped in terms of the economic situation of consumers. According to the report, “churn rate among over-the-top services in the United States rose from 35% in Q1 2019 to 41% in Q1 2020.” While the liquidity injections and support from governments programmes may have just prevented a massive economic collapse after the pandemic, some patterns of consumption have emerged which suggest that original contents is what drives adoption and cancellations. This implies that a more tailored pricing approach may be warranted in order to retain customers. Providers of content in the US are increasingly offering ad-supported video streaming services (AVOD) as an alternative to paid subscriptions, so that may have just been the answer. Telecoms stay in the middle of all this, having to provide connectivity, so there is much room for partnerships.
As for opportunities to monetise on technological advances, there is, according to the report, no shortage of them, as businesses from other sectors already understand fully the implications of it, as suggested by the aforementioned survey. The report thus suggests there should be particular focus on business customers: “This will likely involve exploring and developing new operating and business models that require greater collaboration with third-party partners to deliver end-to-end enterprise applications that meet the disparate needs of specific industries. Because 5G will likely trigger innovative business models that gain large-scale adoption, telecom providers should strive to help enterprise customers gain first-mover advantages in defining and developing the innovative business models that can disrupt their industries.”
There are many technologies that will naturally draw the attention of telecoms – from image and speech recognition to machine learning to deal with big data to providing hi-speed in-flight internet access. The pattern of corporate venturing investments GCV Analytics has tracked corroborates this.
Sector specialist: Paul Asel, co-founder and managing partner,NGP Capital
Paul Asel is a co-founder and managing partner of NGP Capital, the venture capital firm spun off from Finland-based communications technology manufacturer Nokia, with $1.2bn under management and offices in Silicon Valley, China and Europe.
NGP Capital, an early investor in 12 companies that eventually became unicorns, was founded in 2005. The firm focuses on growth-stage companies to create financial and strategic value.
The fund’s initial ticket size typically ranges between $8m and $12m with the possibility of follow-on investments. Its limited partners include Nokia and its Bell Labs subsidiary, which have created many connected technologies around 5G and the internet of things.
Asel has been investing in startups for more than 25 years, having achieved over 20 successful exits including five IPOs and four mergers and acquisitions (M&A) exceeding $1bn. Before joining NGP Capital, he led technology investments in Southeast Asia at the International Finance Corporation.
Sector specialist: Chris Bartlett, senior vice-president of corporate development, Verizon
Chris Bartlett is senior vice-president of corporate development at US-based telecoms firm Verizon and head of its corporate venturing unit, Verizon Ventures.
Verizon focuses on improving its 5G and related technology following the idea of “5G network built right”, which encompasses areas including mixed reality, the internet of things (IoT), advanced robotics, 3D printing, wearable tech and other emerging technologies.
Verizon Ventures has therefore been targeting developers of 5G-related technologies such as connected devices and hardware, media and entertainment, commerce and advertising, infrastructure and networking, as well as data and analytics.
Bartlett oversees joint ventures, strategic investment activity, acquisitions and divestitures. The unit has invested in more than 70 companies to date across industries and technologies since it was launched in 2000.
He said: “As new ways of working, collaboration and connecting continue to emerge at a rapid pace, the team at Verizon Ventures looks forward to the continued support of entrepreneurs building the 5G future across the globe.”
The sector in charts
For the period between August 2020 and July 2021, we reported 376 venturing rounds involving corporate investors from the telecoms sector. Many of them (129) took place in the US, while 54 were hosted in Japan and 31 in China.
The majority of those commitments (95) went to emerging enterprises from the IT sector (mostly cybersecurity, artificial intelligence, big data and enterprise software) as well as into companies developing other technologies in synergies with telecoms: 66 deals in the services sector (mostly, edtech, logistics and HR tech), 43 in the financial sector (mostly payment technology and alternative lending) and 43 in the consumer sector (mostly e-commerce platforms as well as food and beverages, including food delivery).
The network diagram, illustrating co-investments of telecoms corporates, shows the broad variety of investment interests of the sector’s incumbents. The commitments range from fintech and cryptocurrency exchanges (DeCurret, Digital Payments, Endowus) through digital health and telemedicine (HaloDoc), robotics (Telexistence) and warehousing (Waresix) to network technology and cloud connectivity (Revcomm, Cellwize, Kenmei Technologies) and IT (Weaveworks).
The emerging telecoms businesses in the portfolios of corporate venturers came from wireless connectivity technologies (Tarana Wireless, Welink, CoreTigo), cloud phone and connectivity (SignalWire, Monogoto, Aircall) through mobile networks automation (Cellwize) to satellites and satellite data providers (OneWeb).
On a calendar year-on-year basis, total capital raised in corporate-backed rounds dropped from $40.64bn in 2019 down to $17.97bn in 2020, representing a 56% decrease. The deal count stayed comparatively unchanged, with 272 deals last year compared to the 275 tracked in 2019. However, it seems 2021 may be a record year, as by end of July we had already tracked 250 rounds, worth an estimated total of $28.4bn. As outlined further in this article, the 10 largest investments by corporate venturers from the telecoms sector were not necessarily concentrated in the same industry, as they happened to be diverse investments made by SoftBank, by far the largest corporate investor from this sector.
The leading corporate investors from the telecoms sector in terms of largest number of deals were telecoms and internet company SoftBank, as well as telecoms carriers KDDI and NTT Docomo. The list of telecoms corporates committing capital in the largest rounds was headed also by SoftBank along with Telkomsel, the mobile network subsidiary of Indonesia-headquartered telecommunications operator Telkom Indonesia, and telecoms firm Deutsche Telekom.
The most active corporate venture investors in the emerging telecoms businesses were semiconductor producer Qualcomm, along with Deutsche Telekom and telecoms carrier Verizon.
Overall, corporate investments in emerging telecoms-focused enterprises went down from 25 rounds in 2019 to 20 by the end of 2020, suggesting a 20% decrease. The estimated total dollars in those rounds, however, rose several times over from $1.94bn in 2019 to $5.13bn last year.
Deals
Corporates from the telecoms sector invested in large multi-million-dollar rounds, raised by enterprises from the services, consumer, financial and transport sectors. Five out of the top 10 deals were above the $1bn mark and all top deals featured SoftBank as an investor.
Corporates from the telecoms sector invested in large multi-million-dollar rounds, raised by enterprises from the services, consumer, financial and transport sectors. Five out of the top 10 deals were above the $1bn mark and all top deals featured SoftBank as an investor.
SoftBank’s Vision Fund II supplied $1.7bn in funding for South Korea-based travel and accommodation services provider Yanolja. Founded in 2005, Yanolja initially began as a short-term accommodation services provider before adding hospitality, food, leisure and transportation booking services to its offering, which is accessible through a mobile app. Yanolja will use the capital to invest in its technology and expand its technology-based services into new markets. It intends to build a global travel platform that leverages artificial intelligence technology and big data to provide more automated and personalised services.
SoftBank’s Vision Fund has co-led a $1.7bn funding round for Manbang Group, the China-based trucking services provider also known as Full Truck Alliance. The round was co-led with investment and financial services group Fidelity, Permira’s Growth Opportunities Fund and Sequoia Capital China. It included internet group Tencent, Hillhouse Capital, GGV Capital, Lightspeed China Partners and YF Capital and valued the company at almost $12bn. Manbang operates an app-based service that uses artificial intelligence to match drivers with space in their trucks to customers who require cargo to be transported, taking a cut of the fee and plotting out optimal routes for drivers.
China-based online tutoring platform developer Zuoyebang closed a $1.6bn series E-plus round featuring e-commerce group Alibaba and SoftBank’s Vision Fund 1. Hedge fund manager Tiger Global Management, venture capital firm Sequoia Capital China and private equity fund FountainVest Partners also participated in the round, which came after reports that the company was raising money at a $10bn valuation. Zuoyebang runs an online education platform with 50 million daily active users and 170 million monthly active users, offering services such as live tutorials and homework assistance, the latter through an app with some 300 million answers to education questions. The funding will support the expansion of its categories and the growth of a business-focused offering.
SoftBank’s Vision Fund 2 and internet group Prosus co-led a $1.25bn series J round for India-based food delivery service provider Swiggy at a $5.5bn valuation. The round also featured sovereign wealth fund Qatar Investment Authority as well as Accel, Wellington Management, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Think Capital and Carmignac. The round reportedly included an $800m tranche led by Prosus’ corporate venturing arm, Prosus Ventures, in April 2021. SoftBank provided a reported $450m for that close, which included Falcon Edge, Goldman Sachs, Amansa Capital, Think Capital, Carmignac and Accel. Founded in 2014, Swiggy provides food and grocery delivery services, and its online platform facilitates access to more than 150,000 restaurants and stores located in over 500 Indian cities.
GoPuff, the US-based operator of a personal services app, received $1.15bn from investors including SoftBank’s Vision Fund 1 at an $8.9bn valuation. Investment and financial services group Fidelity Management and Research also took part in the round, as did hedge fund managers Luxor Capital and D1 Capital Partners, investment manager Baillie Gifford and investment firms Eldridge and Reinvent Capital. Founded in 2013, GoPuff runs an online platform that allows users to order products such as food and drink, cleaning, baby and pet products, over-the-counter medications and, in some places, alcohol, for delivery. The company operates out of a network of fulfilment centres and charges a flat $1.95 fee per delivery. It will use the funding to expand geographically, extend its product range, grow its team and bolster its technology.
Antigua and Barbuda-registered cryptocurrency exchange operator FTX Trading completed a $900m series B round, featuring SoftBank, digital currency exchange Coinbase and blockchain payment technology provider Circle. The funding was raised at an $18bn valuation from a consortium of more than 60 investors including quantitative trading firm Hudson River, Paradigm, Sequoia Capital, Thoma Bravo, Ribbit Capital, Insight Partners, Bond, New Enterprise Associates, Third Point and Lightspeed Venture Partners. Incubated by quantitative trading firm Alameda Research, FTX Trading runs FTX.Com, a cryptocurrency exchange with more than 1 million users that handles some $10bn of trading volume a day. The series B proceeds will be channelled into company growth and international expansion in addition to introducing new features and accumulating users.
UK-headquartered financial services app developer Revolut secured $800m in a series E round that included SoftBank’s Vision Fund II. The corporate was joined by hedge fund manager Tiger Global Management and the funding was raised at a $33bn valuation. Revolut initially focused on cross-border financial transfers but has expanded its mobile app-based services to encompass a range of products including bill settlement and splitting, salary advances, consumer cashback, wealth management and a dedicated business offering. The cash has been earmarked for product development in addition to expanding the company’s US operations and entering the Indian market.
US-headquartered e-commerce holding company Perch completed a $775m series A round led by SoftBank’s Vision Fund 2. The round also featured venture capital firm Spark Capital and alternative investment manager Victory Park Capital. It is the largest series A yet to be closed by a US-based company, according to Perch. Founded in November 2019, Perch is acquiring direct-to-consumer e-commerce brands, particularly third-party merchants on online marketplace Amazon, in a bid to build a diversified online retail offering. Several emerging companies are ploughing similar ground but Perch is among the first to raise corporate funding. It has bought more than 70 brands so far and targets category leaders with the potential to scale their businesses.
Reef Technology, a US-based provider of infrastructure for on-demand services, raised $700m from investors including SoftBank’s Vision Fund. Abu Dhabi’s sovereign wealth fund Mubadala Investment Company led the round through its Mubadala Capital fund while financial services firm UBS’s Asset Management unit, venture capital firm Target Global and funds managed by Oaktree Capital Management also took part. Formerly known as ParkJockey, Reef’s core business was a system that allowed users to book parking spaces through a mobile app, but it has since pivoted to concentrate on converting underused physical space into hubs for on-demand services. The company’s app still allows parking lot owners to optimise their space, but also offers space for local logistics hubs for e-commerce delivery, localised mini-healthcare facilities, and cloud kitchens that can support on-demand food deliveries. The round was disclosed alongside the formation of Neighborhood Property Group, an investment vehicle funded by Reef and alternative investment manager Oaktree that will spend $300m on acquiring real estate assets that will support Reef’s business.
SoftBank’s Vision Fund 2 led a $676m series D round for US-headquartered artificial intelligence software developer SambaNova Systems. The round included Intel Capital and GV, corporate venturing subsidiaries for semiconductor and data technology provider Intel and internet and technology group Alphabet respectively, and it reportedly valued the company at $5.1bn. Singaporean state-owned entities Temasek and GIC filled out the round together with Walden International, WRVI and funds and accounts managed by BlackRock. SambaNova is developing systems to run advanced AI applications that are intended to be more powerful that existing central or graphics processing units, for use across data centres, the cloud and edge computing. The company’s co-founders include Kunle Olukotun, who leads Stanford University’s Hydra Chip Multiprocessor (CMP) research project, and Chris Ré, an associate professor in Stanford’s Department of Computer Science.
Top investments in telecoms sector enterprises over the past year
There were other interesting deals in emerging telecoms-focused businesses that received financial backing from corporate investors from the telecoms and other sectors.
Internet technology provider Google, part of Alphabet, invested $4.5bn in Jio Platforms, the digital services spinoff of diversified India-based conglomerate Reliance Industries. Google will take a 7.7% stake in Jio and plans to collaborate with it on the development of technology including an affordable entry-level smartphone. Qualcomm Ventures, the corporate venture capital subsidiary of Qualcomm, provided $97.1m for the spinoff three days earlier. Intel Capital, semiconductor producer Intel’s strategic investment arm, had committed $253m to the company earlier, while social media group Facebook injected $5.7bn in funding in April 2021. At the time, Alphabet had announced plans recently to invest $10bn in India in the next five to seven years. Jio operates a mobile network and broadband service, as well as about a dozen proprietary apps offering functionality such as music, film and television streaming, cloud storage and chat. It aims to expand into online retail, digital payments, education and healthcare, building an ecosystem modelled on that of China-based Alibaba.
Satellite operator Eutelsat Communications invested $550m in UK-headquartered satellite internet technology developer One Web, in return for a stake sized at about 24%. OneWeb is building a 648-satellite constellation intended to provide broadband coverage to remote areas from low orbit. The initial system is expected to be operational by the end of this year and it said Eutelsat’s capital will take it most of the way towards its funding goal. The company had raised a total of $3.4bn from investors including SoftBank’s Vision Fund, conglomerate Bharti Enterprises and satellite services provider Hughes Network Systems before filing for bankruptcy in March 2020. Bharti subsequently joined the UK government to buy OneWeb’s assets for $1bn in July the same year. SoftBank and satellite network operator Hughes Network Systems had invested a combined $400m in it in January 2021. Later in June 2021, OneWeb secured an additional $500m from diversified conglomerate Bharti Enterprises, which exercised a call option from a shareholder’s agreement to increase its stake to 38.6%.
France-based customer support software provider Aircall raised $120m in a series D round backed by Deutsche Telekom Capital Partners (DTCP), the investment firm sponsored by Deutsche Telekom. The round was led by investment bank Goldman Sachs’ Asset Management division and included eFounders, DraperEsprit, NextWorld Capital, Adams Street Partners and Gaia Capital Partners. The cash was secured at a $1bn valuation. Founded in 2014, Aircall provides a cloud-based phone system for call centres, support lines and sales teams which integrates with an enterprise’s existing applications, including customer relationship management platforms Zendesk and Salesforce, to help customer service staff provide better service during phone calls. The company will use the funding to expand globally, opening new European offices in London and Berlin, in addition to investments in North America and the Asia Pacific region and the recruitment of new hires.
US-based wifi technology developer Plume completed a $60m series D round co-led by telecoms firm Charter Communications, consumer electronics manufacturer Belkin, Qualcomm and cable television provider Service Electric Cablevision. The equity round, secured with $25m in debt financing from Silicon Valley Bank and WestRiver Group, included also telecoms firm Shaw Communications and mass media group Liberty Global. Qualcomm and Liberty Global invested through their Qualcomm Ventures and Liberty Global Ventures units. Founded in 2015, Plume has created mesh technology – a type of network designed to provide sustained wifi coverage throughout a house – which uses artificial intelligence to adapt signal strength in real time. The system identifies and blocks malicious activity, offering parental controls including the ability to remove internet access from specific devices. Visitors can be given temporary access to the wifi network and it can integrate with smart connected devices in the home.
Pivotal Commware, a US-based developer of 5G infrastructure technology, has picked up $50m for its series C round featuring the owner of mobile satellite operator Globalstar and financial services group Fidelity. Thermo Companies, the majority-stake owner of Globalstar, participated in the round alongside Fidelity-affiliated investment firm Devonshire Investors. Tracker Capital Management led the round, which was filled out by DIG Investment, Lux Capital and Bill Gates, the co-founder of software producer Microsoft. Pivotal was spun out of intellectual property-focused investment firm Intellectual Ventures in 2017. The company develops communications platforms based on holographic beam forming technology, which enable mobile network providers to deploy 5G networks.
US-based network automation technology provider Cellwize Wireless Technologies secured $32m in a series B round co-led by Intel Capital and Qualcomm Ventures, subsidiaries of semiconductor technology producers Intel and Qualcomm. Samsung Next, Sonae Investment Management (IM), Verizon Ventures and Deutsche Telekom Capital Partners (DTCP) also participated, on behalf of Qualcomm, conglomerate Sonae and telecoms groups Verizon and Deutsche Telekom. The round was filled out by Viola Ventures, Vintage Investment Partners, GreenApple Tech and undisclosed additional investors. Cellwize offers machine learning-driven software that is used to optimise mobile communications transmitters including 5G networks. The capital will be used to bolster its technology and expand its business into adjacent and international markets.
Tarana Wireless, aUS-headquartered provider of wireless networking technology, raised $30m from investors including broadcaster Liberty Latin America and mass media group Liberty Global. Venture capital fund Prime Movers Lab led the round, which also featured undisclosed private and existing investors. The corporates took part through investment vehicles Liberty Latin America Ventures and Liberty Global Ventures. Founded in 2009, Tarana is the creator of a residential broadband internet system known as G1, which offers users gigabit speeds over long ranges through unlicensed parts of the spectrum. It is designed to provide fast and reliable internet to suburban customers. The funding was likely a follow-on from the $24m Tarana secured from satellite and internet services provider EchoStar, Khosla Ventures and 1010 Holdings in February 2021, as part of a round with a $60m target for its close.
US-based satellite communication technology provider Kymeta raised $30m from Hanwha Systems, a smart technology subsidiary of diversified conglomerate Hanwha. Spun off by intellectual property-focused investment firm Intellectual Ventures in 2012, Kymeta provides flat-panel satellite antennas and terminals used for satellite communication, as well as a range of related software and services. The company launched with $12m in a 2012 round featuring mass media company Liberty Global, Lux Capital and Bill Gates, with Intellectual Ventures remaining a shareholder. All three joined Osage University Partners and The Kresage Foundation in a $50m series C round the following year. The funding will be used to extend the company’s market reach, speed up the development of its product offering and ramp up its manufacturing processes. Hanwha Systems will receive a seat on its board of directors in connection with the investment.
SignalWire, a US-based developer of software-defined telecommunications technology, received $30m in a series B round featuring Samsung Next, a subsidiary of consumer electronics manufacturer Samsung. Prosperity7 Ventures led the round, which included Storm Ventures and private investors Jerry Yang and Dean Drako, and which came in the wake of an $11.5m series A round in 2019 led by Storm Ventures and backed by Samsung Next, Sequoia Scouts, AME Cloud Ventures, Yang, Drako, Ron Neuenberger and Erik Yang. Founded in 2017, SignalWire has created a technology platform that can be reprogrammed by enterprise clients to facilitate secure communications through media including telephone calls, internet voice calls and text messages.
Consumer electronics manufacturer Xiaomi led a RMB150m ($22.9m) series A round for China-based cloud video software developer Welink. Video game developer Mihoyo and CMGE also participated in the round, as did Shunwei Capital and Dunhong Capital Management. Welink raised about $1.4m from cloud services provider Kingsoft Cloud and Sea of Stars Capital in October 2019, the latter joining Mihoyo and Binfu Capital in an eight-digit yuan pre-series A round in February 2020. All the existing backers returned two months later for a series A round also in the eight-figure range that included Orient Hontai Capital, a vehicle for cybersecurity software provider Orient Security. WeLink offers a broadband service that uses fixed-wireless technology, which it claims means it can provide far higher broadband speeds while charging less than competitors.
Exits
Corporate venturers from the telecoms sector completed 82 exits between August 2020 and July 2020 – 39 acquisitions, 20 initial public offerings (IPOs), 19 other transactions (including reverse mergers with Spacs), three mergers and one stake sale.
On calendar year-on-year we registered an increase in the number of exits by telecoms corporates last year, which reached 52, up 11% from 47 in 2019. The total estimated capital in those exits stood at $35.65bn, up significantly from the $10.3bn in 2019.
Enterprise software producer Salesforce agreed to acquire Slack, the US-based, publicly listed communication platform developer that counted corporates SoftBank, Alphabet and Comcast as backers, for $27.7bn. The deal consisted of $26.8bn in cash with the rest in Salesforce shares. Slack floated in a direct listing in June 2019 with a $26.00 guidance price valuing it at about $13.1bn, and its shares closed at $43.84 around the time of the acquisition. SoftBank’s Vision Fund owned a 7.3% stake prior to the listing, registering 2.2 million of its 36.6 million shares for trading. It first invested in the company at a $5.1bn valuation and its subsequent stake of about 7% would be valued at just over $1.9bn in the deal. Slack is the creator of an enterprise messaging platform with about 12 million daily active users.
South Korea-based e-commerce company Coupang went public in a $4.55bn IPO on the New York Stock Exchange which was the second-largest by a foreign company since China-based peer Alibaba’s in 2014. The transactions delivered a paper $20bn-plus in profits for SoftBank’s Vision Fund. Similar to US-listed social media network Facebook, Bom Suk Kim founded Coupang after dropping out of Harvard in 2010. A decade on and Coupang’s revenue last year was $12bn, nearly double (up 91%) from 2019’s, and a narrowing loss of $475m for 2020. Coupang offers a diversified e-commerce service that is best known for its rapid delivery capabilities. Because it operates an end-to-end fulfilment service, the company can often deliver orders made in the morning later the same day for no extra charge.
China-headquartered ride hailing service provider Didi Global went public in a $4.44bn IPO on the New York Stock Exchange. The company counted multiple corporates among its backers, including SoftBank, internet company Tencent, e-commerce company Alibaba, insurance firms China Life and Ping An electronics producer Apple, online travel agency Booking Holdings, car rental service eHi and social media company Sina Weibo. Didi increased the number of shares in the offering from 288 million to approximately 317 million American Depositary Shares (ADSs), with four ADSs equalling one class A share. The company priced its shares at the top of the IPO’s $13 to $14 range. The IPO proceeds were used for further investment in its technology and international expansion. Formed after the merger of peers Didi Dache and Kuaidi Dache in 2015 and formerly known as Didi Chuxing, Didi operates anon-demand ride service spanning its home country of China but has presence in Russia, Africa, Latin America, Central Asia and the Asia Pacific regions as well. It also offers food and package delivery in addition to automotive and financial services.
KE Holdings, the China-based online estate agent also known as Beike, went public in a $2.12bn IPO in which internet group Tencent invested $160m. The company counted among its venture backers SoftBank and real estate developer China Vanke. The offering consisted of 106 million American depositary shares (ADSs), each equating to three ordinary shares, issued on the New York Stock Exchange at $20.00 each. The price was above the $17 to $19 range the company had set easlier, valuing it at about $22.6bn. Tencent bought 8 million ADSs while hedge fund manager Hillhouse Capital paid $100m for 5 million ADSs and venture capital firm Sequoia Capital bought 3.5 million for $70m. KE Holdings was formed in 2001 as real estate brokerage Lianjia before adding Beike as an online and offline platform that manages real estate transactions. The combined platform provides access to 260 real estate brokerage brands and had 39 million monthly active users as of June 2020.
Aurora, a US-based self-driving technology developer backed by multiple corporate investors, agreed a reverse merger with special purpose acquisition company Reinvent Technology Partners Y. The combined company would have a $13bn pro forma implied market capitalisation and will take on Reinvent’s listing on the Nasdaq Capital Market, which was secured through an $850m initial public offering in March 2021. The SPAC was sponsored by investment firm Reinvent Capital. The transaction also included a $1bn private investment in public equity (PIPE) financing featuring truck manufacturer Paccar, ride hailing service provider Uber and commercial vehicle producer Volvo Group. The PIPE also included Reinvent Capital, Baillie Gifford, XN, Primecap Management Company, Canada Pension Plan Investment Board, Index Ventures and Sequoia Capital as well as funds and accounts managed by Morgan Stanley’s Counterpoint Global unit and funds and accounts advised by T Rowe Price. Formed in 2017, Aurora is working on an autonomous driving system initially aimed at the trucking market. It expects to launch its first product by 2023 and expand the application of its technology to the last-mile delivery and ride hailing sectors.
Online dating platform Match Group agreed to acquire South Korea-based online communication technology provider Hyperconnect for roughly $1.73bn. The transaction, which involves both cash and stock, gave SoftBank an exit. The latter had committed capital to the company in its $8.6m series A round almost six years ago. Launched in 2014, Hyperconnect runs a one-on-one video and audio chatting app dubbed Azar, which has been downloaded more than 540 million times, as well as Hakuna Live, a group livestreaming app featuring augmented reality avatars. The latter has been downloaded more than 23 million times. The company claims to have reached profitability, after generating more than $200m in revenue during 2020.
Better, the US-based digital mortgage services provider backed by corporates SoftBank, payment operator American Express, insurance company Ping An as well as financial services Citi and Ally Financial, agreed a reverse merger at a $7.7bn post-deal valuation. The company agreed to join forces with SPAC Aurora Acquisition Corp, taking its position on the Nasdaq Capital Market, where it acquired in a $220m IPO. The deal was supported by $1.5bn in PIPE financing from SoftBank’s SB Management subsidiary, Activant Capital and fellow investment firm Novator Capital, Aurora Acquisition Corp’s sponsor. Founded in 2016, Better offers a range of services including commission-less mortgages which are informed by the company’s Tinman data technology platform. It also provides realty services and title and homeowners insurance.
Full Truck Alliance, a China-based trucking services platform developer, raised nearly $1.57bn in an IPO, which gave an exit to internet conglomerates SoftBank, Alphabet, Baidu and Tencent. The IPO was comprised of 82.5 million American Depositary Shares, each representing 20 ordinary shares, issued on the New York Stock Exchange. The shares were priced at the top of its $17 to $19 range. The price subsequently rose above $20 per share, giving the company a market capitalisation of over $21bn. Full Truck Alliance was formed in 2017 when freight booking services Huochebang and Yunmanman merged to form Full Truck Alliance, also known as Manbang Group. The company runs a digital freight platform that provides shippers with access to a network of some 2.8 million trucks, employing artificial intelligence to increase efficiency. It made a $532m net loss in 2020 from just over $395m in revenue. The IPO proceeds will be used for expanding its services and strengthening infrastructure development and technology.
Customer engagement software developer Sinch agreed to acquire Australia-based mobile messaging platform developer MessageMedia in a $1.3bn transaction facilitating an exit for SoftBank. The deal consisted of $1.1bn in cash, with the remainder to be supplied in the form of 1.1 million new Sinch shares. It followed reports publicly listed Sinch had raised $1.1bn from investors including SoftBank and Singaporean state-owned investment firm Temasek. MessageMedia has built an online messaging platform that helps small and medium-sized businesses communicate and interact with their customers over mobile. It processes more than 5 billion mobile messages each year and is used by more than 60,000 customers.
Global Corporate Venturing reported six exits from emerging telecoms-related enterprises that involved a corporate investor.
Satellogic, a Uruguay-headquartered satellite imagery analytics provider backed by internet group Tencent, agreed a reverse takeover with special purpose acquisition company CF Acquisition Corp V. The merged entity will take the Nasdaq Capital Market listing held by CF Acquisition Corp V since it went public in a $288m IPO in January 2021, and will have a pro forma enterprise valuation of $850m. SoftBank’s Latin America-focused SBLA Advisers Corp subsidiary co-led a $100m private investment in public equity financing deal with institutional investors including Cantor Fitzgerald, which sponsors CF Acquisition Corp V, supporting the transaction. Founded in 2010, Satellogic has developed a low-Earth-orbit satellite constellation that sends high-resolution geospatial images intended to help public and enterprise users analyse geographic data.
Connectivity systems provider ComSovereign agreed to acquire US-based mobile infrastructure technology developer Fastback Networks in a $14m deal enabling networking technology producer Juniper Networks to exit. The transaction will consist of cash as well as debentures such as securities that can be exchanged for ComSovereign shares. Founded in 2010, Fastback builds radio transmission systems that enable telecommunications networks to offer wireless connectivity for high-speed applications such as 5G while retaining signal strength in areas with poor reception.
Ireland-based telecommunications software and services provider Openet was acquired by US-based media and communications consultancy Amdocs for an undisclosed amount, enabling steel producer Nippon Steel to exit. Founded in 1999, Openet provides charging, network policy and data management software for the telecoms industry. Its technology will be folded into Amdocs’ service network to extend its capabilities in areas such as 5G, edge computing and the internet of things.
Agile Content paid an undisclosed amount to acquire Spain-based wifi hotspot provider Fon, allowing Qualcomm, internet technology provider Google and Deutsche Telekom to exit. Fon had raised a reported total of approximately $72m from investors including Qualcomm subsidiary Qualcomm Ventures, Deutsche Telekom, Google, Index Partners, Coral Capital and Atomico as of its last round, when it secured $14m in 2014.
Dynamic glass producer View purchased US-based smart building software developer IoTium for an undisclosed amount, allowing networking technology provider Juniper Networks and consumer and industrial technology manufacturer Honeywell to exit. IoTium raised closed a $4.8m series A round in 2017 co-led by industrial technology producer General Electric’s now defunct GE Ventures unit and VC firm March Capital Partners with backing from Juniper Networks, OpenSource Ventures and Pankaj Patel. It took its total funding to $22m in a $13.6m series B in 2018 led by March Capital Partners and backed by GE Ventures, Juniper subsidiary Juniper Ventures, Honeywell unit Honeywell Ventures, JC2 Ventures and Hanna Ventures.
Funds
For the period between August 2020 and July 2021, corporate venturers and funds investing in the telecoms sector secured over $31.4bn in capital via nine funding initiatives, which included seven VC funds, one accelerator and one CVC unit. The dollar estimate, however, is somewhat deceiving as it is due to the effect of a $30bn second Vision Fund described below which targets telecoms, among other things.
On a calendar year-to-year basis, the number of funding initiatives in the telecoms sector went down slightly from 10 in 2019 to seven last year but that figure was significantly down from the peaks of 24-27 such initiative reported in 2014-16. The total estimated capital for last year stood at $881m, likely because of the effect of the covid-19 pandemic shock.
SoftBank increased the size of its Vision Fund 2 from $10bn to $30bn. The company’s original Vision Fund closed at $98.6bn in 2017 with contributions from corporate limited partners and sovereign wealth funds, but it had far been unable to secure backing for its successor, instead committing the capital itself. The first Vision Fund booked a $16.8bn net loss for 2019 due to bankruptcies for portfolio companies OneWeb and Brandless, the failure of workspace provider WeWork to successfully float and lacklustre share performance for others such as ride hailing service Uber. However, the coronavirus pandemic has caused tech stocks in several industries to skyrocket while also driving the pre-IPO funding market, leading to a considerable turnaround in the corporate’s fortunes. SoftBank’s latest full-year results were published and revealed the values of its holdings in several portfolio companies have increased sharply, giving the Vision Funds a $37bn paper profit.
Telkom Indonesia provided $500m for a technology investment fund to be run by its corporate venturing subsidiary, MDI Ventures. MDI Ventures was originally founded in 2014 and officially launched two years later with $100m in capital to be deployed over a four-year period. The unit invests in digital advertising and payment technology, cloud computing and big data, mobile apps and e-commerce, the internet of things and technologies that can influence the future of communications, offering access to Telkom companies along with capital. The new fund will provide $5m to $30m for late-stage companies located in Indonesia. They will get the chance to collaborate not only with Telkom but with other state-owned enterprises (SOEs), which will get the chance to leverage their technologies to build a digital ecosystem.
France-based mobile network operator Orange has spun off its corporate venturing arm, Orange Ventures, and hired Mathieu de La Rochefoucauld as managing partner of the now independent firm. Read more about his recruitment in the People section. Orange committed an additional €350m ($426m) to Orange Ventures, which since September 2019 has been run by president and managing partner Jérôme Berger. Orange Ventures currently invests in connectivity, cybersecurity, digital enterprise, financial services and e-health technology, as well as in new territories the group is exploring, such as Africa. Its portfolio companies include Monzo, Actility, Raisin and WeaveWorks.
V-Capital, the corporate venture capital arm of China-based cigarette packaging materials producer Huaxi Holding, reached a RMB1.5bn ($235m) first close for a fund. Formed in 2015, V-Capital has been conducting venture capital and mergers and transactions deals, investing alongside local governments and fund of funds. Local government-backed funds and corporations have committed capital as limited partners, as have new and returning other investors. The vehicle will target developers of telecommunications, healthcare, cultural services, semiconductors, IT, smart manufacturing and new energy technologies across China. V-Capital now has about $3bn under management, and its shareholders include state-owned enterprise group Guolian Group’s Industrial Investment vehicle, Anhui JiongKong Industrial Development Fund, Wuxi HuiKai Investment Management and Federal Reserve Innovation.
Legend Star, a corporate venturing vehicle for China-headquartered conglomerate Legend Holdings, closed its fourth renminbi-denominated fund at RMB800m ($118m). Legend Holdings provided 25% of the capital for the fund, and Legend Star said 90% of the limited partners in its third fund returned for the latest vehicle. The unit’s previous fund closed at RMB800m in February 2018 and DealStreetAsia identified online lender CreditEase, Chinese Academy of Sciences Holdings, VMS Investment and Hony Horizon Fund as LPs. Formed in 2008, Legend Star invests in early-stage developers of innovative technology in addition to those in sectors such as healthcare and the technology, media and telecommunications (TMT) space. The unit’s fourth fund will specifically seek out deals for 5G and artificial intelligence-related technologies, innovative medical technology such as biomedicines and cutting-edge technology in the semiconductor and aerospace area.
Italy-based venture capital firm United Ventures has received €100m ($117m) of capital commitments for UV T-Growth, a growth-stage investment fund anchored by telecommunications firm Telecom Italia (TIM). The fund’s target has been increased to €180m, from the €150m reported at the launch of the fund in August 2020. United Ventures expects to reach the target for its close by 2022. UV T-Growth will invest in late-stage companies located in Europe and will focus on innovative technologies such as 5G, artificial intelligence, cybersecurity, the internet of things and cloud services. United Ventures will use the vehicle to invest an average of €10m to €15m per round. TIM’s corporate venturing subsidiary, TIM Ventures, has committed about $70m to the vehicle through its role as anchor investor.
China-headquartered telecommunications equipment provider Huawei launched a Singapore-based deep tech accelerator called Huawei Spark to target the Asia Pacific region. Huawei Spark is a partnership with government agencies Enterprise Singapore and Startup SG and its target areas include 5G, machine learning, the internet of things and edge computing technology. The corporate’s Huawei Cloud subsidiary will provide participants in the accelerator with up to $100,000 in development funding and up to $125,000 in cloud credits. An inaugural cohort of 15 startups will be shortlisted. Two winners will then be entered into global startup contest Slingshot 2020.
LightShed Partners, a US-based boutique research firm founded by media analyst Rich Greenfield in 2019, has set up a corporate venturing fund. LightShed Ventures is in the process of raising $75m to invest in seed and series A rounds across technology, media and telecom sectors. Alongside Greenfield in the fund are Walter Piecyk, Brandon Ross and Jamie Seltzer, who previously worked at venture capital firm Waverly Capital. Greenfield told Barron’s: “I write about disruption. This will make our research even stronger. We have been looking across both public and private companies for a long time.”
Mobile network operator Orange committed an undisclosed amount of capital to France-headquartered private equity firm LBO France’s Digital Health 2 (DH2) fund through its Orange Digital Investment vehicle. DH2 has a €200m ($238m) target for its close and is tasked with investing in small-to-medium sized businesses in the digital health sector. Its target areas are France and the rest of Western Europe. Orange’s contribution was made as a strategic investment connected to Enovacom, the business-to-business digital health unit overseen by its Orange Business Services subsidiary. The firms will also explore opportunities for synergy. DG2’s portfolio so far includes intelligent insole developer FeetMe, Africa-focused medicine distribution technology producer Meditect, medical imaging system developer QuantifiCare and pathology software provider Tribvn Healthcare.
Universities
By the end of 2020, we had registered nine rounds raised by university spinouts developing telecoms-related technologies and three during 2021 so far. The level of estimated total capital deployed in 2020 stood at $201m, up from $81m in 2019.
Federated Wireless, a US-based provider of phone spectrum-sharing technology based on Virginia Tech research, has extended its series C round to $64.7m following a $13.7m investment by commercialisation firm Allied Minds and Pennant Investors. Both took part in the initial $51m tranche in September 2019, participating alongside Singaporean sovereign wealth fund GIC and telecoms infrastructure providers SBA Communications and American Tower. Founded in 2012, Federated Wireless offers shared spectrum technologies which enable mobile network operators to more efficiently allocate specific US radio frequencies intended for small enterprise communication networks. The funding will support a recently launched wireless network-as-a-service offering, targeting enterprises through an integration with cloud computing platforms Amazon Web Services and Microsoft Azure.
Lumenisity, a UK-based fibre optic and cabling supplier aligned to University of Southampton, closed a £7.5m ($9.7m) round led by BGF and featuring Parkwalk Advisors, the fund manager owned by commercialisation firm IP Group. The cash will go to building a new manufacturing and testing plant. Lumensity produces fibre optic cables using a hollow core technology which helps light propagate more effectively.
AccelerComm, a UK-based wireless communications technology spinout of University of Southampton, secured £5.8m ($7.4m) in a series A round involving commercialisation firm IP Group. The round was led by IQ Capital and was also backed by Bloc Ventures. AccelerComm has devised a wireless communications technology to reduce the impact of latency by addressing errors arising from interference and poor signal strength. The spinout was founded by Rob Maunder, a professor of electronics and computer science at University of Southampton. AccelerComm will use the funding to expand its team in support of technology development and growth both in the US and internationally.
People
We reported many people moves in the corporate venturing space of the telecoms sector in the past 12 months and many of them involved rotation at SoftBank and its Vision Fund.
Katsunori Sago, chief strategy officer for SoftBank, will resign at the end of March 2021. Sago had joined SoftBank in 2018 after three years as chief investment officer of Japan Post Bank, a subsidiary of postal service Japan Post. He had previously been an investment banker at Goldman Sachs in Japan. Sago “played a crucial part in expanding [SoftBank Group’s] potential as an investment company,’ Son said in a statement used by Reuters which did not provide a reason for the departure.” The Financial Times stated that Sago’s exit marks the second time a high-profile executive has quit after being recruited as potential heir to SoftBank CEO Masayoshi Son, following the 2016 departure of former Google executive Nikesh Arora. The move came after Son, who is 63, recently said that he planned to stay as the leader of the group beyond the age of 70.
Corporate venturers Rajeev Misra and Marcelo Claure left SoftBank’s board of directors. Misra, head of the company’s Vision Fund, and Claure, the chief operating officer of SoftBank who also oversees its $5bn Latin America fund, will be joined by SoftBank chief strategy officer Katsunori Sago and Yasir O. Al-Rumayyan, a representative of Saudi Arabia’s Public Investment Fund (PIF). SoftBank’s core business has traditionally been in telecoms, but it has increasingly put more resources into its corporate venturing activities in recent years, putting some $33bn into the $98.6bn Vision Fund alongside $45bn from PIF. The moves were intended to increase the proportion of external directors on the board and follows the appointment of independent directors Lip-Bu Tan and Yuko Kawamoto in June 2020. They reduce the number of board members from 13 to nine. The company had removed Sago, Claure and Misra to improve oversight at the group.
Ruwan Weerasekera departed from his chief operating officer (COO) role at SoftBank Investment Advisers (SBIA), which oversees SoftBank’s Vision Funds. Softbank confirmed the departure of Weerasekera, who was also a managing partner for Vision Fund I and II. He joined SBIA in late 2017 after more than two decades at investment banking group UBS in several senior roles. Neil Hadley, SBIA chief executive Rajeev Misra’s chief of staff, assumed the COO position along with his existing responsibilities. Penny Anne Bodle, a partner and global head of investor relations, also left SBIA.
SBIA operating partner Avi Golan moved to facial recognition technology producer AnyVision as its new CEO, following the departure of chief risk officer Maria Khan in September 2020. Khan since joined Eight Roads, a venture capital arm of investment and financial services group Fidelity, as head of risk and compliance.
Private equity firm Gores Group meanwhile brought SBIA partners Ted Fike and Justin Wilson on board as senior managing directors. They will focus on special purpose acquisitions companies. Fike’s investments included pet-sitting service Wag, before SoftBank divested its stake in the company in December 2019 at a loss, while Wilson led investments in Brandless, the e-commerce platform that ceased operations in February 2020.
Another Vision Fund member, Carolina Brochado, quit SBIA soon after she was made a partner in March 2020. Her move came in the wake of multiple executive exits including founding partner David Thévenon and managing directors Praveen Akkiraju and Michael Ronen.
Daisy Cai, formerly partner at SoftBank’s Vision Fund, has joined venture capital firm B Capital Group to open its China office. B Capital is part-funded and owned by management consultants Boston consulting Group (BCG). In April 2020, Cai accepted a partner position at the Vision Fund. Cai had previously been a founding partner at Gaocheng Capital, a growth-stage private equity firm backed by hedge fund manager Hillhouse Capital, and also had been a managing partner for China-based internet group Baidu, working on both early-stage fund Baidu Ventures and late-stage vehicle Baidu Capital, having joined the company in 2016.
Priya Saiprasad, a former founding principal at M12, the corporate venturing arm of US-based software producer Microsoft, rejoined her former boss, Nagraj Kashyap, at SoftBank Investment Advisers. Kashyap, a GCV Powerlist 2020 award winner, joined SoftBank earlier as a managing partner for its two Vision Funds. Saiprasad had left M12 in mid-2019 for a venture investor role at venture capital firm Mayfield Fund. Saiprasad was a founding member of M12 in September 2016 and oversaw investments in business-to-business software providers, including Workboard, Go1 and Skedulo.
Colin Fan left his managing partner role at SBIA. Fan had joined SBIA in 2017 after almost two decades at financial services firm Deutsche Bank in various executive roles. He managed financial technology deals on behalf of SoftBank’s Vision Funds, overseeing deals for portfolio companies including Fair, Flexport, Greensill, Cheduoduo (Guazi) and Zume. Fan will take up an adviser position at SBIA while his previous duties will be assumed by Munish Varma, a UK-based SBIA managing partner who will relocate to the United States.
Jeffrey Housenbold, managing partner at SoftBank’s Vision Fund, stepped down in July 2021. Housenbold, a former GCV Rising Star award winner, joined SoftBank almost four years ago after it raised nearly $100bn for its first Vision Fund. His deals for the fund include DoorDash, OpenDoor, Compass, Rappi, Memphis Meats, Ordermark, Alto Pharmacy, Plenty, Whoop, Globality, Clutter, Get Your Guide, Katerra, Brandless, Wag, Heed and InMobi, according to his LinkedIn profile. Housenbold earned an MBA from Harvard Business School, where he was a dean’s fellow, and his undergraduate degrees in economics and business administration from Carnegie Mellon University, where he was an Andrew Carnegie presidential scholar who graduated with high honours. Housenbold ran online photo-printing service Shutterfly for more than a decade.
Telkomsel Mitra Inovasi (TMI), the corporate venturing arm of Telkomsel, named Marlin Siahaan chief executive. Siahaan replaces Andi Kristianto, who had been CEO of TMI since mid-2019 having been with Telkomsel for almost two decades in several senior positions. Before joining TMI, Siahaan had been Indonesia-based country manager for Waze, an interactive navigation app owned by Google, for three and a half years from 2018, after spending a similar amount of time before that as general manager of digital advertising at Telkomsel. Her new job entails Siahaan identifying strategic collaboration opportunities between TMI-backed entrepreneurs and Telkomsel in areas including the internet of things and cybersecurity. Siahaan intends to help TMI raise a second vehicle that will maintain its early stage-focus but raise its $1m-to-$2m ticket size to up to $4m per deal. Its first fund has backed 15 companies since it was formed in 2019 with $40m of capital.
France-based mobile network operator Orange spun off its corporate venturing arm, Orange Ventures, and hired Mathieu de La Rochefoucauld as managing partner of the now independent firm. Orange committed an additional €350m ($426m) to Orange Ventures, which since September 2019 has been run by president and managing partner Jérôme Berger. The recruitment of de La Rochefoucauld as managing partner creates potential for Orange Ventures to develop a private equity model. De La Rochefoucauld started at French bank Société Générale’s venture capital unit in 2000 before the asset management group’s merger to form Amundi. He had been an associate director within its private equity funds group. The move followed similar efforts by other telecommunications-focused corporate venturing units, including those operated by Swisscom, Telstra, Deutsche Telekom and, most notably, SoftBank, to attract third-party capital.
SoftBank Ventures Asia, the South Korea-based corporate venturing subsidiary of SoftBank, hired Tony Young-Suc Lyu as a venture partner. Lyu co-founded cryptocurrency exchange Korbit in 2013 as its chief executive. The company received backing from SoftBank Ventures Asia’s predecessor, SoftBank Ventures Korea, in a $3m series A round in 2014, and was eventually acquired by video game publisher Nexon in 2017. SoftBank Ventures Asia runs 17 funds with $1bn of assets under management and has more than 250 portfolio companies. It concentrates on early to growth-stage artificial intelligence, internet-of-things and robotics deals in regions including China, Israel, Japan, South Korea, Southeast Asia, the United States and the European Union. SoftBank Ventures Asia said in a statement on LinkedIn: “We are fortunate to welcome Tony, one of the most accomplished entrepreneurs in the industry, and a perfect complement to the team.”
Kenyu (Ken) Sobajima, senior director of investments at KDDI and its Open Innovation Fund, left to set up Tomorrow Access. Sobajima, a GCV Emerging Leaders 2021 award winner, had worked at KDDI for 25 years and for its corporate venturing unit since 2014. Following his relocation from Japan to the US in 2015, his deals had included Swift Navigation, Mojo Vision, Secret Double Octopus, Mad Street Den, Allganize, Jibo, August Home, Monohm, Ossia, Pogoseat, Issuu, Edmodo and VentureBeat. KDDI Open Innovation Fund is a corporate venture capital (CVC) vehicle for Japan-headquartered telecommunications firm KDDI that is jointly run by venture capital firm Global Brain (GB). KDDI Open Innovation Fund was launched in 2012 with two initial capital of $50m each, and it expanded again in April 2018 with a third fund of roughly $200m.
Takayuki Inagawa, CEO of NTT Docomo Ventures, the corporate venture capital (CVC) arm of Japan-based telecommunication firm NTT Group’s mobile network subsidiary, NTT Docomo, was promoted to general manager and head of innovation management department. He said: “I am excited to join Docomo headquarters team. I will leave VC industry finally but still continue working on open innovation activities.” Since 2018, Inagawa, a GCV Powerlist 2020 award winner, has overseen the development of innovative mobile communication services and products, partnering and collaborating with emerging companies that develop information and communications technology, big data, cloud and authentication security across all stages.
LLYC, a Spain-based communications and public affairs consulting firm, hired Francisco Sánchez Rivas with the intention of ramping up its corporate venturing and merger and acquisitions strategy. Rivas will sit on the firm’s board of directors while also remaining on the board of multiple other technology and media companies. He has spent 25 years in investment banking, including a spell as CEO of wealth management firm Edmond de Rothchild’s Spain and Portugal-focused investment bank. Rivas later established boutique middle-market banking firm Zechman Capital, and was also once corporate finance director at accountancy firm Deloitte. LLYC is looking to grow its strategic acquisitions having most recently bought Colombia-based innovation consultancy Adaptative.
Jose Antonio Pascual del Valle joined Chile-based retailer Cencosud as head of its corporate venture capital subsidiary, Cencosud Ventures. Del Valle will lead Cencosud Ventures after almost five years at Spain-headquartered telecoms firm Telefónica’s Wayra corporate venturing unit. He had previously been Wayra’s head of scouting and investments in Latin America at Wayra and a director or observer in Wayra Chile’s portfolio. Portfolio companies where del Valle had held board roles include SimpliRoute, Poliglota, IpsumApp, Recorrido, U-Planner, WebdoxCLM, Rocketpin, Autofact, Zapping, ComunidadFeliz, Cloner, OmnixCorp, GoQuantum and WivoAnalytics.
Verizon Ventures, the corporate venturing arm of Verizon, appointed Tom Arnost as a principal. Arnost began working in the role and is responsible for executing and managing strategic investments on behalf of the corporate. He had previously been part of Verizon’s corporate development team, where he was involved in merger and acquisition deals and strategic planning projects. Before joining Verizon, Arnost was an investment banking associate at investment bank Houlihan Lokey between 2016 and 2019. Arnost had also been a senior accountant at accounting firm Raffa, PC, which has since been merged with accounting and advisory services firm Marcum, assisting companies with a variety of accounting, consulting and business advisory services.
Lance Matthews was promoted to managing director of growth equity at Deutsche Telekom Capital Partners (DTCP), the venture capital firm sponsored by Germany-headquartered telecoms firm Deutsche Telekom. Based in San Francisco, California, Matthews had been a principal at the firm since the start of 2020, having originally joined the investment team as an associate in November 2016. Matthews’ most recent deals have included Arctic Wolf, Streetlight Data, Innovid, SuperAnnotate, Heap, Anomali, Fastly and Dynamic Signal.
