Martin Haemmig, adjunct professor at the Center for Innovation & Technology Management (Cetim) in Germany and the Netherlands, and Kaloyan Andonov, a reporter at Global Corporate Venturing and head of its GCV Analytics platform, presented data insights on venturing activities from the pandemic period in the first in-person GCV Symposium held since the covid-19 public health crisis began.
Andonov commented that there are now more corporate venturers investing in minority-stake deals than before, with more than 2,000 corporations having conducted at least one deal in the past two years. He also pointed out about a fifth to a quarter of all active corporates appear to be first-time investors.
Despite covid, the upward trend in the total number of corporate-backed deals and the total estimated dollars in them as seen in pre-pandemic years have held up, with new higher highs being registered almost every quarter since March 2020, Andonov added.
However, he stressed that as more corporates participate in venture capital investments, there may be more competition to get into the best syndicates and in the best deals, which poses a risk for corporates as a class of investors. If they drop out of the venture investing game or are perceived as inconsistent investors, it may tarnish their reputation among other co-investors, which is undesirable.
Haemmig had analysed 2020-2021 data on the overall VC space and shared findings with the audience. He spoke of the upward trend in VC deals activity over the past decade, which has reached new highs in terms of both deal count and deal volume, highlighting the record levels of megadeals of multibillion-dollar valuations and record amounts of money raised in top early-stage rounds.
He also noted while corporate participation in VC deals has increased considerably, there have been other entrants to the scene, whom he referred to as “tourists” – hedge funds, private equity funds and other asset managers – that are on the lookout for yield and whose participation has increased even more than that of corporates.
Haemmig additionally touched on the evolution of exits for VC investors and noted that, while the number of exits has substantially increased in both volume and dollar value terms, there are some interesting patterns emerging from the data – the dollar value of initial public offerings has skyrocketed, in part thanks to the rise of Spacs (special-purpose acquisition companies), while mergers and acquisitions appear to be taking a breather.
Haemmig found that acquisitions and buyouts tend to occur earlier now, as measured from the time of a first VC-backed deal – some even after the seed stage – while the number of years leading up to an IPO has remained relatively stable over time.
He posed some open-ended questions to the audience, based on his data finding in terms of the impact of mega-rounds for entrepreneurs, the potential impact of hedge funds and other asset managers in VC and the role of corporate venture investors on this changing scene.
