Our deals table for August 2023 is out, meaning now you can browse the whole month of August to see which startups raised funding rounds involving corporate investors, in which sectors, and with what other backers.
While the summer months tend to be slightly quieter on the deals front, we still saw a total of 299 deals which included a corporate investor taking place. That is up slightly from the 287 deals we recorded in July.
We hope you find it useful to see – on one page – who is actively investing, at what stage and where they are putting their money. Investing is a long game, so this gives a valuable insight into what corporates see as having strategic value, and what technologies, in which sectors, might play a part in shaping our future.
It’s also an eye opener to see what’s not being invested in. Certain areas that might have seen a boom in previous years could be tailing off – and while we can’t predict what will flop in the future, it’s definitely interesting to see these things move month by month.
AI boom still boosting IT sector deals
The most popular sector in August by a fair margin was information technology. An impressive 65 funding rounds were raised by startups in the IT sector, with the next most popular sectors being healthcare (49), financial (44) and industrial (40).
The majority of the IT rounds were raised by companies that focused on artificial intelligence and enterprise software. This shows us that the AI boom is still a big deal and corporates are still fronting some big money bets.
Many of the same corporate investors crop up in these AI deals: Alphabet, Google’s parent company, was connected to four AI-related funding rounds in August alone. Nvidia took part in three, and Samsung took part in two. Investment in generative AI still seems dominated by big tech companies, but increasingly we are also seeing banks investing in this area. Citigroup, for example, backed the series C round of data exploration platform Virtualitics, and BBVA’s Propel Ventures backed the seed round of AI platform Parcha.
Pharmaceuticals dominate
With healthcare being the second most popular sector in August, 29 of the 40 deals were in the area of pharmaceuticals. A fairly big jump from the previous month, which only saw 17 pharmaceutical deals. Many of these investments are by large pharmaceuticals companies like Eli Lilly, Novo Nordisk and Johnson & Johnson, but we are also seeing an increasing number of investors from outside the traditional pharma sector, including Nvidia and Bertelsmann Investments, which has recently been building up its healthcare portfolio.
Corporates are getting involved earlier
A majority of the corporate-backed funding rounds (at least the ones that made their round information public) were at the seed and series A stage.
This might surprise those who still think corporates mainly invest at the later, series C-stage onwards, once startups have become more established. We have seen that changing, however, over the past two years – and the August deal data is another sign of that trend.
Especially as valuations became inflated over the past few years, corporations have migrated to finding better-value deals at the earlier stages of a company’s development. It may also show that CVC in general is maturing. As corporate investors become more experienced, they should get better at spotting potential and become more confident in making those ‘riskier’ bets.
What’s falling out of favour?
While looking at the popular sectors is one thing, it’s also telling to take a look at what’s not represented. There was a notable absence of funding rounds by oil and gas-related startups in August, and there had been none in July or June either. Although oil and gas companies like BP, Chevron and Saudi Aramco made some investments in this period, these were in alternative energy solutions such as electrolysers for the production of green hydrogen or the storage of industrial waste heat.
Sports and gambling was another sector with no investment from June to August, and 3D printing was another area with with low activity— none in August, and a single deal each in July and June.
Sports and gambling may be less surprising — corporates tend to steer clear of areas like gambling for risk of negative brand associations. In the case of 3D printing it may be a sign that this sector is still struggling to gain traction.
For your own analysis of trends, have a look at the full data here.
