Compared with January 2016 figures, which were particularly robust, deal count and investment amounts fell last month, but both data points were higher than the numbers recorded in December 2016.
The number of CVC-backed deals slipped compared with last year’s figures, at 180 rounds versus 192 in the first month of last year.
Investment value fell by about 42% to $5.85bn in January 2017, versus $10.02bn reported in the first month of 2016, which at first glance might seem a steep drop, but most deals in the past month were of undisclosed size, and last year was particularly robust for corporate venturing. What is more, no companies raised more than $1bn in January within a single round.
The US came first in the number of deals struck, hosting 91 rounds, or half the dealflow, while China was second at 20 rounds and the UK third with 14.
Both the deal count and investment amount were higher than they were the previous month, when only 159 rounds were reported, representing $5.44bn in capital, though a rebound is typical after the usual slowdown during the winter holiday season.
The leading corporate investors by number of deals were China-based digital health technology developer iCarbonX and internet companies Tencent and Alphabet.
ICarbonX directed almost $400m in funding to startups from its Digital Life Alliance initiative, which links biotech, health networking, sequencing and artificial intelligence technology companies to develop personalised data that helps individuals monitor their health.
In terms of involvement in the largest registered rounds, advertising agency Focus Media, Tencent and insurance provider Arch Capital Group topped the ranking.
Deals
Emerging businesses from the health, IT, media and financial services sectors secured the highest number of deals involving corporate investors, GCV Analytics data shows. The top deals by round size were not concentrated in any particular sector. Rather, they ran the gamut, ranging from transport and logistics to e-commerce and financial services.
The most active corporate investors were in the financial services, IT, health and media sectors, as illustrated on the heatmap.
Premia Holdings, a Bermuda-registered property and casualty insurance and reinsurance startup, raised $510m from investors that included an affiliate of insurance and reinsurance provider Arch Capital Group. Premia provides specialist property and casualty runoff insurance services to businesses around the world, helping them to ensure their companies and portfolios are protected against claims.
Uxin, a China-based used-vehicle marketplace backed by internet company Baidu, raised $500m in new funding, China Money Network reported. The round was co-led by private equity group TPG, multifamily office Jeneration Capital and investment firm China Vision Capital. According to the Asian Venture Capital Journal, the round included a fund owned by Focus Media. Uxin operates an online platform dubbed Youxinpai, where consumers buy and sell used vehicles, as well as a business-to-business vehicle marketplace called Uxin Pai.
Property developer Sunac China Holdings agreed to pay RMB2.6bn ($375m) for a 6.25% stake in online real estate listings platform Lianjia. Founded in 2001 and also known as Homelink, Lianjia initially operated as a straightforward real estate agency before building an extensive real estate listings and services platform online. The company claims to be China’s largest real estate broker, and has more than 6,000 branches in more than 25 cities.
China-based logistics services provider Hive Box received RMB2.5bn in a series A round led by alternative asset management firm CDH Investments. The round also featured state-owned financial institution China Development Bank as well as Eastern Bell Venture Capital, Yiyao Capital and existing unnamed shareholders. Hive Box was set up in 2015 by logistics facilities provider GLP and courier services companies SF Express, STO Express, ZTO Express and Yunda Express. The startup operates 40,000 self-service drop-off and pick-up parcel stations spanning 74 cities in China.
Easy Life Financial Services Holding Group, a financial services spinout of aviation-focused conglomerate HNA Group, secured RMB1.9bn in series B-plus funding from a host of investors, including H Capital, CapitaLand, Pacific Securities, Shandong Bihai Tourism Development Fund, Jining Cultural Tourism Development Fund and Chongqing Aviation Investment and Tourism Development Fund. Founded in January 2016, Easy Life provides a range of payment services catering to the tourism industry, including foreign currency exchange, traveller’s cheques, tax rebates and prepaid debit cards for international use.
China-based bicycle-sharing startup Mobike raised $215m in a series D round co-led by internet company Tencent and private equity firm Warburg Pincus. Online travel agency Ctrip and hospitality group Huazhu Hotels also took part in the round, as did private equity firm TPG Capital, hedge fund Hillhouse Capital and venture capital firm Sequoia Capital. Mobike runs a bicycle-sharing service that works along similar lines to ride-hailing platforms like Uber or Didi Chuxing, allowing users to book bikes through an app.
US-based e-commerce app operator Letgo received $175m from investors including media and e-commerce group Naspers. The latter was joined by venture capital firms Accel, Insight Venture Partners and New Enterprise Associates, and commerce-focused VC fund 14W. Founded at the start of 2015, Letgo runs a mobile marketplace that has been downloaded more than 45 million times and has roughly 20 million monthly active users.
US-based electric bus manufacturer Proterra secured $140m from investors including car maker General Motors and energy companies Exelon and Edison Energy. General Motors and Exelon invested through respective subsidiaries GM Ventures and Constellation Technology Ventures but the round was led by an undisclosed participant that provided $40m. Proterra produces electric buses and has sold more more than 300 of them to 35 commercial, municipal and university transit agencies in North America.
US-based home security technology developer Ring raised $109m in debt and equity financing from investors including mobile semiconductor producer Qualcomm, insurance firm American Family and real estate firm JF Shea. Qualcomm and JF Shea invested via their respective venturing subsidiaries – Qualcomm Ventures and Shea Ventures – while financial services firm Silicon Valley Bank supplied the debt portion. Ring’s core product is a video-based doorbell that allows residents to see who is at their door before answering.
BPIfrance, the public investment bank of France, and naval defence company DCNS joined forces to establish marine renewable energy company DCNS Energies with €100m ($107m) in capital. The funding round was joined by Technip Group, an engineering firm focused on the energy sector, and BNP Paribas Développement, an investment subsidiary of the financial services firm. DCNS Energies will be responsible for the industrial and commercial development of three marine renewable energy technologies – tidal turbine power, ocean thermal energy conversion and offshore wind energy generated by semi-submersible floats.
Exits
There were 13 exits in January involving corporate venturing investors, down from the 16 at the same time last year. Six of last month’s exits took place in the US. The transactions include three initial public offerings, one merger and nine acquisitions. The prices paid in half of these acquisitions were undisclosed.
The number of exits represents a slight increase over the 11 transactions tracked in December 2016. Total exited capital last month amounted to an estimated $1.04bn, considerably less than the $6.93bn reported at this time last year, but much more than the $255m recorded in December.
By far the most unusual acquisition was that of US-based IT media and data firm International Data Group (IDG), which agreed to be bought by conglomerate China Oceanwide and IDG Capital, its own China-based venture capital affiliate, for an undisclosed sum. IDG Capital will take control of IDG’s corporate venturing business through the deal, while China Oceanwide will control the firm’s IDC and IDG Communications divisions. IDG was founded by Pat McGovern in 1964 and gradually built up a large stable of IT media publications, entering the Chinese market in 1980 with the introduction of a local version of its Computerworld magazine.
Enterprise software provider Hewlett Packard Enterprise agreed to acquire US-based data management software producer Simplivity in a $650m cash deal, providing an exit to telecoms firm Swisscom. Simplivity has built a data virtualisation platform that uses hyperconvergence to help businesses simplify their data centre infrastructure and make it more secure. The company has raised approximately $276m since its founding in 2009.
China-based online gaming company G-bits Network Technology completed an IPO on the Shanghai Stock Exchange, securing RMB961m at a $791m valuation. The flotation provided an exit to Ping An Ventures and IDG Capital Partners, the venturing subsidiaries of insurance company Ping An Insurance and technology research company International Data Group respectively. G-bits has created a range of virtual reality and massive multiplayer online games in vast online worlds that players from all over the world can connect to and play in simultaneously.
Pharmaceutical companies Celgene and Pharmstandard recorded an exit as US-based immuno-oncology therapy developer Jounce Therapeutics went public in a $102m IPO. Jounce issued 6.4 million shares at $16 each, above the $13 to $15 range it had initially set. Founded in 2012, Jounce develops immunotherapies based on its Translational Science Platform to fight cancer by targeting diverse cellular components of the human immune system.
Switzerland-based reproductive health company ObsEva raised $96.8m when it priced an IPO, allowing pharmaceutical firms Novo and Merck Group to exit. ObsEva issued 6.45 million shares on Nasdaq at $15 each, in the middle of the $14 to $16 range it had set. ObsEva develops therapeutics that can treat conditions affecting women’s reproductive health and pregnancy.
Housing.com, an India-based real estate listings portal backed by telecoms group SoftBank, was acquired by competitor PropTiger. Housing.com was valued at $70m to $75m, while PropTiger was valued at $200m to $210m. The deal follows a six month effort by Housing.com’s owner Locon Solutions and its lead investor SoftBank to find a suitable buyer. The merged company also received a $50m investment from Rea Group, a real estate advertising company owned by mass media conglomerate News Corp, and $5m from SoftBank.
E-commerce companies Beenos and iBuy exited Malaysia-based mobile commerce marketplace Duriana in an acquisition by Singapore-based peer Carousell. Duriana operates an e-commerce app with roughly 600,000 registered users – about 200,000 of them active monthly users – and is expected to boost Carousell’s offering in Malaysia and the Philippines. The purchase price was not revealed.
Consumer electronics manufacturer Samsung exited Canada-based deep learning technology developer Maluuba through an acquisition by software provider Microsoft for an undisclosed amount. Maluuba applies deep learning to the function of understanding language. It operates a research laboratory in Montreal with a view to developing a machine that can read, understand, infer and make logical decisions based on language in the same way a human would.
Intel Capital, the corporate venturing arm of semiconductor maker Intel, exited US-based mobile application management technology developer Apperian in an acquisition of undisclosed size by cybersecurity software provider Arxan Technologies. Founded in 2009, Apperian runs a platform that enables businesses to securely manage apps across their organisations, allowing unsecured devices to be used safely.
Healthcare group WuXi AppTec acquired China-based pharmaceutical research services provider HD Biosciences for an undisclosed amount, giving exits to pharmaceutical firms Pfizer and Eli Lilly. Founded in 2002, HD supplies preclinical contract research services to drug developers, including target validation, hit identification, lead discovery, in vivo pharmacology and screening.
