The number of corporate-backed deals reported by GCV in April was 258, up 5% from the 246 funding rounds in the same month last year. Investment value, however, plummeted by 42% to $8.29bn – down from $14.28bn in April 2018. Last month’s deal count was similar to the first three months of the year. However, the total estimated capital invested was lower.
The US hosted most corporate-backed deals, 122 rounds, while China was second with 27, Japan third with 26 and India fourth with 18.
The leading corporate investors by number of deals were diversified internet conglomerate Alphabet, financial services firms SBI Group and Fidelity. The largest deals involved telecoms firm SoftBank, automotive components manufacturer Denso and Alphabet.
GCV Analytics reported 32 corporate-backed funding initiatives in April, including VC funds, new venturing units, incubators, accelerators and other. This was a slight increase over March, when there were 29 such initiatives. The estimated capital raised in those initiatives was $2.07bn, less than half the estimated $5.6bn for the previous month.
Deals
Emerging businesses from the IT, health, services, financial and media sectors raised the largest number of rounds in the fourth month of 2019. The most active corporate venturers came from the financial services, IT, media and industrial sectors.
US-based ride-hailing company Uber spun off its autonomous driving subsidiary, Uber Advanced Technologies Group (ATG). The company received $1bn from three corporate venturing investors. Car components manufacturer Denso and car maker Toyota jointly committed $667m, while the SoftBank Vision Fund provided the remaining $333m. The round reportedly valued Uber ATG at $7.25bn post-money. Uber ATG is developing autonomous vehicle technologies, including sensors and systems geared with object perception, motion and prediction planning, mapping and data visualisation technology.
Automotive manufacturer Ford invested $500m in US-based plug-in electric off-road vehicle developer Rivian. The investment came with a partnership agreement that will enable Ford to develop a truck that makes use of Rivian’s flexible skateboard platform, adding to a planned range that will include electric versions of its Mustang sports car and F150 pickup truck. Founded in 2009, Rivian has created a seven-seater sports utility vehicle and a five-seater truck.
US-based digital insurance platform developer Lemonade received $300m in series D funding from a consortium led by SoftBank. Insurance provider Allianz, GV, a corporate venturing subsidiary of Alphabet, equity crowdfunding platform OurCrowd and venture capital firms General Catalyst and Thrive Capital also took part. The round reportedly valued the company at more than $2bn. Lemonade relies on artificial intelligence (AI) and behavioural economics to operate a property and casualty insurance platform. It takes a fixed percentage as a fee and donates a portion of any unclaimed premiums to non-profit organisations.
US-based augmented reality (AR) headset producer Magic Leap received $280m from mobile network operator NTT Docomo as part of a strategic partnership agreement in which Magic Leap aims to expand its ecosystem, Magicverse, internationally. Magic Leap will deliver its platform to Japan-headquartered NTT Docomo’s customers by tapping into the corporate’s forthcoming 5G infrastructure. The two will also work together on adapting Magic Leap’s operating system for the Japanese market. The companies did not reveal the valuation at which NTT Docomo invested, but Magic Leap was valued at $6.3bn when telecoms firm AT&T invested in 2018. Founded in 2010, Magic Leap has created a headset and operating system that superimposes 3D virtual objects on to the real world using technology it has dubbed spatial computing.
Diversified conglomerate SK Group invested $250m in Shenzhen Londian Electrics, a China-based developer of electric equipment such as energy meters. The investment involves a joint venture between the two companies, as Londian looks to become a leading international producer of copper foil and enhance its presence in advanced batteries and communications technology materials. Founded in 1996, Londian produces a wide range of power equipment products, from smart meters and distribution network automation technology to 5G communications power supply and photovoltaic equipment to lithium battery components and energy storage technology.
Toast, a US-based restaurant management software provider backed by Alphabet, raised $250m in a series E round, reportedly valuing the company at $2.7bn. Growth equity firm TCV and hedge fund manager Tiger Global Management co-led the round, which included venture capital firms Bessemer Venture Partners and Lead Edge Capital. Toast launched its platform in 2013, two years after the company was founded, and now serves tens of thousands of restaurants.
The SoftBank Vision Fund led a $225m series D-plus round for China-based travel services provider Klook. Venture capital firms Sequoia Capital China and Matrix Partners, growth equity firm TCV and equity crowdfunding platform OurCrowd also participated. Klook runs an online platform for travellers to book tours, restaurants, transportation and tickets to local attractions. The company has entered the US, Europe and Australia and the latest funding will support further international expansion, particularly in Asia.
GV co-led a $175m series D round for US-based customer data software provider Segment. The round was co-led by venture capital firm Accel and private equity firm Meritech Capital, and included Thrive Capital, Y Combinator Continuity, Sapphire Ventures and eVentures. The round reportedly valued Segment at $1.5bn. Segment has created a platform for businesses to collect, store and manage customer data for marketing, data analytics and warehousing purposes. The funding will help open offices in North America, Asia-Pacific, Europe, the Middle East and Africa.
Payment services firm Visa and venture capital firm Foundation Capital co-led a $170m series C round for US-based financial services app developer Branch International. The round included online lending platform CreditEase, the World Bank’s International Finance Corporation, Andreessen Horowitz, Trinity Ventures, Formation 8, Victory Park Capital, Greenspring Associates, Foxhaven Asset Management and B Capital. Branch has a mobile-focused financial services platform with 3 million customers that has been tailored for emerging markets. It has offices in Mexico, India and Kenya, and uses alternative forms of data, as opposed to credit histories, to determine creditworthiness. The funding will support expansion in Africa, India and Latin America.
Automotive manufacturer Daimler led a $170m series E round for US-based advanced battery materials developer Sila Nanotechnologies that included industrial technology and appliance producer Siemens’ Next47 unit. The round also featured 8VC, Bessemer Venture Partners, Chengwei Capital, Matrix Partners and Sutter Hill Ventures, and boosted the company’s overall funding to $295m. Sila Nano is developing materials for use in lithium-ion batteries.
Exits
In April, GCV Analytics tracked 18 exits involving corporate venturers as either acquirers or exiting investors. The transactions included 11 acquisitions and seven initial public offerings. There were fewer exits than the 23 in March. The total estimated value dropped to $3.06bn compared with $10.76bn the previous month. The number of exits matched the number in April last year, though the value was significantly lower than the $5.89bn in the same month last year.
Pinterest, a US-based social media platform backed by e-commerce firm Rakuten, raised $1.43bn when it floated on the New York Stock Exchange. The company priced 75 million shares at $19 each, above the $15 to $17 range it had set earlier, giving it a reported market cap of $12.6bn. Underwriters had 30 days to buy up to 11.3 million more shares, which could boost the size of the IPO to $1.64bn. Founded in 2009, Pinterest runs an online platform with more than 250 million monthly users who post and share images.
IT management software provider SolarWinds acquired Samanage, a US-based employee service management platform developer backed by enterprise software producer Salesforce, for $350m. SolarWinds expects Samanage’s offering to complement its on-site IT infrastructure management software, helping to cover the requirements of customers ranging from small and medium-sized enterprises to large corporations. Founded in 2007, Samanage has a cloud-based platform that facilitates IT service management, applying AI to automate certain processes.
Car-sharing service provider Getaround acquired France-based car-rental marketplace Drivy in a $300m transaction that gave car repair services provider Mobivia an exit. The merged company will have more than 5 million users in 140 US cities and 170 European cities. Founded in 2010, Drivy runs a peer-to-peer car rental platform with roughly 2.5 million users in France, Germany, Spain, Austria, Belgium and the UK.
Video-streaming platform Vimeo acquired Israel-based video-editing app developer Magisto for an amount reported by Globes to be about $200m. Vimeo and Magisto will work jointly on adding short-form video-creation capabilities to the Vimeo platform, while Magisto’s users will gain access to Vimeo’s suite of tools. Founded in 2009, Magisto has a platform that uses AI to generate short films by automatically selecting clips from a user’s photos and videos.
Jumia, a Germany-based Africa-focused online marketplace backed by several corporate investors, went public in a $196m IPO in the US. The company issued 13.5 million American depositary shares on the New York Stock Exchange at $14.50 each, in the middle of the offering’s $13 to $16 range, valuing it at about $1.1bn. Payment services firm Mastercard bought another €50m ($56.5m) of shares in a concurrent private placement. Founded in 2012, Jumia has an e-commerce platform that operates in 14 African countries, but which made a $195m loss in 2018 against $150m in revenue according to the IPO prospectus. The company operated through parent company Africa Internet Group, a partnership formed by e-commerce holding company Rocket Internet and telecoms companies Millicom and MTN.
US-based oncology therapy developer Turning Point Therapeutics raised about $167m from an IPO that gave exits to pharmaceutical firms GlaxoSmithKline and Eli Lilly. The IPO consisted of 9.25 million shares on the Nasdaq Global Market at $18 each, the top of the $16 to $18 range set earlier. Turning Point is developing precision small molecule cancer drugs.
China-based social marketing services provider Ruhnn secured $125m in an IPO on the Nasdaq Global Select Market that gave an exit to e-commerce group Alibaba. Ruhnn issued 10 million American depositary shares, each representing five ordinary shares, at $12.50 each, in the middle of the IPO’s $11.50 to $13.50 range, valuing the company at $413m. Social media company Weibo bought $8m of shares in the offering. Founded in 2016 as Hanyi E-Commerce, Ruhnn oversees a network of social media influencers with a combined 148 million followers, providing training and connecting them to commercial partners for marketing opportunities.
NGM Biopharmaceuticals, a US-based biotechnology company backed by pharmaceutical firms Merck & Co and Takeda, filed for a $75m IPO on the Nasdaq Global Select Market. Founded in 2007, NGM is working on treatments for cardio-metabolic, liver, oncologic and ophthalmic diseases. The company has seven drug candidates in its pipeline, five of which have entered clinical trials.
Life360, a US-based family-tracking technology provider backed by home security product maker ADT, car maker BMW and real estate services company Duchossois Group, raised about $104m in an IPO in Australia. The company issued nearly 30 million shares at A$4.79 ($3.43) each, giving it a valuation of $494m when it went public on the Australian Stock Exchange. Founded in 2008, Life360 provides web and mobile apps that allow family members to locate each other on a map and receive notifications when others arrive at a certain location, such as school or work. The app also supports private and group messaging, and Life360 has also added a feature that can detect when a user is involved a car crash, automatically contacting emergency services.
Hookipa Pharma, a US-based immunotherapy developer backed by pharmaceutical firms Gilead Sciences, Takeda and Boehringer Ingelheim, floated in an $84m IPO. The company issued 6 million shares on the Nasdaq Global Select Market at $14 each, at the bottom of the IPO’s $14 to $16 range, valuing it at about $356m. Hookipa is developing immunotherapies using its arenavirus platform, targeting infectious diseases and cancer, and is focusing on three lead product candidates.
This is our data snapshot based on last month’s investment activity. The charts and tables have been generated by our data platform GCV Analytics.
Note: Monthly data can fluctuate as additional data are reported after GCV goes to press.