It has become clear over the past few years that having at least one corporate venture in a round is usually helpful to the entrepreneurs.
Partly this is in helping the business function through supplier and customer relationships and technical inputs but the most visible way it shows up to the outside world is in the exits.
Given relatively few corporate venturing parents buy a portfolio company, (analysis by Martin Haemmig a few years back indicates about 3% to 5%,) it could be expected CVC-backed companies would have similar exit rates and values as their proportion of overall venture-backed deals (about a fifth historically in the US).
However, Doug Trafelet, managing director at Pitchbook, at the GCV Symposium last month suggested that having a corporate investor in a given deal tends to a difference. Not only are deals involving corporate investors consistently valued 30% higher than other deals, exits with corporate investor involvement are consistently larger.
A glance at news lists yesterday (Monday) showed all had a corporate involved in actual or mooted trade sales and flotations.
On trade sales:
Snapchat has acquired Rocketspace-backed Seene, a US-based for users to create and share three-dimension images with their smartphone.
ClickDealer has acquired the assets of Qualcomm Ventures-backed Fiksu, a mobile marketing technology business.
OpenText agrees $163m purchase of Sapphire Ventures-backed Recommind, a US-based data analytics platform, (having earlier celebrated an exit following the acquisition of portfolio company Ping Identity by Vista Equity).
SoftBank has agreed to sell most of its minority stake in Tokyo-listed games publisher GungHo back to the company for around $685m, (having earlier agree a multi-billion dollar share sale from China-based portfolio company Alibaba).
On planned initial public offerings (IPO):
UK-based biopharmaceutical company Mereo Biopharma is set to float on Aim providing an exit to shareholders including pharmaceutical firm Novartis.
Syros Pharmaceuticals, a US-based developer of gene control therapies for cancer and other diseases, filed for a $69m IPO, with shareholders including WuXi Healthcare Ventures (5.8%).
UPS and Intel-backed Impinj, which connects an item’s identity, location and authenticity to applications that coordinate inventory management, patient safety, asset tracking and item authentication, plans to list on Nasdaq for $60m.
And on portfolio company acquisitions:
Alphabet’s GV-backed Medium, a US-based blog platform, has acquired Superfeedr.
SIG and Axiata-backed KFit acquired the Indonesia business of Nasdaq-listed group buying company Groupon.
Given There are more corporate venturing units, with Global Corporate Venturing tracking more than 1,500 and about a dozen launches per month (see the latest issue here), and these are increasingly active, with 801 doing a corporate venture capital (CVC) deal last year, then the likely chances of a corporate-backed exit only increases.
As Trafalet at the GCV Symposium said, CVCs so far this year (to 17 May) were involved in about 60% of all venture rounds, up from 45% last year. By number of deals, CVCs were in about 20% of deals this year, up by about a third from last year, Trafalet added.