IT leads the way in month’s activity
During January Global Corporate Venturing recorded 74 investments worth a total of $2.5bn and six exits worth atleast $4bn. The top sector was IT (23), followed by health (18), consumer (14) and media (5). In cases where investment rounds were disclosed, series B and C accounted for 12 deals each, and there were nine series A deals.
One deal in January defied sectorisation – Google Ventures co-led a $18m series A funding for mobile computing technology, stealth-mode start-up Nextbit Systems. What is known, according to the company itself, is that the line-up of personnel is composed of “technical rock stars”.
Internet of things and smart devices
Google featured in the largest exit thus far in 2014, the acquisition of its own portfolio company Nest Labs, a maker of smart smoke detectors and carbon monoxide alarms, for a reported $3.2bn.
Internet-of-things (IoT) deals continued to accumulate in January. Semiconductor technology company SuVolta raised $10.6m backed by a new participant, Japan’s Fujitsu Semiconductor, to accelerate technologies “criticalfor the emerging IoT market”. Cisco, meanwhile, has established a $100m corporate venturing fund to invest instart-ups developing technologies to advance the “internet of everything”, as John Chambers, Cisco’s chief executive, now terms the sector.
Wearables
Wearables became fashionable in 2013, and deals continued flowing in 2014. Lebanese wearables start-up Instabeat raised funds from investors, including Jabba Internet Group, to launch its first product – a goggle-mounted heartrate monitor for swimmers. And MC10, a US-based maker of stretchable, conformal electronics for use in products including digital health and medical devices, such as Reebok’s Checklight head impact indicator, raised $19.8m in series D funding.
Industrial and products
In the industrial sector, stretched here to cover hardware and technologies underpinning physical, consumer products, Nigeria-based, pan-African investment company Heirs Holdings supported satellite maker and earth-imaging company Planet Labs, already backed by investors, including OATV.
There were two similar investments in interface companies– FlatFrog, a Swedish, multi-touch systems provider, raised $10m from existing investors, including Intel Capital, to ramp up production; and Japan’s Ryoyo Electric Corporation joined Thomvest in series B funding for Tactus Technology, a maker of dynamic surface technology that transforms touchscreens from a flat to a three-dimensional interface. Also in the product interface space, Robert Bosch Venture Capital led a further $4m investment in Scottish tech company Pyreos, which is working on gesture recognition.
And there were two deals in the world of light-emitting diodes (LEDs). High-Tech Gründerfonds invested an undisclosed amount into ICE Gateway, an LED lighting company, while Dutch 3D printing technology company Luxexcel raised growth financing from investors including Chrysalix Set, to “accelerate the growth of the LED lighting industry”.
Also in January, flame-retardant plastic maker FRX Polymers raised $12m series C financing led by Evonik Venture Capital and including BASF Venture Capital, and dynamic glass maker View, already backed by General Electric and Corning Incorporated, received $100m financing from Madrone Capital Partners, impressed by its “game-changing product”.
Marketplaces and e-commerce
Marketplaces and vertical e-commerce ventures were particularly active in January, not least in Asia, led by a huge round of funding for app marketplace Wandoujia. Corporate venturing outfits Softbank, DCM and incubator-cum-venture fund Innovation Works Development Fund backed a $120m series B funding for the Chinese company.
Elsewhere in Asia, German retailer Tengelmann Group invested $3m in Asian price comparison site PricePanda, China-based product crowdfunding site DemoHour secured an undisclosed level of series A funding led by Matrix Partners China and Intel Capital, and Vertex Venture Management, a venturing unit of Temasek Holdings, led a $15m series C investment into Brainbees Solutions, the company that owns the FirstCry.com brand, India’s most popular baby and child focused e-commerce site. IDG Ventures, the corporate venturing unit of publisher International Data Group, also participated.
In fashion, Lamoda, a Russian online fashion retailer launched by Germany’s Rocket Internet, received an equity investment of €10m ($13.7m) from the International Finance Corporation. L Capital, the corporate venturing unit of luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton, acquired a 30% stake in Italian fashion merchandise company Vicini, which owns luxury shoe design brand Giuseppe Zanotti. Fashion e-commerce site Moda Operandi raised $22m series D funding from investors including Conde Nast and LVMH. Men’s clothing brand Zachary Prell raised $15m of series A financing from its Hong Kong-based garment manufacturer TAL Group “to build a comprehensive lifestyle brand”.
Germany-based Delivery Hero raised $88m in a series E round to consolidate its global position in the online and mobile food ordering sector. Insight Ventures led the deal and existing backers include Kite Ventures, Team Europe, RuNet, Tengelmann Ventures, Holtzbrinck Ventures, PointNine Capital and Phenomen Ventures.
Funds raised, which might flow into these kinds of companies, included the Heureka II growth equity fund, managed by Germany-based Acton Capital Partners and backed by German publishing company Hubert Burda Media, which raised $110m at first close. Heureka Growth Fund II will target internet-based companies, with a focus on Europe, as did its predecessor.
Marketing and advertising
In what was one of the liveliest sectors of last year, there was one exit – digital local advertising company YP acquired Intel-backed, location-based mobile advertising technology company Sense Networks – and several investments – American Express-backed Radius Intelligence,a US provider of a data technology platform for business-to-business (B2B) marketers, raised $13m in a series B funding; Aim-listed Netcall, a customer engagement software provider, completed a joint investment with Elderstreet VCT in privately owned Macranet, trading as Sentiment, a provider of enterprise class social media engagement solutions; Inventus Capital Partners portfolio company Vizury, an India-based advertising retargeting start-up already backed by Nokia Growth Partners, was reported to be looking to raise $20m in a series C round led by its existing backer; and the corporate venturing arm of agri-business Syngenta led a €14m series C round in Brandtone, an emerging markets mobile marketing company. Existing backers Unilver Ventures and Verlinvest also invested.
In an associated area of technology – for retail, commerce and sales – Berlin-based restaurant booking platform Quandoo raised $8m of series B led by Holtzbrinck and DN Capital, with ambitions to broaden into a marketing and commerce platform for local businesses; IDG Ventures invested an undisclosed amount of capital in a series A round for Indian mobile-based, employee-focused sales software company FieldEZ Technologies; while sales management platform Salesforce invested an undisclosed sum in B2B-focused Stanford accelerator Alchemist.
Healthcare
One corporate venturing unit has been approaching technology on a cross-sectoral basis, looking at both healthcare and transport. Applied Ventures, the corporate venturing unit of Applied Materials, completed strategic investments in two advanced imaging detection companies– Oncoscope, a medical optical imaging technology company, and Passport Systems, a provider of advanced cargo scanning systems to identify dangerous and contraband materials.
In the area of digital health, data warehousing and analytics company Health Catalyst closed a $41m series C round from existing backers, including strategic investors Kaiser Permanente Ventures and CHV Capital, to develop its healthcare analytics platform. There were two deals involving diabetes– WellDoc, developer of a prescription app for managing the disease, raised $20m of financing from investors including Merck Global Health Innovation Fund, and mobile diabetes management system Glooko raised $7m of series A funding from new investors, including Samsung Venture Investment Corporation, to scale its system and add messaging for therapeutic recommendations. In addition, DNA data management platform provider DNAnexus raised $15m of series C funding from investors including Google Ventures, to help create the “next wave of insights in genetics”. In medical devices, eyes were in focus. MemorialCare Innovation Fund, a strategic investment company wholly owned by the MemorialCare Health System, participated in a $46.5m series B round for eye stent specialist Ivantis, and DG Ventures India reinvested in India-based ophthalmic technology company Forus Health, which makes a portable eye screening device. The round was valued at $8.2m and was led by Asian Healthcare Fund, an India based growth-stage, healthcare-focused private equity fund that invests exclusively in India’s healthcare and life sciences sectors. Also in January, Covidien invested in series A funding for medical device start-up Fire1, launched by the Foundry incubator as its first company created in Ireland amid “one of the leading clusters for medical devices globally”.
Transport
Taxi apps were back for funding this month. Didi Dache, a Chinese taxi-booking app, raised $100m series C financing led by Citic PE and backed by tech company Tencent.
Electric bus maker Proterra, backed by Edison Energy, Constellation, GM Ventures and Hitachi’s Hennessey Capital, was reported to have extended its series C funding by $10m to $34m.
Castrol InnoVentures, a UK-based strategic investment unit of Castrol Lubricants, is promising to make investments in the smart mobility sector. It closed 2013 with three such investments– $2m in GreenSteam, a Faroe Islands-based technology company specialising in energy-saving solutions for commercial marine vessels, an undisclosed amount in US-based Peloton Technology, which is advancing safety and efficiency technology solutions in the heavy truck industry, and participation in the $10m series A funding for US-based cardiagnostics device Zubie.
Travel
The travel bug, prevalent in 2013, has not gone away in 2014.
ISAI, a French early-stage and small-cap private equity fund backed by a growing list of European – largely French –entrepreneurs and senior executives, reinvested in French travel agency-linked business Evaneos. Banque Postale’s corporate venturing unit, XAngePrivate Equity, also participated in the $6m series B round.
Japanese seed accelerator Sun-Bridge backed tourism start-up Any-Road, an online platform that aims to bring technology to typically offline commerce.
Education
There was one exit in this sector– management at Romanian software company Siveco, a provider of learning and enterprise software, bought back minority stakes from Intel Capital and Enterprise Investors.
Daily Mail Group Information (DMGI), on behalf of its education subsidiary Hobsons, invested $9m in India based e-learning company iProf Learning Solutions India, in a series B round. Existing investors Norwest Venture Partners and IDG Ventures India also participated in the round.
Gaming
In mobile gaming, an IDG Capital Partners portfolio company proved its bet on mobile gaming would pay off for investors. LineKong, which recently raised $80m in a series C round led by Starwish Global, tranformed its original foray into China’s PC market into mobile game publishing. Monthly revenue from its “massively multiplayer online role-playing games” has hit over $7m.
Energy and utilities
Energy grid management software provider AutoGrid Systems raised $12.75m in series C financing from investors, included Germany-based energy utility Eon, looking to deploy its big data analytics in making energy cleaner.
General Electric (GE) opened a new “Ecomaginaton Centre” in Abu Dhabi, United Arab Emirates, where it will research how cities can reduce waste production and water and energy consumption. The centre is in an incubator in Abu Dhabi’s Masdar City, said to be one of the most sustainable cities in the world.
Pharmaceuticals and biotechnology
US biotechnology company Avelas Biosciences closed a $6.85m series B financing round led by founding investor Avalon Ventures, joined by new investors Torrey Pines Investment, WuXi AppTec, and an unnamed investor. Amgen spin-off Atara Biotherapeutics raised $52m of series B funding from investors including Amgen Ventures and Celgene Corporation, to accelerate clinical development of lead programmes. US-based pharmaceutical multinational Johnson & Johnson announced it was opening a biotech incubator in Israel, expected to be operational early this year.
Food and agriculture
Agbiotech company Chromatin completed a first closing of its $36m series E round, backed by GE and BP, to accelerate development of sorghum products for battling water scarcity and meeting increased food demands.
Artificial intelligence and robotics
IBM announced it was investing $1bn in establishing a new business unit to capitalise on the cognitive computing power of its Watson technology, including $100m in venture investments for Watson-powered apps.
Cyber-security
Google acquired cyber-security company Impermium, founded three years ago and backed by investors including AOL Ventures, to “help make the Internet a safer place.”
IT
In data and analytics, another $1bn-plus company emerged– SAP Ventures said IT infrastructure company Nutanix was “the future of datacentre infrastructure”, when it co-ledits $101m series D financing at a valuation of around $1bn.
In storage, SanDisk Ventures invested an undisclosed amount in software-defined storage (SDS) company Nexenta Systems to bring together “complementary and disruptive technologies” in flash storage and SDS. But Violin Memory, a flash memory company backed by Toshiba, SAP and Juniper Networks, lost both its chief executive and its chief operating officer, as its shares dropped to below half its initial public offering price.
In networks, Spain-based wifi-sharing network Fon raised $14m in a venture round led by Qualcomm Ventures, the venturing unit of the California-based chip manufacturer. Previous investors also took part in the round, including Google, Deutsche Telekom and venture capital firms Index Ventures, Coral and Atomico. Aster Capital backed a $10m series A round for UK IT cooling specialist, Iceotope.
Video
The NBCUniversal News Group has taken a minority stake in US social video start-up NowThisNews. Existing backers include Softbank Capital, Bedrocket, Lerer Ventures and Oak Investment Partners.
Video syndication exchange Vidible raised $3.35m of series A funds led by venture capital firm Greycroft Partners and including IDG Ventures.
Other sectors were also active – in social networks, Indonesian conglomerate Bakrie Group led a $25m series C round for Indonesian mobile social media company Path. In communications, Nexmo, a UK company specialising in translating internet messages into SMS, raised $18m in a funding round led by US private equity firm Sorenson Capital. The company has raised $22.8m to date, including from corporate venturing units Intel Capital and NHN Investment, both of which participated in this latest round. In enterprise tools, Ricoh agreed to buy MindShift Technologies, a provider of managed IT, cloud, data centre and professional services to small and mid-sized organisations, from Best Buy. In home services platforms, Care.com, a USAA-backed marketplace for housekeeping and care services, raised $91m from an initial public offering, with a capitalisation of $723m.