On our events and workshops, we often note the fact that one is likely to find a corporate investor among the syndicates of larger VC funding rounds. To be sure, there are plenty of reasons for this. On the one hand, for a variety of communication-related reasons, many corporate investors are often reluctant to publicly disclose that they are backing a startup until it reaches later stages of development, which naturally tend to attract larger-in-size rounds. On the other, some corporate venturers play the game for financial returns mostly, therefore later-stage and larger rounds – some of which even offer clauses guaranteeing minimum returns should the envisioned exit strategy fail – are a naturally alluring option to them.
Corporate-backed nine-figure funding rounds are, thus, curious to look at it on a global scale. In sheer number for any give year, the majority of deals of $100m and above are concentrated mostly in the two major innovation geographies of the world – the US and China, as the following GCV Analytics bar chart suggests. It is also evident from the same chart that it is precisely these rounds (so far less than 200 per annum) that account for the vast bulk of total estimated capital in the corporate venturing realm. For example, we tracked 1,354 deals worth an estimated $85.3bn in the first half 2018, of which $66bn, i.e. 77%, were deployed in 145 deals that were $100m or larger.
Dollar-wise the geographical distribution is also uneven and skewed towards China and the United States, as the next bar chart shows, and much more so toward China, in fact. During the first half of 2018, $42.3 out of the $66bn we tracked went to China-based companies. In comparison, $15.3bn went to US-based emerging businesses.
Finally, it is also worth asking what type of companies raise these gargantuan rounds. Unlike their geographical distribution, there does not seem to be a bias for companies from a particular sector among those top rounds raisers, as the third bar chart shows. Except for some occasional peaks for companies from the transport, consumer or health sector in recent years, a promising business from almost any industry can be equally likely to raise a large round.
