At the events and workshops GCV organises, we often point to the fact that a corporate investor is likely to be found among the syndicates of larger VC rounds. 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 their backing of a startup until it has reached later stages of development, which naturally tend to entail larger-in-size rounds. On the other, some corporate venturers play the game for financial returns mainly, therefore later-stage and larger rounds – some of which with special classes of shares guaranteeing minimum returns should an envisioned exit strategy nosedive – are also an alluring option to them.
Corporate-backed nine-figure rounds are, thus, interesting to monitor on a global scale. Historically, the majority of deals sized $100m and above have been concentrated mostly in the US and China, as the following GCV Analytics bar chart suggests, with megadeals deals from the rest of the world picking up in number only in the past two years. It is also evident from the same chart that it is precisely these rounds (hitting a record number of nearly 300 in 2018) that account for the vast bulk of total estimated capital in the corporate venturing realm. For example, we tracked more than 2800 deals worth a total of nearly $180bn in estimated capital for 2018, of which $138bn, that is 77%, were deployed in 298 deals that were $100m or larger.
Dollar-wise the geographical distribution is also uneven and more skewed towards China and the United States, as the next bar chart shows. During the first half of 2019, we tracked a total of $43.7bn deployed in corporate-backed large rounds, which does appear to suggest a potential slowdown by the year end.
Finally, it is also worth asking what type of companies raise such gargantuan rounds. Unlike their geographical distribution, there does not seem to be a bias for companies from any particular sector among those top rounds raisers, as the third bar chart illustrates. Except for some occasional peaks for companies from the transport, consumer or health sector in recent years, a promising business from almost any sector can be (almost) equally as likely to raise a large round.
