Over the first quarter of this year, GCV Analytics has tracked 423 deals worth a total of more than $18.9bn, up 15% by value from $16.3bn in the same quarter last year. This quarter’s totals also compare favourably with those of the previous quarter, the last three months of 2015, when an estimated $11.3bn of corporate venture capital was deployed globally.
The two leading investors by number of deals in the first quarter were Salesforce and Intel, with 19 and 17 deals respectively. Vying for third place were Alphabet, General Electric and International Data Group, taking part in 11 deals each.
However, the table leaders are different when comparing involvement in large deals. China-based e-commerce giant Alibaba was involved in only seven deals, but they were worth a total of over $7.2bn. China-based internet company Tencent also took part in seven deals totaling over $3.6bn.
The most attractive sectors for investments in both Asia and North America have been financial services, IT and media. North American corporate venturing investors, unlike their Asian colleagues, are also actively investing in emerging enterprises in health, telecoms, consumer and industrials.
The largest investments during the quarter went primarily to companies from the consumer, services, transportation and financial sector. China and the US were the two markets that hosted most of the main deals this quarter. The top four deals exceeded $1bn in size and China was the venue for three of those.
In January, China-based local listings and group buying company China Internet Plus Holdings raised over $3.3bn in new funding from undisclosed investors. The firm counts internet company Tencent and e-commerce group Alibaba as investors, and was created when group buying company Meituan merged with local listings and reviews platform Dianping in October last year.
In March, Cainiao, a China-based logistics affiliate of e-commerce group Alibaba, received funding from a range of investors in a round reported to be over $1.54bn, indicating the increasing sums being injected into logistics. The funding came from Singaporean state-owned funds Temasek Holdings and GIC, Malaysia’s Khazanah Nasional, which is Malaysia’s sovereign investment fund, and China-based investment firm Primavera Capital.
In January, China-based online financial services provider Lufax confirmed it had raised almost $1.22bn, at an $18.5bn valuation, in a record-setting series B round, from an array of investors including insurance firm Ping An.
In the US, the biggest deal of the quarter was Lyft’s funding round, which closed in January at $1bn. The US-based ride-hailing service attracted General Motors as a lead investor, providing $500m, along with Alibaba and Rakuten, Chinese ride-hailing company Didi Kuaidi and investment management firm Janus Capital Management, among others.
The dominance of China and the US was also reflected in first-quarter exits. We tracked 39 exits of companies backed by corporate investors and most of them also took place in those countries. The majority involved companies in the media, transportation, consumer and IT sectors. The two exits that surpassed the $1bn threshold were companies based in the US.
In January, US-based films and comics producer Legendary Media was acquired by China-based real estate and cinema group Dalian Wanda for $3.5bn, providing exits to a range of investors, including telecoms and internet company SoftBank. In March, Cruise Automation – a US-based developer of driverless vehicle technology – was acquired for $1bn by the automobile manufacturing giant General Motors (GM). Cruise Automation was previously backed by Qualcomm Ventures.
From co-investment trends over the quarter and the past year, there are patterns of investment behaviour. Google – which rebranded as Alphabet – has co-invested in eight emerging enterprises alongside VC firm Kleiner Perkins Caufield & Byers, in five companies with New Enterprise Associates, and another five with Fidelity. China-based internet company Tencent and US-based VC firm Sequoia Capital have co-invested in six companies.
