Over the month of April, we have tracked 122 deals worldwide, worth an estimated total of $11.11bn. A majority of those deals took place in North America, the US in particular, as shown on the map below. However, as pointed out further below, China was where a large portion of the capital was deployed.
The leading corporate investors in terms of number of deals have been Alphabet, General Electric and Tencent. However, in terms of dollars invested the top three are based in China – China Life, Tencent and Alibaba.
There were fewer deals than in the preceding months this year. There has been a downward trend in the number of deals since the beginning of 2016, with 157 deals in January, 132 in February, and 136 in March. Last month there were also fewer deals than the same month last year – 164 in total.
In terms of estimated capital invested, April actually ranks quite high with its $11.11bn, making it the most active month of the year so far. This amount is comparable to the results from January – $9.42bn.
However, less than half of that amount was raised in the two preceding months of March and February – $4.71bn and $4.36bn, respectively. Last month, corporate venturing investors committed more than double the amount they did in April last year – $5.44bn.
Top deals
The five largest deals over the past month account for about $7.94bn or 70% of disclosed financial activity. Each of those five deals took place in China, with two of them well above the $1bn mark. The driving force behind these big deals in China were internet giants like Alibaba and Tencent.
The most interesting sectors to corporate venturing investors have been IT, health and consumer, while the most active corporate investors have come from the IT, financial services and media sectors, as indicated on the deal heatmap overleaf.
On April 26, it was announced that Ant Financial, China-based e-commerce group Alibaba’s financial services affiliate, closed $4.5bn in a round that stands as the largest officially disclosed by a private technology company, as reported by the Wall Street Journal. The series B round, which valued Ant Financial at about $60bn, included postal service China Post Group and insurance companies including China Life, sovereign wealth fund China Investment Corp, private equity firm Primavera Capital Group, state-owned China Development Bank Capital and CCB Trust, a subsidiary of China Construction Bank. Formed by Alibaba in 2014, Ant brings together several online financial services and investment entities, including Alibay, the most widely-used online payment platform in China.
On April 14, e-commerce group Alibaba and its financial services affiliate Ant Financial invested $1.25bn in China-based online food ordering platform Ele.me. Alibaba provided $900m of the funding while Ant Financial put up the remaining $350m. Ele.me runs an online platform to order food for delivery from local restaurants, operating in an increasingly busy sector in China.
China-based operator of cinema and event ticketing app Wepiao, Weiying Technology, raised RMB4.5bn ($693m) in a series C+ round, led by gaming company Dalian Zeus Entertainment. The round included internet company Tencent, mobile game publisher iDreamSky, CMC Holdings, Ocean Capital Group and China Everbright, which took part through its Everbright Financial Holding Asset Management subsidiary. Founded by Tencent, growth equity firm Bison Capital and the state-sponsored China Culture Industry Investment Fund in 2014, Wepiao is an app-based service that sells tickets for more than 4,500 Chinese cinemas as well as around 1,200 theatres, stadiums and exhibition venues.
China-based real estate services provider Lianjia, also known as Homelink, raised RMB6bn in a series B round featuring internet companies Tencent and Baidu, along with Huasheng Capital, a private equity fund managed by merchant bank China Renaissance Partners. Founded in 2001 as a bricks-and-mortar estate agent, Lianjia now runs a real estate management and asset management business encompassing some 5,000 branches across China as well as an online portal listing around 56 million properties.
China-based chauffeured lift service UCar confirmed a RMB3.68bn funding round featuring e-commerce firm Alibaba, China International Capital Corp, Citic Securities and Shenwan Hongyuan. UCar was spun out of China Auto Rental in January 2015.
Funding
There were funding deals and new corporate venturing units launched during April. The table overleaf shows the top 10 funding announcements of last month.
Hony Capital, the private equity firm launched by China-based conglomerate Legend Holdings, closed a $2.7bn dollar and renminbi denominated fund. About 70% of the fund is in dollars and the remaining 30% in renminbi. Hony is taking a dual currency approach to avoid conflict between the firm’s dollar and yuan investors, who traditionally would have seen their capital invested separately.
Robert Bosch Venture Capital, the strategic investment arm of Germany-based industrial product and appliance manufacturer Robert Bosch, established its third fund, committing €150m ($170m), bringing total funds under management to $480m.
China-based outdoor advertising company Focus Media partnered private equity firm FountainVest Partners to form a $400m fund to invest in sports companies, as China Money Network reported, citing a securities filing.
Laboratory services provider Charles River Laboratories and pharmaceutical firm Knight Therapeutics are among the limited partners for a €183m fund closed by Netherlands-based, life sciences-focused venture capital firm Forbion Capital Partners.
Rakuten Ventures, the corporate venturing subsidiary of the Japan-based internet company, doubled the size of its Global Investment Fund to $200m. Initially launched in 2013, the fund makes international investments in internet services companies and operates alongside an $85m Japan Fund launched by Rakuten in January.
Taiwan-based consumer electronics manufacturer HTC unveiled a $100m accelerator initiative that will invest in the virtual reality (VR) sector. The Vive X accelerator, named after the company’s Vive VR headset, will offer startups access to HTC’s VR technology, expertise and mentoring. Companies will also receive funding in exchange for a minority stake, though details have not yet been revealed.
US-based genome technology provider Illumina pledged $100m to a new independently managed venture capital firm called Illumina Ventures over the next 10 years.
People
Arvind Sodhani, former president of Intel Capital, has set up venture capital firm Silver Trail Ventures, and warned corporate venturers to stick to venture investing rather than be functionaries for business development units. His new firm is understood to be raising $500m for its first fund.
Former corporate venturer Andrew Tang partnered Tim Draper, a co-founder of VC firm Draper Fisher Jurvetson, in a $190m fund, as reported by TechCrunch. Tang headed ABB Technology Ventures, the corporate venturing arm of power and automation company ABB, between 2011 and 2014. The new fund will be overseen by Draper Associates, which is now recruiting limited partners (LPs) for the new fund, in which Draper himself is still the largest LP.
Jack Young, who led Qualcomm Ventures’ memorable investment in Fitbit, joined Deutsche Telekom’s recently formed Deutsche Telekom Capital Partners. Global Corporate Venturing named Young number two on our Rising Stars list published in January. Young had been recently promoted to head North America at Qualcomm Ventures, stepping up from head of the Qualcomm Life Fund.
Akihiko Okamoto, managing director of corporate venturing unit Recruit Strategic Partners for over four years, has been promoted to corporate executive officer of its parent company, Japan-based human resources firm Recruit Holdings. Okamoto joined Recruit in 2007 as manager of its new business development and brand management divisions.
Basil Darwish has left Citi Ventures, Citi Group’s corporate venturing arm, to become director of strategic investments at financial services firm Wells Fargo. Darwish had been a senior vice-president at Citi Ventures in New York since 2014.