The consumer sector has been characterised by a quest for customer-centricity and technological progress over the past decade. Before the pandemic, it revolved around digital transformation and changing consumer habits and preferences. The pandemic interrupted supply chains but its disruptive force did not stop there; it boosted e-commerce businesses and hit traditional brick-and-mortar retail hard. Now, vaccines are being rolled out and the pandemic is being tackled, we are yet to see how many of those changes in consumer behaviour will remain permanent.
Our previous reports on the sector have emphasised the importance of demand-side pressures on products’ contents and packaging that have gone hand-in-hand with supply side disruption thanks to the rise of e-commerce and the digitisation of retail. These trends have deepened with the pandemic and are likely tocontinue to deepen over the short and medium term.
The outcome of digitisation is understanding and correctly interpreting consumer preferences plus increasing one-on-one connections. The massive monetary intervention of central banks in world markets seems to have stalled the possibility of a severe recession, at least for now. Spending on discretionary consumer products has, for the most part, kept pace despite the pandemic and lockdowns. And unless there is a sudden major recession, the pace is likely to be maintained.
The 2021 Consumer Products Industry Outlook report by consulting firm Deloitte points out that “four in five consumer products industry executives are confident in their organisation’s ability to execute its business strategy in [2021]”. The report, however, notes the recovery is “predicated on a variety of factors, including covid-19 vaccine deployment, safety restrictions, fiscal support, state and local government coffers, the persistence of virtual schooling and work, and even consumer psychology and the stickiness of new habits”.
The latter has given digitisation a boost and, yet, as the Deloitte report remarks, only one out of four executives from the sector “believed that their digital capabilities are advanced relative to industry peers”. It is not surprising that 80% say they are allocating resources to improving their e-commerce capabilities and direct-to-consumer channels.
Digital transformation is also being used to create internal efficiencies: “Three in five execs say they will invest further in their work-from-home platforms. More than one in three are upgrading their enterprise technology, as well as investing in robotic process automation and artificial intelligence (AI) technology. Half of executives indicate their companies will increase their 2021 investments materially in data privacy and cybersecurity.” This can only mean more corporate investment in emerging businesses developing these technologies.
Food and beverages is a subsector that has seen a lot of growth, a trend that was visible before the pandemic and stay-at-home orders. This was clearly captured by our GCV Analytics data. According to a recent report “Food And Beverages Global Market 2021: Covid-19 Impact and Recovery to 2030”, the food and beverages global market grew to $6.196 trillion by the beginning of 2021, having registered a compound annual growth rate (CAGR) of 6.1%. The report attributes the growth to companies rearranging operations and recovering from the pandemic impact. It also forecasts the market to reach $8.16 trillion by 2025 at a CAGR of 7%.
In the context of a recovery and consumers being ever more health and environmentally conscious after the pandemic, a number of broad trends that have been shaping the industry are likely to continue to do so, including experience-based shopping, cannabis going mainstream, plant-based food, premiumisation of some categories along with of private label growth in others, added nutritional benefits to food and beverages (such as electrolytes, minerals, adaptogens, probiotics and so on), and even the comeback of tobacco-based products in different formats.
On a larger level, it is demographic trends that drive the underlying growth for the sector. According to data cited by the European Commission, the global middle class grew from 1.8 billion people in 2009 to about 3.5 billion in 2017. Well over half of the world population (5.3 billion people) is expected to reach middle class status by 2030, with some 88% of the additional middle class population in Asia. This trend also translates into expected growth in e-commerce. According to data provider Statista, commerce is projected to grow by nearly 71% in China by 2023 versus roughly 46% in the US.
Even before the pandemic, e-commerce appeared to have had a big impact on traditional retail. Some analysts spoke of a “retail apocalypse”, as we saw brands like denim producer Diesel or department stores Sears going bankrupt.
The rise of private label brands and a general “shift to value” has been a phenomenon in some mature markets, as consumers looked for ways to save money. According to report on these brands by consumer research firm Nielsen from 2018: “The largest markets for private-label products are found primarily in the more mature European retail markets. Comparatively, private label still has much room for growth, especially in North America, where penetration is still relatively low.” According to data cited by the Forbes magazine, this trend deepened during lockdowns in 2020. Nielsen found that about two-thirds of consumers rank store brands as being as good in quality as traditional brands, and more than a third ranked some private label as better. Consumers were showing a higher propensity to save money before the pandemic hit, as many were already anticipating an economic reversal of some sort. It is hard to predict whether this will remain in the near future.
In the American classic, The Great Gatsby, F Scott Fitzgerald depicts the exuberance of the “roaring twenties”, among other things. That exuberance and an increase in spending were, in part, propelled by the fact that people were living a period immediately after a World War and a pandemic as well. The vagaries of collective human behaviour are hard to predict, when most are excited about a definitive reopening but concerned about the possibility of central banks raising interest rates.
Consumers’ increased tendency to save money has taken a toll on consumer brands and brand equity building. This is one of the major reasons why executives from the sector obsess about customer-centricity and aim to better understand and connect with. Through interaction with consumers, their brand offering and image can be enhanced and converted into opportunities to monetise. So, the heightened interest in companies offering in-depth market research or tools to help with this is likely to remain.
Fast-moving consumer goods (FMCG) is the segment which benefited almost immediately by the pandemic and the stay-at-home orders, coupled with herd-buying behaviour. Most analysts agree a correction is inevitable. In its latest update, market research firm Kantar wrote: “FMCG growth is set to reach 10% by the end of Q1 2021. But it is unlikely we are ever going to see double-digit take-home FMCG growth again. A correction is inevitable. The scale and timing of this correction, though, depends on so many unknowns: vaccine rollout plans, recessionary impact, post-pandemic working from home, changes to restrictions and so on. This scenario slowly takes the gains made from “staying at home” away, while reintroducing older trends.”
There are notable trends in the clothing and apparel sub-sector, where digitisation has already been a key disrupting factor. The textile and fashion industry, even globally is a rather concentrated one. It is estimated that the top 20 players, mostly from the luxury segment, earn more than 90% of profits of the whole industry. “The State of Fashion 2021” report by The Business of Fashion and McKinsey, noted that, after suppl- chain disruptions by the pandemic, many apparel companies are reconnecting with suppliers but also “making tough decisions – for example, about return on investment at store level”, while expanding omnichannel services.
The report also points out: “Physical retail has been under historic levels of pressure. In the United States alone, some 20,000 to 25,000 stores were expected to close in 2020, more than double the number that did so in 2019. With the pandemic adding to the segment’s woes, many brands have embarked on strategic reviews or have compressed multiyear transformations into just a few months. In 2020, Nike announced the acceleration of its digital strategy and investment in its highest potential areas, which it said would lead to job cuts in stores. Zara said that it plans to cut 1,200 stores over two years and invest €2.7bn in store-based digital.”
The report states short-term concerns caused by covid-19 will be a driver to look for opportunities: “Strategically, there will be an imperative in 2021 to manage commercial opportunities actively and to be acute in picking winning segments, markets, and channel combinations. With tourism in the doldrums, domestic outlets will become more important than ever. We also expect to see a rise in M&A activity as companies take advantage of low valuations and grab share in fast-growing markets.” Venturing activity may also be expected to continue or even rise.
The sector in charts
For the period between March 2020 and February 2021, we reported 389 venturing rounds involving corporate investors from the consumer sector. A considerable number of them (114) took place in the US, while 79 were hosted in Japan, 47 in China and 25 in India.
On a calendar year-on-year basis, total capital raised in corporate-backed rounds went down from $20.43bn in 2019 to $16.27bn in 2020, suggesting a 21% drop. The deal count, however, increased by 9% from 352 deals in 2019 up to 385 tracked by the end of last year.
The 10 largest investments by corporate venturers from the consumer sector were not necessarily concentrated all in the same industry.
The leading corporate investors from the consumer sector in terms of largest number of deals were electronics producer Sony, e-commerce firms Alibaba and Amazon. The list of consumer corporates committing capital in the largest rounds was headed by Amazon, Alibaba and e-commerce firm Suning Commerce.
The most active corporate venture investors in the emerging consumer companies were financial telecoms and internet conglomerate SoftBank, internet company Tencent and diversified internet conglomerate Alphabet.
Overall, corporate investments in emerging consumer-focused enterprises went down from 303 rounds in 2019 to 282 by the end of 2020, suggesting a 7% decrease. Estimated total dollars in those rounds went down 4% from $12.13bn in 2019 down to $11.67bn by the end of last year.
Deals
Corporates from the consumer sector invested in large multimillion-dollar rounds, raised mostly by enterprises from other sectors.
US-based electric truck developer Rivian secured $2.65bn from a host of investors including e-commerce and cloud computing group Amazon’s Climate Pledge Fund in January. The round was led by funds and accounts advised by T Rowe Price and also included investment and financial services groups Fidelity, Coatue, D1 Capital Partners, among other backers. It reportedly valued Rivian at $27.6bn. Founded in 2009, Rivian is working on an electric pick-up truck called the R1T which is due for release in June 2021, and an electric sports utility vehicle, R1S, out two months later.
Rivian completed another $2.5bn round that included Amazon in July 2020. The round was led by funds and accounts advised by T Rowe Price and featured Fidelity Management and Research, Soros Fund Management, Coatue Management, Baron Capital Group and funds managed by BlackRock.
China-based online tutoring platform developer Zuoyebang closed a $1.6bn series E-plus round featuring Alibaba and SoftBank’s Vision Fund 1. Hedge fund manager Tiger Global Management, venture capital firm Sequoia Capital China and private equity fund FountainVest Partners also participated in the round. Reuters had reported the company was raising money at a $10bn valuation. Zuoyebang runs an online education platform with 50 million daily active users, offering live tutorials and homework assistance. The funding will support the expansion of its categories and the growth of a business offering.
US-based data analytics software developer Databricks secured $1bn in a series G round featuring software provider Microsoft, Amazon, Alphabet and enterprise software producer Salesforce. The last three participated through Amazon Web Services (AWS), CapitalG and Salesforce Ventures respectively, and the round reportedly valued Databricks at $28bn, up from $6.2bn in its previous round, a $400m series F in late 2019.
Databricks has created a data management platform that can handle all structured, semi-structured and unstructured data for enterprise-scale analytics. The technology is based on Apache Spark, the open-source analytics software developed at University of California, Berkeley, by some of Databricks’ co-founders, including chief executive Ali Ghodsi, an adjunct professor at the university.
China-based retail group Suning spun off e-commerce services subsidiary Yunwang Wandian with RMB6bn ($913m) in funding. The capital came from Shenzhen Capital Group, SenseRobot Management, Ningbo Xianshi Enterprise Management and Central China Asset Management, a subsidiary of investment bank Central China International. It valued the spinoff at about $3.8bn.
Suning operates 1,600 stores across China selling consumer electronics and home appliances. It is also an occasional corporate venturer, with a portfolio including AI technology producer SenseTime and online fresh food retailer Yiguo. Yunwang Wandian will function as Suning’s e-commerce outlet, in addition to providing supply chain, last-mile delivery and after-sales services to online merchants and their product suppliers.
Digital payment platform PhonePe was spun off by India-based e-commerce marketplace Flipkart, raising $700m in a funding round led by retail group and Flipkart parent Walmart. The round will also feature additional Flipkart investors though the company did not disclose their identity. It valued the platform at $5.5bn post-money..Formed within Flipkart, the online platform allows users to send and receive money through a mobile wallet, in addition to paying for goods in stores, recharging their mobile and digital television credit, paying utility bills, buying gold and making investments.
E-commerce group JD.com invested $700m in China-based group buying platform developer Xingsheng Preference Electronic Business. Xingsheng Youxuan and JD.com intend to collaborate on technology, logistics and supply chain services across the country’s lower-tier cities. Founded in 2014 and mainly known as Xingsheng Youxuan, the company oversees an online platform that allows customers in local communities across 14 Chinese provinces to buy groceries and household items in bulk.
Apex Microelectronics, a semiconductor subsidiary of printing and imaging product maker Ninestar Corporation, secured RMB3.2bn ($489m) from investors including home appliance manufacturer Gree Electric Appliance. Gree Electric invested through its Zhuhai Gree Financial Investment Management unit, joining 11 others including China Integrated Circuit Industry Investment Fund II, which led the round. Formed in 2004, the company produces microcontrollers, chips for smart printers and internet-of-things systems, and secure system-on-chip technology for network communication. The company has customers in defence, aerospace, healthcare, semiconductor, cybersecurity and connected IT.
Zwift, the US-based social exercise platform, raised $450m from investors including Amazon’s Alexa Fund and bicycle producer Specialized Bicycle Components’ Zone 5 Ventures fund. Investment firm KKR led the round, which also featured private equity firm Permira, investment firms Novator Partners and True, VC Highland Europe and VC fund Causeway Media. It reportedly valued the company at more than $1bn.
Founded in 2014, Zwift lets runners and cyclists connect and race each other at home in computer-generated environments. The platform has more than 2.5 million users and organises dedicated events.
China-based digital retail technology provider Dmall closed a RMB2.8bn ($419m) series C round featuring Tencent, napkins and nappy producer Hengan International and electronics producer Lenovo. The round was co-led by government-owned China Structural Reform Fund and financial services firm Industrial Bank, the latter through an equity investment platform. Lenovo participated through CVC unit Lenovo Capital. Dmall runs a mobile app with 18 million monthly active users that allows customers to buy consumer items from physical stores, including 120 retail partners.
There were other interesting deals in emerging consumer-focused businesses that received financial backing from corporate investors in the same and other sectors.
Xingsheng Youxuan secured approximately $2bn in a funding round featuring Tencent and real estate developer China Evergrande Group. Sequoia Capital China led the round, which also featured FountainVest Partners, Primavera Capital Group, KKR and Temasek. It valued Xingsheng at $6bn pre-money.
Xingsheng Youxuan runs an e-commerce business that allows local communities to purchase items in bulk. The company processes more than 8 million daily orders and covers more than 30,000 towns across China.
Xingsheng Youxuan also closed an $800m series C-plus round that included Tencent. Investment firm KKR is set to lead the round at a $4bn post-money valuation, with Sequoia Capital China, Capital Today, Tianyi Capital, Zhongding Capital and China Renaissance’s Huaxing New Economy Fund also participating.
India-headquartered, corporate-backed food listings and delivery app developer Zomato secured $660m in series J funding at a $3.9bn post-money valuation. Investment and financial services group Fidelity was an investor in the round, along with Tiger Global Management, Luxor Capital, Kora Management, D1 Capital Partners, Baillie Gifford, Mirae Asset and Steadview Capital.
Zomato began life as an online listings and review platform for restaurants but has made its food ordering and delivery service the centre of its business in recent years.
Finland-headquartered food and consumer goods delivery service Wolt completed a $530m funding round that included Prosus, the internet company formed by media and e-commerce group Naspers. The round was led by Iconiq Growth, a vehicle for investment firm Iconiq Capital, and also featured Goldman Sachs’ growth equity unit, among other investors.
Founded in 2014, Wolt runs an app that allows users in 23 countries to order food and consumer goods from restaurants, grocers and other local retailers for delivery, having expanded outwards from its core restaurant-focused business.
MissFresh, the China-based online supermarket backed by Tencent and Lenovo, completed a $495m financing round. China International Capital Corporation led the round, which included fellow investment bank Goldman Sachs’ asset management arm, financial services firm Industrial and Commercial Bank of China, Tiger Global Management and Abu Dhabi Capital.
MissFresh operates an e-commerce platform that delivers groceries to customers in as little as an hour, sourcing items from more than 1,500 small warehouses scattered around China. The company had more than 25 million monthly active users as of mid-2019, but that figure is sure to have risen as online grocery orders skyrocketed during lockdown.
US-based consumer product delivery service GoPuff secured $380m from investors including SoftBank’s Vision Fund at a valuation of $3.9bn. Venture capital firm Accel and investment firm D1 Capital Partners co-led the round, which was also backed by hedge fund Luxor Capital.
GoPuff’s online platform allows customers to order thousands of products from food and drink, to over-the-counter medication and home products that are available for delivery in under 30 minutes with a flat delivery fee of $1.95. Orders are be rapidly through a network of 200 micro-fulfilment centres the company runs across more than 500 cities. The funding will support the expansion of GoPuff’s product range.
China-based online fitness class operator Keep recently completed a $360m series F round led by SoftBank’s Vision Fund. Bertelsmann Asia Investments a vehicle for media group Bertelsmann also took part in the round, as did Tencent, Hillhouse Capital, Coatue Management, GGV Capital, 5Y Capital and Jeneration Capital. The cash was secured at a post-money valuation of about $2bn.
Keep’s online platform provides livestreamed fitness class run by a network of fitness influencers, and it has expanded its registered users to 300 million during lockdown. The company has expanded into producing stationary exercise bikes and treadmills similar to the ones provided by Peloton, in addition to healthy snacks and exercise apparel. It will channel the series F proceeds into strengthening its products and services.
Exits
Corporate venturers from the consumer sector completed 48 exits between March 2020 and February 2021 – 25 acquisitions and 17 initial public offerings (IPOs), five other transactions (mostly reverse mergers) and one merger.
As for year-on-year, the transaction volume and the estimated dollar value spiked significantly compared to 2019 levels – the number of exits went up 28% from 32 to 41 and the total dollars surged 71% from $11.13bn to $19.03bn.
US-based medical diagnostics technology Grail agreed to an $8bn acquisition by genomics technology producer Illumina. Grail will receive $3.5bn in cash and another $4.5bn in stock. The pair have also signed a $315m merger termination agreement. The deal is subject to regulatory approval.
Spun off from Illumina in 2015, Grail is working on technology that combines gene sequencing with population-level clinical studies to detect cancer at an earlier stage. The company had filed for an IPO with a $100m placeholder amount. It had hired Morgan Stanley, Goldman Sachs, BofA Securities, Cowen and Evercore ISI as underwriters and planned to list on the Nasdaq Global Select Market.
Xpeng, the China-based electric vehicle (EV) manufacturer backed by corporates Alibaba, UCar, Xiaomi, Duowan and Foxconn, went public in an IPO sized at approximately $1.5bn.
It consisted of 99.7 million American Depositary Shares (ADSs), each equating to two common shares, issued on the New York Stock Exchange priced at $15.00 each. The company had planned to issue 85 million ADSs priced between $11 and $13 each. The IPO price will give it a market capitalisation of about $21.3bn. E-commerce firm Alibaba had expressed interest in buying $200m of shares in the offering and consumer electronics producer Xiaomi $50m, while Coatue Management and Qatar Investment Authority were considering $100m and $50m respectively. None confirmed
those purchases.
Xpeng produces smart EVs that use its proprietary autonomous driving technology and in-car operating system. It has released a sports utility vehicle and sports sedan model but made a $113m net loss in the first six months of 2020 from $142m in revenue.
Packaged food producer Dr Oetker paid €1bn ($1.16bn) for Germany-based drink delivery service Flaschenpost in a transaction that allowed cleaning product distributor Vorwerk to exit.
Founded in 2016, Flaschenpost runs an online service that allows users to order beverages for delivery in under two hours to customers across 23 German cities. Home delivery services, and Flaschenpost’s sales, experienced a significant rise in business during the coronavirus pandemic.
Wish, the US-based e-commerce app developer backed by e-commerce group JD.com, went public in an IPO on the Nasdaq Global Select Market sized at just over $1.1bn. The offering consisted of 46 million class A shares priced at the top of the IPO’s $22 to $24 range, a price that reportedly valued the company at roughly $17bn on a fully diluted basis.
Founded in 2010, Wish operates a mobile commerce platform with more than 100 million monthly active users across more than 100 countries. It posted a $176m net loss for the first nine months of 2020, from approximately $1.75bn in revenue.
Li Auto, a China-based EV producer backed by mobile services portal Meituan Dianping, steel producer Shougang, digital media company Bytedance, InTime, insurance firms Taiping and Ping An as well as pump and gardening equipment maker Leo Group and priced its shares at $11.50 to raise $1.1bn in its IPO. The company issued 95 million ADSs, representing 190 million ordinary shares. Shares opened at $15.50 on the first day of trading and reached a high of $17.50, before closing at $16.46.
Mobile services portal Meituan Dianping and digital media company Bytedance also committed to purchasing $330m and $30m in a concurrent private placement. Founded as Chehejia in 2015 and also known as CHJ Automotive and Lixiang, Li Auto produces smart sports utility EVs.
Russia-based online marketplace Ozon went public on the Nasdaq Global Select Market in a $990m IPO that gave an exit to diversified conglomerate Sistema and e-commerce firm Rakuten. The company increased the number of American depositary shares – each representing a common share – in the offering from 30 million to 33 million and priced them at $30 each, comfortably above the $22.50 to $27.50 range it had set.
Sistema and another Ozon shareholder, private equity firm Baring Vostok, are each buying $67.5m of additional shares through a concurrent private placement. The IPO price valued it at approximately $5.57bn.
Ozon operates an e-commerce platform with 50 million monthly active users that connects buyers of a wide variety of consumer goods to a network of 18,000 merchants. It increased revenue from $39.1m to $66.6m year on year in the first nine months of 2020, with its net loss narrowing slightly to $12.9m.
Israel-based urban mobility app developer Moovit confirmed an acquisition by its existing shareholder, semiconductor producer Intel, for a total consideration of $900m, allowing a host of corporate investors to exit, including consumer electronics supplier Hanaco and automotive manufacturer BMW. Intel paid $840m, net of the equity gain of its corporate venturing unit Intel Capital.
Founded in 2012, Moovit has built a real-time transit data app for users that pulls in public traffic data and user-generated updates to calculate the most efficient routes. It also offers third-party business access for clients such as municipalities or ride-sharing providers.
The service currently covers 3,100 cities in 102 countries, where it has attracted more than 800 million users – a sevenfold increase over two years. Intel will integrate Moovit’s enterprise platform into its autonomous driving technology subsidiary Mobileye.
Kingsoft Cloud, the cloud services subsidiary of China-based enterprise software producer Kingsoft, priced its shares at $17 to raise $510m in its IPO.
The company increased its offering from 25 million ADSs – each representing 15 ordinary shares – to 30 million ADSs and had a market cap of more than $4.7bn. The company had set a price range of $16 to $18. Shares rose 27% on the first day of trading on the Nasdaq Global Select Market.
Founded in 2012, Kingsoft Cloud runs a cloud infrastructure business focused on enterprise cloud computing and artificial intelligence of things services. Kingsoft and smartphone manufacturer Xiaomi had expressed an interest in purchasing $25m and $50m in the stock offering, respectively, while Carmignac Gestion was considering the purchase of $50m worth of shares. Kingsoft Cloud did not provide an update.
Fitness apparel brand Lululemon agreed to pay $500m to buy one of its portfolio companies, US-based fitness video subscription service Mirror, which will gain access to additional content created by athletes who signed up to be brand ambassadors for Lululemon.
The service has developed an interactive home gym setup that consists of a wall-mounted, partially reflective viewing screen that broadcasts live and on-demand fitness classes as well as hosting one-on-one sessions. The device can also be connected to wearables such as the Apple Watch to monitor a user’s heart rate.
China-based artificial intelligence chipmaker Cambricon Technologies priced a RMB2.58bn ($368m) initial public offering, giving achieve exits for Alibaba, Lenovo, AI technology provider iFlytek and robotics technology provider Tuling Century.
The offering consisted of 40.1 million shares issued on the Shanghai Stock Exchange’s Star Market at a price of RMB64.39 each. The allocation made up about 10% of Cambricon’s shares, according to the IPO prospectus.
Cambricon provides AI processors for use in mobile devices and servers. One of its largest customers had traditionally been electronics manufacturer Huawei, though the latter company began making its own AI chips in 2019. The company’s revenues more than tripled to about $63.5m in 2019, though its net loss increased considerably from $6m to about $169m over the same period.
Global Corporate Venturing also reported several exits of emerging consumer-related enterprises that involved corporate investors from the same as well as other sectors.
Vayner/RSE, the venture capital firm backed by creative agency VaynerMedia, exited US-based alcohol delivery service Drizly, which agreed to be bought by ride hailing service Uber for $1.1bn. Drizly operates an e-commerce platform that offers beer wine and spirits to customers in 1,400 towns and cities through partnerships with local shops, allowing users to schedule delivery. It will operate as a subsidiary of Uber once the transaction closes. Uber already delivers food from local restaurants to customers through its Uber Eats subsidiary, and has moved into areas such as groceries and prescription medicine.
Tencent scored an exit when China-headquartered lifestyle product retailer Miniso floated on the New York Stock Exchange in a $608m IPO. The flotation consisted of 30.4 million ADSs, each representing four common shares, priced at $20.00 each, above the $16.50 to $18.50 range the company had set for the offering. Its shares closed at $20.88 on the first day of trading. Miniso sells a range of affordable goods including toys, accessories, snacks, cosmetics and small electronics across a network of 4,200 stores spanning some 80 countries, roughly 2,500 of which are located in China. The IPO proceeds will fund the expansion of its stores and investment in its logistics and IT capabilities.
Food delivery service Delivery Hero revealed it has bought InstaShop, a United Arab Emirates-based online grocery delivery platform backed by corporates internet company Jabbar Internet Group and e-commerce marketplace Souq, for about $360m. The transaction valued InstaShop at $360m and consists of $270m in cash that was provided upfront, together with additional payments dependent on the service hitting growth milestones post-acquisition.
Founded in 2015, InstaShop runs an on-demand grocery delivery service across the United Arab Emirates, Egypt, Qatar, Bahrain and Lebanon. It has partnerships in place with some 1,500 vendors and brings in goods in as little as 45 minutes. The company will operate under its existing brand as an independent subsidiary of Delivery Hero, which is now present in 44 countries.
US-based social fashion marketplace Poshmark floated on the Nasdaq Global Select Market in a $277m IPO that will enable homebuilder JF Shea to exit. The offering consisted of 6.6 million shares priced at $42 each, well above the $35 to $39 range Poshmark had set and valuing it just above $3bn.
Poshmark’s online platform enables users to browse, buy and sell fashion items in addition to interacting with each other and sharing favourite items. It generated a $20.9m net profit in the first nine months of 2020 from sales of nearly $193m.
US-based mobile commerce platforms Letgo and OfferUp agreed to merge in a deal fuelled by a $120m funding round led by classified listings operator OLX Group. OLX Group, a subsidiary of e-commerce and media group Naspers’ internet assets division, Prosus, is an existing investor in Letgo and will take a 40% stake in the merged business. The $120m round included existing OfferUp investors including venture capital firm Andreessen Horowitz and private equity firm Warburg Pincus.
Founded in 2015, Letgo operates an online platform that enables users to buy and sell goods to each other. The service is tailored for mobile use with large photos of each item and enhanced chat functionality.
Cosmetics maker Pola Orbis agreed to acquire a portfolio company, Japan-based beauty supplement producer Tricot, for ¥3.8bn ($36.2m). Pola Orbis held a 10.56% stake in Tricot, and bought 59.83% from chief executive Hanabusa Kana, 20% from venture capital firm XTech Ventures and 9.61% from three unnamed individuals.
Founded in 2018, Tricot runs Fujimi, a personalised beauty care service that selects cosmetics tailored to each customer. Pola Orbis will provide its research and development expertise to help Tricot accelerate growth in a bid to strengthen synergies between the two. Tricot will also contribute its entrepreneurial experience and speed to the group.
Kingfisher, the retail group that owns DIY product chains B&Q and Screwfix, agreed to purchase France-based home improvement services marketplace NeedHelp for close to €10m ($12m). The deal involved Kingfisher acquiring 80% of the company. NeedHelp founder Guillaume de Kergariou has reinvested some of the proceeds of the sale into buying back a 20% share. Founded in 2014, NeedHelp provides an online portal that connects customers with professional tradespeople who provide home improvement services. It operates in France, Switzerland, Germany, Belgium, Austria and Netherlands. Needhelp will operate as a separate business but will support B&Q’s home improvement customers and will work with Screwfix’s trade professional customer base.
Funding initiatives
For the period between March 2020 and February 2021, corporate venturers and corporate-backed VC firms investing in the consumer sector secured $3.35bn in capital via 51 funding initiatives, which included 24 VC funds, 15 launched or refunded venturing units, 10 accelerators, one incubator and one other initiative.
On a calendar year-to-year basis, the number of funding initiatives in the consumer sector went down slightly from 56 in 2019 to 51 registered by the end of last year. Total estimated capital, however, plummeted from $15.5bn in 2019 down to $4.43bn in 2020, though the TA XIII fund from 2019 was an outlier.
B Capital Group, the US-based venture capital firm affiliated with consulting firm Boston Consulting Group, closed its second fund at $820m.
Founded in 2014, B Capital targets growth-stage deals and pursues a portfolio management strategy that involves connecting its companies to corporates which can help them scale, through a network provided by BCG. The firm invests between $10m and $60m per round, at series B to D stage, and its areas of interest include consumer and enterprise software as well as financial, healthcare, transportation and logistics technology.
The firm said the close brought the total amount of assets under management to $1.44bn. It closed an oversubscribed first fund at $360m in early 2018.
Legend Capital, the venture capital firm spun off by China-based conglomerate Legend Holdings, closed its latest fund, LC Fund VIII, at $500m. The limited partners for the vehicle included undisclosed existing LPs as well as corporate investment funds, sovereign wealth funds, family offices and private pension funds. Atlantic-Pacific Capital was placement agent for the fundraising.
Founded in 2001, Legend Capital now oversees about $8bn of assets under management from offices in Beijing, Shanghai, Shenzhen Hong Kong and Seoul. The firm focuses on growth-stage deals in areas such as consumer internet, enterprise software, advanced manufacturing healthcare and deep technology.
Japan-based insurance firm Nippon Life plans to invest a total of ¥30bn in companies and funds that are addressing social and environmental issues. Sectors under consideration include food, healthcare and technologies intended to mitigate climate change. The firm will begin with a commitment of roughly $19m to an impact investment fund run by private equity group TPG that is concentrating on deals for medical technology developers. It intends to begin making impact investments directly by 2023 and plans to provide more than $90m per year.
Nippon Life already operates a venture capital subsidiary, Nissay Capital. Its investments have included Raksul, a printing services provider with a market cap of about $850m, and household services marketplace Minma, which raised more than $36m in January.
Blue Horizon Ventures, a Switzerland-based venture capital fund targeting the food industry, closed its first fund at €183m ($220m), with limited partners (LPs) including fragrance producer Givaudan and bread maker Grupo Bimbo. Other LPs in Blue Horizon Ventures I include Korys, the family office behind retailer Colruyt Group, as well as European Investment Fund, Wire Group’s Private Markets Funds, Sigma and Be8Ventures.
Founded in 2018 by serial entrepreneurs and investors Roger Lienhard and Michael Kleindl, Blue Horizon invests across technology areas such as alternative proteins, synthetic biology, cultivated food (cellular agriculture), smart packaging and food waste. The fund’s 16 deals so far include it a $135m round for vegetarian food producer Livekindly Collective in October 2020 and the $55m first tranche of cultured meat developer Mosa Meat’s series B round.
Philippines-based diversified conglomerate Ayala closed a $180m fund with an anchor commitment from the corporate itself and contributions from its subsidiaries AC Energy, AC Industrials, AC Ventures and BPI. Telecommunications firm Globe Telecom also joined the roster of limited partners (LPs). The Active Fund originally had a target of $150m and its final size makes it the largest venture fund from the Philippines.
The Active Fund – (an acronym for Ayala Corporation Technology Innovation Venture) – is managed by Kickstart Ventures, the investment arm of Globe Telecom. It is Ayala’s first investment vehicle. The fund will invest between $2m and $10m in companies internationally, targeting series A to D rounds in industries such as e-commerce, fintech, proptech and construction technology. It will also look for opportunities around urban challenges in emerging countries throughout Asia, considering startup focused on areas such as raising blue-collar workers’ skillsets and improving access to scarce but vital resources such as water.
China-based VC firm BA Capital closed a second yuan-denominated fund at RMB1bn ($147m) with the help of unnamed internet and consumer products firms. 60% of the capital was provided by unnamed funds of funds.
BA Capital exclusively focuses on dealmaking in the consumer products and media sectors, having backed a total of 15 brands since making its debut in 2016. The move came weeks after BA Capital had raised a $100m dollar-dominated fund earlier in September 2020. Details of this earlier vehicle could not be confirmed. BA Capital’s portfolio encompasses bubble tea bar chain Heytea, yoga products supplier Simple Love and beverage company Yuan Qi Sen Lin.
Cosmetics manufacturer Guangdong Marubi Biotechnology formed a RMB1bn ($142m) industrial fund with industrial investment management firm Jinding Capital. Jinding Capital is general partner for the vehicle, Marubi Jinding Cosmetics Industrial Fund Management, while Marubi has taken a limited partner position.
Founded in 2002, Marubi markets a range of cosmetic and skincare products including facial creams and masks but is best known for its eye serums and creams. It also operates a Japan-focused business called Marubi Tokyo. The fund will invest in skincare and beauty brands as well as supply chain technology and services providers. It is expected to support Marubi’s and help boost its supply chain capabilities.
Japan-based venture capital firm Genesia Ventures closed its second fund at roughly ¥8bn ($76.3m), with several corporates as LPs. Canal Ventures, Canon Marketing Japan, Hakuhodo DY Ventures, Mizuho Capital, Oriental Land Innovations and TFHD Open Innovation Program invested on behalf of IT services firm Nihon Unisys, imaging technology producer Canon, marketing firm Hakuhodo DY, financial services firm Mizuho Financial Group, theme park operator Oriental Land Company and property developer Tokyu Fudosan Holdings respectively.
Printing services firm Dai Nippon Printing, digital media company Gree, retailer Marui Group and internet company Mixi were also among the LPs, as were brokerage Aizawa Securities, leasing services firm JA Mitsui Leasing, state-owned Development Bank of Japan and Mizuho Financial Group’s Mizuho Bank and Mizuho Securities Principal Investment subsidiaries.
Founded in 2016, Genesia Ventures invests in and partners seed and early-stage companies that are based in Japan and Southeast Asia. The second fund will have a similar focus to its predecessor and will concentrate on e-commerce, software-as-a-service, augmented and virtual reality technologies among others.
Canada-based District Ventures Capital closed its first venture capital fund at C$100m ($70.8m) with $24.8m from agriculture-focused credit provider Farm Credit Canada (FCC). District Ventures Capital is targeting investments in food, beverage and wellness technology developers. It has a 27-strong portfolio including coconut-based ice cream brand NadaMoo and coffee chain Balzac’s Coffee Roasters. The vehicle’s limited partners also include BDC Capital, a subsidiary of the state-owned Business Development Bank of Canada.
Korys, the family office behind the France and Belgium-based retailer Colruyt Group, and Mérieux Equity Partners, the asset management arm of the Institut Mérieux holding company, set up joint funds targeting companies in the healthcare and nutrition sectors in Europe and North America.
OMX Europe Venture Fund raised more than €60m from the pair and third party subscribers and is targeting a final close at €90m. It will be managed by Mérieux Equity Partners in Europe, with the operational support of Korys’ Life Science team as a key adviser. The US-based OMX Ventures team of Craig Asher, Nick Haft and Dan Fero, with the support of senior adviser Paul Conley, have raised more than $66m for OMX Ventures Fund I, which is targeting $100m in a final close. The US fund has a similar investment strategy to, and privileged right of co-investment with, OMX Europe. OMX refers to a field of study in biology ending in -omics, such as genomics, proteomics, metabolomics or microbiomics.
Universities
Over the past few years, we reported various commitments to university spinouts in the consumer sector through our sister publication, Global University Venturing. By the end of 2020, there were 35 rounds raised by university spinouts, up from the 27 and 31 registered in the previous two years. The level of estimated total capital deployed last year stood at $1.24bn, nearly double the estimated $635m in 2019.
Impossible Foods, a US-based meat substitute developer founded by a Stanford University researcher, completed a $200m series G round led by hedge fund Coatue Management. Singaporean government-owned investment firm Temasek, hedge fund XN and Mirae Asset Global Investments, the asset management arm of financial services group Mirae Asset Financial, also took part in the round. The round reportedly increased the company’s valuation from $3.6bn to more than $4bn. Founded in 2011, Impossible Foods markets gluten-free meat substitutes bioengineered from plants. They contain no animal hormones, antibiotics or cholesterol. The technology is based on research by founder and chief executive Patrick Brown, then a professor of biochemistry at Stanford University.
Whoop, the US-based wearable health tracker developer spun out of Harvard University’s Innovation Lab, raised $100m from investors at a $1.2bn valuation. SoftBank’s Vision Fund, IVP, Two Sigma Ventures, Accomplice, Collaborative Fund, Thursday Ventures, NextView Ventures, Promus Ventures, Cavu Ventures and D20 Capital all took part in the round.
Whoop has created a lightweight and waterproof wearable strap that provides detailed data on users’ fitness, sleep and physical recovery plus personalised coaching through a subscription service. The funding has been earmarked for expanding marketing efforts in countries such as France, Germany, Spain and Australia, increasing headcount and strengthening its technology.
Mosa Meat, a Netherlands-based artificial meat product spinout of Maastricht University, extended its series B round to $85m through a $10m third tranche of funding backed by aquafeed product producer Nutreco. Blue Horizon Ventures led the overall series B round, while Jitse Groen, CEO of food deliver marketplace Just Eat, also invested in the extension. In December 2020,
Mosa Meat increased its series B round to $75m with a $20m tranche raised from conglomerate Mitsubishi Corporation and venture capital firms Target Global, ArcTern Ventures and Rubio Impact Ventures. M Ventures, a corporate venturing unit of Germany-based pharmaceutical firm Merck, meat processor Bell Food Group and undisclosed investors participated in the $55m first tranche in September 2020.
Founded in 2016 and is developing technology to produce artificial meat products grown from the cultivated cells of cows, removing the need to slaughter livestock. Mosa Meat will use the financing to extend its pilot production facility, develop an industrial-scale production line and hire new staff.
People
South Korea-listed conglomerate Samsung shook up its two US-based corporate venturing units with Young Sohn retiring and Sean Kae coming in as acting head of Samsung Strategy and Innovation Center (SSIC) and David Lee joining as head of Samsung Next in early 2021.
Sohn retired as president and chief strategy officer (CSO) of Samsung Electronics but will continue as chairman of Harman, the autonomous driving subsidiary acquired by the company for $8bn, and strategic adviser to its largest division, Samsung Electronics, and chairman of the GCV Leadership Society’s advisory board.
Kae, now executive vice-president of strategy and corporate development, joined SSIC in 2019 to help Sohn as CSO “define and expand the organisation’s mission and focus areas for new innovation and investment”. Kae added on his company profile page: “I am responsible for identifying and investing in Samsung’s future growth engines and the creation of new businesses to sustain the Samsung Group’s growth trajectory for the next decade.” SSIC runs corporate venturing unit Samsung Catalyst under managing directors Francis Ho and Shankar Chandran, reporting to the company’s device solutions division.
Samsung Next focuses more on the consumer electronics and mobile business side, and looks for startups with transformative software and services. Next runs a separate investment unit in Los Angeles, California, and hired venture capitalist David Lee, after the departure of Gus Warren in 2020 to set up Bindle Systems, the developer of a covid-19 health status tool.
Lee co-founded venture capital firm Refactor Capital in 2016 with former Andreessen Horowitz investor Zal Bilimoria, who is now looking to raise $50m for Refactor’s third fund, according to a regulatory filing. Lee had previously been a managing partner at Ron Conway’s VC firm, SV Angel.
Erin VanLanduit, former managing director of food provider Tyson’s $150m corporate venturing unit, joined US-headquartered agribusiness Cargill as head of corporate ventures. Cargill made a series of strategic investments in companies such as pea protein maker Puris in the 2010s under Peter Hawthorne, having previously spun off its Black River investment unit. VanLanduit, a GCV Powerlist 2020 award winner, had spent a year at Tyson Ventures and was an observer on six of its portfolio companies. She had previously been director of business development for consumer product manufacturer SC Johnson’s New Ventures unit.
Barbara Guerpillon was appointed as the inaugural global head of Dole Ventures, the strategic investment arm of Singapore-based fresh food supplier Dole, which is itself owned by conglomerate Itochu.
The appointment came after Dole Ventures established its Sunshine for All Investment Fund, a $2m unit that will target strategic deals intended to help reduce food waste and improve nutrition. Guerpillon spent five years as director of consumer products group Unilever’s Foundry Asia up to October 2020. She is credited with delivering 120 collaborative projects with startups, resulting in nine product innovations for Unilever.
Natalie Hwang, formerly head of Simon Ventures, US-based Simon Property Group’s corporate venturing unit, launched Apeira Capital Advisors, a growth equity and tactical opportunities fund focused on disruptive distribution technology. It was reportedly targeting $200m and, having seen the company’s documents, said it would use “hedge fund principles and practices” to achieve returns from high-growth companies whose valuations have soared too high. Hwang worked at alternative asset manager Blackstone Group where she worked with hedge fund startups. and joined Simon in August 2015, helping to form the unit. She was a GCV Powerlist award winner from 2017 to 2019 and was sole managing director and head of the unit. Her board roles included Foursquare and FabFitFun, and other investments included Bird, Bustle Digital Group, Grailed, Verishop, MeUndies and Brud.
Hanns Anders, investment manager at iRobot Ventures, the corporate venturing unit of iRobot, joined Amazon’s Alexa Fund. In a statement, Anders, a GCV Rising Stars award winner in 2016, said: “I am grateful to have been able to support such a talented group of founders and colleagues. I am proud of the strategic and financial value we delivered, and wish the portfolio and iRobot the best.”
He had been one of the most active robotics and artificial intelligence investors while at iRobot, which he joined in 2015 after venture roles at Claremont Creek Ventures and Huron River Ventures. Anders’ deals had included Synthesis AI, Hasty.ai, Jargon, Labrador Systems, Matterport, Osaro, Sense, Intuition Robotics, 6 River Systems and Escher Reality.
Jeff Blackburn, senior vice-president for business development at Amazon for nearly 17 years, joined venture capital firm Bessemer Venture Partners as a partner. Blackburn oversaw Amazon’s corporate venturing investments and more than a hundred acquisitions. He also Amazon’s television and movie studio, music streaming service and advertising unit. Bessemer’s deals in recent years have included online streaming platform developer Twitch, which Amazon acquired for $970m in 2014.
Prosus Ventures, the CVC arm of Euronext-listed internet and e-commerce group Prosus, hired Sachin Bhanot to lead its investment activities in Southeast Asia. Spun off by South Africa-headquartered media and e-commerce group Naspers, Prosus has also taken on the portfolio of its largest investment vehicle, Naspers Ventures. Based in Singapore according to his LinkedIn profile, Bhanot was previously a principal at B Capital Group, the venture capital firm backed by consulting firm Boston Consulting Group that was set up by Facebook co-founder Eduardo Saverin, for roughly two years.
Guilherme Lima, former head of corporate venture at Brazil-based consumer electronics manufacturer Elsys, has become a partner at local VC firm Astella Investimentos. Lima had been responsible for managing and running Elsys’ corporate venture programme for 10 months to April 2020. He had been recruited from accelerator ACE, where he was an investment manager behind more than 100 deals.
Sweden-based health and hygiene technology provider Essity has unveiled a strategic venture capital unit headed by Marie-Laure Mahé. Essity Ventures said: “By partnering with startups, we aim to develop new business models, digital solutions and digitally enabled products, while accelerating our journey towards circularity and sustainability.”
Corigin Ventures, the VC firm sponsored by US-based real estate developer Corigin, closed its second fund at approximately $36m. The firm hired Aubrie Pagano as a partner and promoted Daniel Fetner to principal and Eric Schoenbach to associate. It targets consumer and property technology developers in the US and Canada. It invests $100,000 at pre-seed stage and provides between $500,000 and $1.25m for seed-stage deals, with additional capital reserved for follow-on investments.
US-based retail chain Central Garden and Pet set up a $20m corporate venturing unit under new hire Jon Balousek, a former executive vice-president at consumer goods producer Clorox. Under Balousek as president of corporate development, Central Ventures will target North American startups in the garden and pet industries concentrating on sustainability, health and wellness, and digitally-connected products and services. The move formalises Central’s existing venture investments over the past five years, in companies such as Casco Pet, Lucy Pet and Back to the Roots.
Consumer subsectors
Fashion and apparel
Amy Sun, partner at VC firm Sequoia, has a nice line in The Atlantic magazine’s latest issue: “The age of conformity is over.” Hence the oxymoronic investment thesis behind fashion group Dolls Kill – rebellion against the mass market has mass-market appeal.
But as the Atlantic’s Rachel Monroe noted: “The ultra-fast fashion brands have designed a shopping experience that makes the consumer feel as if the clothes magically appear out of nowhere, with easy purchasing and near-immediate delivery.”
With Americans buying an item of clothing every five days and social media encouraging people to look as polished as movie stars, whether at the gym or at home, demand for fashion remains strong.
Last summer, private equity firm General Atlantic acquired a 21% stake in UK-based Gymshark for an undisclosed sum but one that valued the label at more than £1bn ($1.4bn) even when gyms were closed due to the pandemic.
But fashion’s environmental costs are high, at 4% of carbon emissions and 20% of wastewater. This is why startups, such as Anne-Marie Tomchak’s ShareJoy, are trying to use the circular economy and secondhand clothes retailers, such as RealReal, Vestiaire, Vinted and ThredUp, have raised hundreds of millions of dollars beyond the search for new company successes, such as Dolls Kill.
Given that global production of new clothes doubled between 2000 and 2015, with 60% disposed of each year, according to consultancy firm McKinsey, then it might be time to dust off and repurpose the old adage that where there is muck, there
is brass.
Hygiene and beauty
The UK’s largest initial public offering (IPO) since 2015 took place in September when The Hut Group (THG) raised £1.88bn ($2.7bn) on its stock market debut, giving it a valuation of close to £5.4bn.
The group runs more than 150 websites, such as fitness and bodybuilding supplements site My Protein and the Look Fantastic beauty products range. As a technology platform, THG leverages the supply chain to meet the demand for fashions becoming viral on social media.
Stars on these platforms, such as the Kardashian family, have reaped the rewards. Following in the footsteps of younger sister Kylie Jenner’s $1.2bn deal, Kim Kardashian West last year sold a 20% stake in her cosmetics line, KKW Beauty, to beauty products group Coty for $200m.
Peter Harf, executive chairman at Coty, at the time said: “Kim is a true modern day global icon. She is a visionary, an entrepreneur, a mother, a philanthropist and through social media has an unparalleled ability to connect with people around the world. This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”
Plenty of VCs have taken note, while corporations, such as Unilever, Henkel and Evonik, have used CVC to strike deals across the value chain.
Evonik’s deals, for example, cover both startups trying raw materials in beauty products, such as Biosynthetic Technologies, JeNaCell and NutraFerm, and downstream packaging and customer recommendation engines, such as Velox and MySkin.
The head of corporate venturing at Henkel Beauty Care, Gesa Geissel’s deals included Youtiful and Purish in 2019. At the time she said: “Digital direct-to-consumer relationships are becoming increasingly important as they allow connecting with consumers to improve consumer experience and capture trends early.”
On the cleaning products and hygiene, Reckitt Benckiser’s corporate venture capital unit, RB Ventures, has backed laundry and dry-cleaning startup Oxwash, while Kärcher New Ventures’ deals include Skyline Robotics for high-rise buildings.
And this focus area is leading to exits. Henkel, Robert Bosch and Rocket Internet last year exited the on-demand laundry service Laundrapp in an acquisition by
Inc & Co.
E-commerce
#justsaynotofomo is a hashtag that has yet to take off fully but venture capitalist Michael Jackson’s latest post on European startups raising $20m with no deck shows “Silicon Valley really is a state of mind now. [disbelief emoji].”
He added: “In the latest outbreak of investor FOMO [fear of missing out], Europe’s VCs are falling over each other to invest in this season’s startup craze: speedy grocery delivery startups.”
Even the banks are getting involved. Switzerland-based bank UBS led the $5m series A round for Urb-E, a US-based last-mile urban delivery service based on bike courier.
Data provider Pitchbook highlighted a handful of others. Instacart hauled in $265m at a $39bn valuation, “a huge uptick from the $17.7bn valuation it landed just five months ago,” it said.
Others included the delivery robot unit of Postmates, which Uber acquired last year and renamed Serve Robotics, Brazil-based Loggi $200m at a valuation of about $2bn, Deliverr, which brought in $170m in combined debt and equity funding, the Czech Republic’s Rohlik about $226m, Germany-based Flink’s $52m seed round and Dutch competitor Crisp’s grocery delivery service.
Perhaps the biggest player in Europe’s food delivery market remains Deliveroo, a UK-based company that has previously raised well over $1bn, according to PitchBook data, and is preparing its flotation in London. It, however, faces competition from Dija, which is now offering 10-minute delivery slots, and a host of others tracked by UKTN. Add in investor concerns over its employee payments and its share price has struggled following last month’s £1.5bn ($2.1bn) IPO.
South Korea-based ecommerce and delivery powerhouse Coupang is also planning its initial public offering to raise $3.4bn – almost the same amount as DoorDash’s IPO proceeds in December, Pitchbook noted.
Earlier in the year, India’s Zomato raised $250m at a $5.4bn valuation; Jüsto raised $65m for grocery deliveries in Mexico and Latin America; Good Eggs, a US-based grocery delivery startup, banked $100m; Wolt pulled in $530m for food delivery for Finland; and Uber agreed to
pay $1.1bn for alcohol delivery startup Drizly.
Food and beverages
One billion people work in agriculture and, since 1961, they have delivered an increase of more than 30% in food supply per person.
But climate and non-climate stresses are impacting the four pillars of food security (availability, access, utilisation, and stability). This is particularly intense in China, which was already grappling with pressures on agricultural water and land use around the country.
But as professor of wildlife ecology and conservation, Robert Montgomery, notes, the traditional approach to land use and population growth has been to look at the horizontal rather than potential for vertical development.
Montgomery – head of the world’s first Conservation Venture Studio at University of Oxford in partnership with Global Accelerated Ventures and the university’s research commercialisation arm, Oxford University Innovation – is a partner for the next GCV Symposium in London on 3-4 November.
Infarm picked up $100m of debt and equity financing to develop its indoor farm systems.
Founded in 2013, Infarm uses cloud-enabled vertical farming technology to operate urban-based indoor farms that produce food more efficiently than traditional agricultural methods. It is planning to expand its production capabilities by building large scale farms expected to cover 500,000 square feet by 2025.
But asking the tough questions about how to develop and what for remains a challenge. Too often in conservation, land is ring-fenced for a specific purpose rather than finding ways to blur or blend the requirements of people and nature.
Innovation remains a potential route out.
Consumer electronics and physical consumer products
People’s desire to stay fit and healthy in lockdown has led to a surge of interest in connected fitness companies. It was led by Peloton’s flotation and Google’s purchase of listed fitness wearables maker Fitbit for $2.1bn just before the pandemic. In September, Tonal raised $110m from Amazon’s Alexa Fund and VC investors, while athletics clothing brand Lululemon acquired peer Mirror for $500m in June.
But their success has masked a decline in overall venture engagement with consumer electronics after high-profile flame-outs, such as Magic Leap, virtual reality wearables that raised over $2.6bn, and Essential, a mobile phone and device maker that raised $330m across two early stage rounds.
Crunchbase, even before covid-19, put one of the issues down to “the growing dominance of the ‘Big Four” – Apple, Samsung, Google and Amazon. These corporate giants are cornering a growing number of consumer electronics categories, leaving startups hard-pressed to compete.
Carl Benedikt Frey, director of the future of work programme at University of Oxford, said large corporations are essential for progress, but only when they let startups roam free in MIT’s Technology Review magazine. “Lately, the giants have gotten better at edging out smaller companies – a terrible omen for
the future of progress.”
But improvements in the speed and reliability of 5G will enable live streaming, gaming, mixed-reality and cloud or edge computing and drive interest in hardware if combined with community and immersive experiences.After all, probably the dominant consumer electronics success story of the past decade is Tesla.
Bill (Zhaoyu) Qian, head of corporate strategy and investments, JD Cloud
Bill Qian heads the corporate venture capital (CVC) activities for China-based e-commerce firm JD.com’s cloud technology subsidiary, JD Cloud.
When Qian joined JD in 2015 as head of crowdfunding strategy, he concentrated his efforts on equity crowdfunding as part of a year-long stint, helping the group raise more than RMB1.1bn ($162m) for 89 startups.
Qian helped found the early-stage venture capital vehicle JD Innovation Ventures – now called Qianshu Capital – a year later. He then took up the head of cross-border mergers and acquisitions role in February 2017 before making his way up to general manager of CVC later the same year.
JD.com appointed Qian head of CVC in January 2019 before adding business strategy duties in April 2020. He assumed his current role in January 2021, where he oversees investments in enterprise services, internet-of-things and consumer internet technologies.
Jesús García, executive director of venture capital, Arca Continental; Héctor Shibata, director of investments and portfolio, AC Ventures
Jesús García serves as the executive director of venture capital of Mexico-listed beverage distributor Arca Continental, who oversees the corporate venturing fund, AC Ventures (ACV), which is being managed by the unit’s director of investments and portfolio, Héctor Shibata.
The fund invests directly in companies operating in the financial technology, retail technology, advanced analytics, logistics, distribution and supply chain vertical. It also makes limited partner commitments to VC funds.
ACV’s portfolio companies include Colombia-based logistics technology startup LiftIt, India-based retail tech developer in LoveLocal (formerly m.Paani) and Sonect, a Switzerland-based company that enables businesses to act as virtual ATMs by dispensing cash to members of the platform from their registers, and Zippin, a US-based autonomous retail
system provider.
Comprehensive solutions for fintech, mobility, smart logistics, connectivity and cybersecurity issues created in Mexico are still scarce, according to García, who added: “We have many opportunities and if we join the corporates with innovative partners, we can create revolutionary solutions that have a real impact on the world.”
Annual survey results
Every year, Global Corporate Venturing asks the industry questions about investment priorities, strategies and fit with the corporate. We have broken out the consumer sector answers and compared them with the overall answers.
The GCV Analytics definition of the consumer sector encompasses e-commerce platforms, food and beverages and related services, fashion and apparel, hygiene, beauty and fitness, consumer electronics and other physical consumer products.