US-listed internet search engine Alphabet unit GV (formerly known as Google Ventures) puts out about $1bn per year and while the group also invests through multiple other corporate venturing units, such as CapitalG, Gradient and Verily as well the parent’s balance sheet, its focus on these other bets have been relatively modest compared to the global opportunities even if its successful exits this year have already been impressive, such as the sale of Plaid to Visa for $5.3bn and flotation of One Medical in a $245m initial public offering that valued the primary care service (formally known as 1Life Healthcare) at $1.7bn.
But over the past decade the outstanding returns have come from China, which is why Jeffrey Li, managing partner at Tencent, was ranked first in the GCV Powerlist 2019. But it is still astonishing to see just how effective the group has been and to keep a close eye on where it is expanding next (hint: more Asia than North America).
Tencent Holdings has backed 160 so-called unicorns, private companies now worth at least $1bn, according to its president, Lau Chiping, at Tencent’s recent 2020 Insight & Forecast Conference. This is a phenomenal strike rate – with another 38 unicorns being born in its portfolio last year – given Tencent has invested in more than 800 companies over the past decade or so and backed another 100 last year.
Tencent first established an investment unit in 2008, leading to the launch of the Tencent Industry Win-Win Fund in 2011 and Li told the GCV Symposium in London last May the group was now effectively putting out almost its entire free cashflow of about $10bn per year into corporate venturing.
