Global Corporate Venturing has just published its “2013: Full Year Data Analysis” report, covering 1,068 investment deals worth $19.6bn and 98 exits worth $9.8bn. This was a slight increase compared to 2012, in terms of value, when 1,067 investments were recorded, worth a total of $18.6bn. However, the number of exits were fewer compared to 2012, when 247 exits were recorded, worth $36.2bn – although Facebook’s IPO accounted for more than half of 2012 total exit values. Highlights of the report include
- The three most active corporate venturing investors, by number of investments, were Intel (146), Google (78) and Qualcomm (69). These ‘Big 3’ were followed by a large pack of corporate venturing investors, but with deal totals less than half that of Qualcomm.
- The three most active, venture capital co-investors, by number of investments and exits, were Kleiner Perkins Caulfield & Byers (40), New Enterprise Associates (28) and Andreessen Horowitz (27).
- The three largest sectors for corporate venturing deals, counting both investments and exits, were IT (366), Health (189) and Consumer (172).
- The three top countries for corporate venturing deals, in terms of target or portfolio company, were USA (766), Japan (48) and Germany (46).
- The top exit in 2013 was Waze, backed by Qualcomm Ventures and sold to Google for $1.3bn.
- The top investment in 2013 was 360Buy, a Chinese ecommerce site, securing a $700m round from investors including corporate-backed Digital Sky Technologies.
- The top five fundraisings/allocations for corporate venturing funds/units were LVMH (L Capital Asia 2 – $950m), SAP (SAP Ventures II – $651m), Tata (Tata Opportunities Fund – $600m), Unilever (Unilever Ventures – $450m) and Dell (Strategic Innovation Venture Fund – $300m).
Of those investments where the actual round was identified and disclosed, the greatest number of deals involved series B (216 deals), followed by series A (196) and series C (115). Amongst the top 20 corporate venturing investors, Google was most heavily involved in early stage rounds – seed funding and series A – while Intel led the way on series B, C and D rounds. Notably, media/internet companies were also involved more in early stage investments – Bertelsmann, CyberAgent and AOL/Crunchfund – while at the later stages, SAP was prominent. The top three in each round were:
- Seed: Google, Bertelsmann and CyberAgent.
- A: Google, Qualcomm and AOL.
- B: Intel, IDG and Google.
- C: Intel, Qualcomm and Comcast.
- D: Intel, GE and SAP.
- E & Later: SAP, GE and Intel.
- Exits (including IPO): Intel and Google,AOL and Cisco.
What the “2013: Full Year Data Analysis” report does not fairly reflect, which should be noted, is the activity of incubators and accelerators, both existing and new. In 2013, Microsoft Ventures and Telefónica’s Wayra were amongst the most active, directly sponsored incubators/accelerators for early stage start-ups.
Going forward into 2014, the prospect of “tapering” by the US Federal Reserve – the gradual retreat from quantitative easing (QE) – hangs over the global economy. Already in 2014, emerging markets currencies have taken a tumble, and the danger is that this develops into a ‘negative feedback loop’. It is difficult to predict how any global, economic volatility may affect corporate venturing. However, industry lobbyists in 2013 – at least in Europe – were busy pushing to create a level playing field for corporate venturing investment, in terms of taxation and accounting treatment, and unleash those balance sheets in backing future prospects.
In looking for the business leaders of the future (and future returns on investment, too), it is worth noting emerging, new sectors which attracted corporate venturing investment in 2013, and which may be expected to continue shaping up in 2014. In particular, and in no particular order, sectors or business clusters to note are:
- Cyber-security
- Data storage and networking
- Cloud infrastructure
- Advertising and marketing technology, including mobile and ‘clicks-for-bricks’ retail technology
- E-commerce marketplaces and online platforms, including ‘curated’ marketplaces and home delivery
- Digital health and health records
- Wearable computers
- Databases and big data analytics
- Video and interactive media
- SME enterprise technology tools
- Travel and transport online platforms
- Transport technology
- Education technology
- Mobile and tablet gaming
- Power storage and efficiency
- Retail finance technology
- Rare and orphan disease therapies
- Biotechnology
- Food and agricultural technology
- Smart home devices and the Internet of Things
- Solar energy
- Home/personal services platforms and technology
- Social communication
Some of these sectors – such as cyber-security – reached a certain state of maturity in 2013, with a spate of IPOs, although cyber-security itself now encompasses a broad range of businesses and approaches. Other sectors have seen an acceleration of deals going into the end of 2013 – almost a deal a day in advertising and marketing technology (including investment deals which did not have corporate venture backing). These sectors may yet face the usual, corporate pressures of shake-out and consolidation.