The number of corporate-backed deals in April stood at 145, only slightly down from the 148 funding rounds at the same time last year. Investment value fell by 54%, compared with last year – down to $5.01bn from $11.11bn in April 2016. Only one company, Flipkart, raised a funding round above $1bn.
Both the deal count and total capital invested in corporate-backed rounds were lower in April than they were in previous months this year. There were 162 rounds reported in February and 212 rounds in March. There was also a significant drop in investment value compared with March – $5.01bn, down from $7.74bn, a 35% decrease.
The US hosted 69 rounds of corporate-backed investment, slightly less than half the total dealflow, while China was second with 19 rounds and India third with eight.
The leading corporate investors by number of deals were diversified conglomerate Alphabet, gaming company Gree and technology research and media group International Data Group (IDG). In terms of involvement in the largest deals, Alphabet also topped the ranking along with software provider Microsoft and e-commerce platform eBay.
Deals
The most active corporate investors came from the financial services, IT, media and health sectors.
GCV Analytics data shows that emerging businesses in the health, IT, services and financial services sectors secured the highest number of deals involving corporate venturers. The top deals by round size were not concentrated in any particular sector, however. They ranged from transport and services through consumer and media to IT and fintech companies.
India-based e-commerce firm Flipkart confirmed it had raised $1.4bn in funding from internet group Tencent, eBay and Microsoft at a post-money valuation of $11.6bn. Flipkart runs India’s largest e-commerce marketplace by sales, carrying a wide range of consumer goods. The funding round was announced by the company alongside news that it had acquired eBay India, the local branch of eBay, which will henceforth operate as an independent Flipkart subsidiary.
US-based ride-hailing platform Lyft closed a $600m series G round featuring e-commerce firm Rakuten that valued it at $7.5bn. The round also featured investment firm KKR’s Next Generation Technology Fund, investment firms Janus Capital Group and Baillie Gifford, investment and research management firm AllianceBernstein and pension fund PSP Investments. Founded in 2012, Lyft runs an on-demand ride ordering platform that was responsible for more than 70 million rides in the first three months of 2017, a 142% year-on-year increase.
Property developer China Vanke agreed to invest RMB3bn ($436m) in Lianjia, a China-based online real estate portal also known as Homelink, through a private placement. Lianjia started out in 2001 as a real estate agency but has grown significantly as it developed an extensive property listings platform for China’s property market, which has grown considerably. Vanke’s investment comes as part of an overall strategy to expand its services to include additional services surrounding the second-hand property market.
Media group Advance Publications was among the investors in a $190m series D round for US-based digital education provider EverFi that was led by impact investor Rise Fund, which provided $120m for the round, while TPG Growth, the subsidiary of private equity group TPG that leads Ride, provided $30m, according to Fortune magazine. Main Street Advisors, Allen and Company and private investors including Jeff Bezos, Eric Schmidt and Evan Williams also took part. Founded in 2008, EverFi has built a subscription-based digital learning platform that serves a network of more than 4,200 partners across North America.
China-based vehicle-selling service provider Souche.com secured $180m in a series D round that included online lending platform and wealth management service CreditEase. Private equity firm Warburg Pincus led the round, which included ClearVue Partners, Morningside Venture Capital, Haitong International Securities and undisclosed additional participants. CreditEase made its contribution to the round through its venture capital subsidiary, CreditEase New Financial Industrial Fund. Founded in 2012, Souche supplies software for used-car retailers that manages transactions and operations for them while enabling retailers to keep in contact and work with each other.
Simone Investment Managers, the fund management subsidiary of handbag producer Simone, invested $44m in South Korea-based mobile commerce platform Tmon as part of a $115m round. The round, which closed at a $1.2bn valuation, was filled by unnamed sovereign wealth funds and existing backers, including KKR. Founded in 2010 and also known as Ticket Monster, Tmon runs a daily deal-focused e-commerce platform that features a range of consumer goods from more than 15,000 merchants, with roughly 80% of its transactions taking place on mobile devices.
NetEase Cloud Music, a music-streaming spinout of China-based internet services provider NetEase, closed a RMB750m ($109m) series A round led by media conglomerate Shanghai Media Group. The round valued the company at $1.16bn and included Mango Cultural and Creative Industry Private Equity Fund, which invests on behalf of media company Hunan Broadcasting System’s online video platform Mango Media, as well as private equity fund CICC Jiatai Fund. NetEase Cloud Music was launched in 2013. It had 100 million users in mid-2015, growing to 300 million now.
US-based data analytics platform Looker closed a $81.5m series D round led by CapitalG, the growth-stage investment arm of internet group Alphabet. Sapphire Ventures, the VC firm spun out of software developer SAP, and investment bank Goldman Sachs, as well as VC firms Geodesic Capital, Kleiner Perkins Caufield & Byers, Meritech Capital Partners and Redpoint Ventures also took part in the round. Founded in 2012, Looker has developed analytics technology that allows enterprise users to gain insight into large data sets.
Technology and trading firm Susquehanna International Group co-led an $80m series C round for China-based credit assessment technology provider Wecash. The round’s co-leader was China Merchants Venture Capital Management, the venture capital branch of state-owned holding company China Merchants Group, and private equity firm Forebright Capital. Wecash uses big data technology to provide advanced credit-scoring services to businesses and individuals. It claims to have more than 80 million users and partnerships with about 30 financial institutions.
France-based internet-of-things (IoT) technology provider Actility secured $75m in a series D round that featured a range of corporate investors – industrial product maker Robert Bosch, manufacturing services provider Foxconn, satellite telecoms company Inmarsat and telecoms firms Swisscom, KPN and Orange, the last through its Orange Digital Ventures unit. Founded in 2010, Actility has developed a software platform that enables communication service providers, connected device makers and app developers to build, manage and monetise low-power wide area networks for IoT.
Exits
GCV Analytics tracked only eight exits in April involving corporate venturers as either acquirers or exiting investors. This figure represents a considerable drop compared with the 20 reported during the same month a year ago. The transactions – most of which took place in the US– included six acquisitions and two mergers.
The number of exits represents a decrease from the 19 and 21 exits tracked in February and March this year. Total estimated exited capital in April amounted to $553m, less than a 10th the estimated $5.7bn in March.
Telecoms company Telstra is to exit US-based cloud communications platform developer TeleSign after mobile data services provider Bics agreed to acquire the company for $230m in cash. Founded in 2005, TeleSign supplies secure authentication and mobile identity services to digital and internet service providers, enabling them to add real-time communications to existing applications or services without building back-end infrastructure. Bics claimed in a statement that the acquisition would create the world’s first end-to-end communications-platform-as-a-service company by linking TeleSign’s technology with a global voice carrier service.
Vtesse, a US-based rare-disease therapy developer backed by pharmaceutical firms Pfizer and Lundbeck, was acquired by biopharma company Sucampo Pharmaceuticals for $200m. The transaction consisted of $170m in cash and nearly 2.8 million shares of Sucampo class A common stock. Founded in 2014, Vtesse is developing treatments for rare life-threatening conditions. The company, a spinout of orphan drug accelerator Cydan Development, is undertaking clinical trials for its lead candidate, VTS-270, a therapy for the genetic disease Niemann-Pick type C1.
Mass media group Comcast exited US-based connected car technology developer Automatic Labs in an acquisition by online radio company SiriusXM, reported by TechCrunch to be “a little north of” $100m. Automatic has created a connected-car adapter that can link to a user’s smartphone, giving in-car access to apps providing services such as fuel monitoring, identification of engine trouble and the capability to alert emergency response to accidents.
Navigation product maker Beijing BDStar Navigation agreed to acquire Canada-based mobile positioning technology developer Rx Networks in a C$31m ($23.1m) cash deal that will give an exit to telecoms company Telus. Founded in 2002, Rx provides mobile positioning technology to mobile operators and equipment manufacturers through its Location.io division, and indoor positioning systems through its Fathom Systems subsidiaries
URWork, China-based working space provider backed by property developers Junfa Group, Dahong Group and Yintai Land, agreed to merge with competitor and incubator New Space. The deal will create a company with a valuation of RMB9bn, and comes after URWork closed a $58.4m round in January this year that valued it at $1bn. URWork runs a network of shared working spaces and also provides services such as marketing, accounting and human resources to startups.
International Data Group (IDG) was acquired by diversified conglomerate China Oceanwide and IDG Capital, the corporate’s own China-based VC affiliate. The deal, first announced in January, means IDG Capital now holds a 10% stake in IDG and has taken control of IDG Ventures, the group’s corporate venturing division. IDG Capital was launched in 1993 as a US-based China-focused venture capital firm backed by IDG before moving its headquarters into China and making a series of profitable early-stage investments in businesses such as internet company Baidu and smartphone maker Xiaomi.
Rover, a US-based dog-sitting service provider backed by pet products retailer Petco, merged with DogVacay, a US-based online and mobile pet-sitting platform. The two companies hope the deal will help them accelerate international expansion efforts. Founded in 2012, DogVacay enables owners to book a stay for their pet with a host while they are out of town.
PetCoach, a US-based petcare services platform backed by mass media group Comcast, was acquired by pet product retailer Petco for an undisclosed amount. PetCoach operates a platform that enables animal owners to connect with vets, pet nutrionists, trainers and groomers to receive personalised advice on improving the welfare of their pet. PetCoach raised $2m in a funding round led by Comcast Ventures in November 2016. Pet-focused e-commerce company Pet360 had previously injected $300,000 in 2014.
Note: Monthly data can fluctuate as additional data are reported after GCV goes to press
