The number of corporate-backed rounds in February was 251, up 58% from the 159 in the same month last year. Investment value also increased significantly to $14.28bn, up 54% from $9.27bn in February last year. Compared with preceding months, there were fewer rounds than the 259 in January but more than the 208 in December.
The US came first by number of corporate-backed deals, hosting 131 rounds, China and the UK were second with 20, and India third with 11.
The leading corporate investors by number of deals were diversified conglomerate Alphabet, telecoms group SoftBank and financial services firm Goldman Sachs. In terms of involvement in the largest deals, SoftBank and Alphabet topped the ranking, along with internet company Tencent.
GCV Analytics reported 18 corporate-backed funding initiatives in February, including VC funds, new venturing units, incubators, accelerators and other. This figure suggested a slight decrease compared with January, which registered 26 such initiatives. The estimated capital raised in those initiatives amounted to $2.08bn, down from the $3.26bn tracked in the first month of 2019.
Deals
Emerging businesses from the IT, financial, health, services, consumer and transport sectors raised the largest number of deals during the second month of 2019. The most active corporate venturers came from the financial services, IT, media and health sectors. Two of the top 10 deals were above $1bn and the most frequent investor in the largest deals was SoftBank.
China-based automotive e-commerce platform Chehaoduo secured $1.5bn from the SoftBank Vision Fund. Chehaoduo, a spinout of classified marketplace Ganji, operates a used vehicle auction and trading platform and an after-sales services subsidiary. The funding will drive technology, product and services development.
The SoftBank Vision Fund led a $1bn round for US-based online shipping platform Flexport, reportedly valuing the company at $3.2bn. Logistics service provider SF Express also participated in the round along with investment firm DST Global and venture capital firms Founders Fund, Cherubic Ventures and Susa Ventures. Flexport operates a cloud-based platform for shipping by air, sea, land or rail, which incorporates real-time tracking and analytics. The funding will be used to increase headcount, with a particular focus on engineers and experts in local markets.
Indonesia-based on-demand ride provider Go-Jek secured about $1bn from investors including Tencent, e-commerce platform JD.com and Alphabet at a $10bn post-money valuation. Tencent, JD.com and Google co-led the funding, which represented the first close of Go-Jek’s series F round. They were also joined by conglomerate Mitsubishi Corp and investment manager Provident Capital. Go-Jek owns a mobile ride-hailing and on-demand services app that reportedly had up to 25 million users by June 2018. It has moved into Singapore and is in discussions with Philippine regulators.
The SoftBank Vision Fund provided more than $940m for Nuro, a US-based developer of an autonomous delivery vehicle. Founded in 2016, Nuro is working on a small four-wheeled driverless electric vehicle designed to collect and transport consumer goods. Nuro has signed a delivery partnership agreement with grocery chain Kroger and licensed its technology to autonomous truck developer Ike.
US-based sustainable truck developer Rivian Automotive secured $700m in a round led by e-commerce and cloud computing group Amazon and backed by undisclosed existing shareholders. Rivian has previously received financing from car distributor Abdul Latif Jameel and diversified conglomerate Sumitomo. Rivian is working on an all-electric pick-up truck and sports utility vehicle, both of which are expected to be released commercially in the US next year, preceding a European launch the following year.
China-based artificial intelligence (AI) chip developer Horizon Robotics raised $600m in a series B round backed by two subsidiaries of conglomerate SK Group. SK China and SK Hynix, the conglomerate’s Chinese and semiconductor subsidiaries respectively, backed the round with a number of corporate venturing funds of unnamed China-based car manufacturers. Horizon Robotics’ valuation was said to be “at least” $3bn. Founded in 2015, Horizon Robotics is developing embedded AI chips for applications such as autonomous vehicles, surveillance equipment and other smart devices. The company’s clients include SK Telecom.
US-based autonomous driving technology developer Aurora Innovation secured $530m from investors including petroleum supplier Shell and Amazon. The round was led by venture capital firm Sequoia Capital and also featured Shell Ventures, Shell’s investment arm, as well as Lightspeed Venture Partners, Geodesic, Reinvent Capital, Greylock, T Rowe Price Group and Index Ventures. The round reportedly valued the company at more than $2.5bn. Aurora is working on software, hardware and data technology for driverless vehicles. It has partnerships with automotive manufacturers including Hyundai, Volkswagen and Byton.
The SoftBank Vision Fund led a $440m round for UK-based digital bank OakNorth. The corporate put up $390m while the rest was supplied by conglomerate Clermont Group. The round reportedly valued OakNorth at about $2.8bn. It has now raised more than $1bn in total. OakNorth offers fixed-term savings accounts to consumers and businesses. It also provides business financing, and has lent more than £2bn ($2.6bn) to UK-based companies.
SoftBank led a $535m series D round for US-based delivery services provider DoorDash, increasing the company’s overall funding to $722m. Venture capital firm Sequoia Capital, charitable foundation Wellcome Trust and Singaporean sovereign wealth fund GIC also participated in the round, which reportedly valued DoorDash at $1.4bn post-money. DoorDash runs a last-mile delivery service for restaurants and operates in more than 600 US and Canadian cities.
GV, a corporate venturing vehicle of Alphabet, led a $310m series D round for US-based scooter-sharing service Lime that included Alphabet itself. The round was co-led by venture capital firms Andreessen Horowitz and Institutional Venture Partners, Bain Capital Ventures, the VC arm of private equity firm Bain Capital, and Fidelity Investments, a subsidiary of financial services and investment group Fidelity. Lime’s electric scooter and bicycle rental platform operates in 15 countries on five continents, and it has signed up some 10 million users to its app, which also covers university and corporate campuses.
Exits
In February, GCV Analytics tracked 16 exits with corporate venturers participating as either acquirers or exiting investors. The transactions included four IPOs, one merger and 11 acquisitions. The number of exits went down slightly compared with January, when there were 19. Total estimated exited capital amounted to $952m, down from the $3.12bn estimated for the previous month.
Gimlet Media, a US-based podcast publisher backed by marketing group WPP, was acquired by music-streaming platform Spotify for $337m. Spotify’s interest in Gimlet would feed into a drive by the corporate to diversify its core offering with the addition of non-music content, and is the first time it has bought a content producer. Founded in 2014 as American Podcasting Corporation, Gimlet produces and hosts narrative and scripted podcasts, the latter often boasting high-profile actors. Gimlet also operates a branded division that creates sponsored content, and has moved into television production.
CStone Pharmaceuticals, a China-based biopharmaceutical company backed by insurance provider Taikang and pharmaceutical research firm WuXi PharmaTech, raised HK$2.2bn ($285m) in a Hong Kong IPO. CStone achieved a valuation of $1.5bn after selling 18.6 million shares to Hong Kong-based investors and more than 167 million shares to international backers at $1.50, in the middle of its range of $1.40 to $1.60. Founded in 2016, CStone is developing treatments for diseases including cancer, cardiovascular diseases, rheumatoid arthritis, haematology and autoimmune conditions, with a particular focus on immuno-oncology combination therapies.
Alector, a US-based immuno-neurology therapy developer backed by Alphabet as well as pharmaceutical companies AbbVie, Eli Lilly, Amgen and Merck & Co, raised $176m when it floated on the Nasdaq Global Select Market. The company priced 9.25 million shares at $19 each, in the middle of the $18 to $20 range it had set, valuing it at almost $1.3bn. Founded in 2013, Alector is developing drugs that will combat neurodegeneration using methods pioneered in immunology and genetics medicine development, targeting dysfunction in the body’s immune system that triggers disorders leading to neurological deterioration.
Stealth BioTherapeutics, a US-based mitochondrial dysfunction drug developer that counts an affiliate of property development conglomerate Nan Fung as an investor, floated in a $78m IPO. The offering consisted of 6.5 million American depositary shares, each representing 12 ordinary shares, at $12 each, at the bottom of its $12 to $14 range. The company listed on the Nasdaq Global Market. Stealth Bio is developing therapies for rare genetic and age-related diseases caused by dysfunction in the body’s mitochondria, the parts of a cell that generate energy. The company plans to use $25m of the proceeds to advance its lead candidate through phase 3 clinical trials.
Harpoon Therapeutics, a US-based immuno-oncology drug developer with pharmaceutical firms Eli Lilly and Taiho as investors, floated in a $75.6m IPO. The offering consisted of 5.4 million shares issued on the Nasdaq Global Select Market at $14 each, in the middle of its $13 to $15 range, valuing the company at about $334m. Founded in 2015, Harpoon is developing T-cell engagers meant to leverage the body’s immune system to treat diseases including cancer. Harpoon will put $67m of the IPO proceeds into taking its lead products – for prostate and ovarian cancer – through clinical trials.
Game engine maker Unity Technologies purchased corporate-backed US-based gaming communications technology developer Vivox for an undisclosed amount. Founded in 2005, Vivox has created a platform that enables users to communicate by voice or text while playing mobile, PC and console games. Vivox had received a $2m investment from Peacock Equity, a now defunct corporate venturing vehicle formed by power and industrial technology conglomerate General Electric and broadcaster NBC Universal, in 2010. The company’s platform has been integrated into more than 125 games through partnerships with gaming studios such as Ubisoft, Bluehole, Wargaming.net and Epic Games, and has more than 100 million monthly users.
Euclid Analytics, a US-based spatial analytics platform backed by media group Cox Enterprises and telecoms firm Novel Group, was acquired by co-working spaces provider WeWork. Financial terms of the acquisition were not disclosed. Euclid’s 24 employees will remain with the company. Founded in 2010, Euclid has developed analytics software that tracks the behaviour of customers in locations such as shopping centres and airports. WeWork said it would use the technology to gain clustered information about its spaces rather than tracking individuals.
Spotify paid an undisclosed sum to acquire Anchor, a US-based podcasting app developer backed by Alphabet. The deal came days after Spotify acquired Gimlet Media. Founded in 2015, Anchor has developed a platform that enables users to create and monetise podcasts and other audio content directly from smartphones.
UK-based dog-walking and sitting service HouseMyDog has merged with Gudog, a Spain-based rival backed by telecoms company Telefónica’s Wayra accelerator. Founded in 2012, Gudog has developed an online marketplace that operates in Spain, France and Germany, and which enables pet owners to find, book and pay for a sitter or walker. HouseMyDog provides a similar online-based service that connects dog owners with service providers. The merged company will cover the UK, Ireland, Spain, France, Germany, Switzerland, Austria and Belgium, with 25,000 walkers and sitters.
Online dating platform Match Group paid an undisclosed sum to complete its acquisition of US-based dating app developer Hinge, having previously bought a 51% stake. Match had secured a 12-month option to acquire Hinge wholly when it bought the majority stake in 2018. The financial terms of the initial deal remained undisclosed. Founded in 2012, Hinge has developed an online service for users seeking long-term relationships, billing itself as an app “designed to be deleted”. Hinge initially relied on a user’s social graph on Facebook to match people with friends of friends, but began adding other platforms shortly before the 2018 deal.
Note: Monthly data can fluctuate as additional data are reported after GCV goes to press