The number of corporate-backed rounds reported in November was 231, up slightly from the 228 deals tracked in the same month last year. Investment value also increased significantly to $19.72bn – up 105% from $9.61bn in November 2017.
However, compared with other months of this year, November fared less well than the third quarter. Despite that, November follows the overall upward trend for corporate-backed deals throughout much of this year, with record numbers for most months.
Most corporate-backed deals, as usual, involved the US with 95 rounds, China was second with 34, the UK third with 19 and India fourth with 11.
The leading corporate investors by number of deals were telecoms group SoftBank, semiconductor manufacturer Intel, e-commerce firm Alibaba and diversified conglomerate Alphabet. In terms of involvement in the largest deals, SoftBank topped this ranking as well, along with Alibaba and its financial services affiliate Ant Financial.
GCV Analytics reported 29 corporate-backed funding initiatives in November, including VC funds, new venturing units, incubators, accelerators and others. This is a slight increase compared with October, when there were 23 such initiatives. The estimated capital raised last month amounted to $4.21bn, considerably lower than the impressive $46.91bn in October – $45bn of which committed to the second SoftBank Vision Fund.
Deals
Emerging businesses from the IT, financial, health, services and consumer sectors raised the largest number of deals during November. The most active corporate venturers came from the financial services, IT, media, and consumer sectors, as shown on the heatmap. Five of the top 10 deals wereabove $1bn and, notably, SoftBank was involved in all of them.Set featured image
Ele.me and Koubei, the recently merged local services subsidiaries of group Alibaba, raised $4bn at a $30bn valuation from investors including SoftBank. The latter provided funding through the SoftBank Vision Fund, joining Alibaba and its affiliate Ant Financial as well as private equity group Primavera Capital. The capital was provided to support the merger of Ele.me, a portfolio company Alibaba fully acquired at a $9.5bn valuation, and Koubei, an Alibaba spinoff that had secured $1.1bn from investors. The merged company will provide mobile users with access to a wide range of local services including retail, food delivery, travel and accommodation. Food delivery and restaurant listings specialist Ele.me claims to serve more than 167 million users and both companies claim to have jointly linked more than 3.5 million merchants.
The SoftBank Vision Fund agreed to invest another $3bn in US-based workspace provider WeWork, which will receive the first $1.5bn in January and the other half in April. The financing will be supplied in the form of warrants that give the Vision Fund the opportunity to buy WeWork stock. Reportedly, the exact price will depend on whether WeWork raises at least $1bn in funding or goes public by September, but will value the company at a minimum of $42bn. Founded in 2010, WeWork oversees a network of flexible workspaces in more than 30 countries across five continents which are leased from landlords and rented to businesses or individuals by the desk or office. It is also branching out into managing housing, leisure and educational spaces.
The Vision Fund invested $2bn in South Korea-based e-commerce platform Coupang, at a valuation reported to be $9bn. Coupang operates an online marketplace that lists more than 120 million products for sale, 4 million of which are available for one-day delivery through Rocket, its end-to-end fulfilment system, which delivers about a million parcels a day. The company has more than doubled its revenue in the past two years and expects to record a total of $5bn in sales in 2018, though its losses have reportedly risen significantly since 2014.
The Vision Fund provided $1.1bn for US-based smart glass producer View, increasing its overall debt and equity financing to more than $1.8bn. The cash will support an increase in View’s manufacturing capabilities as well as research and development. View has created Dynamic Glass, which can automatically tint or lighten depending on the level of light, helping to reduce heating and lighting costs.
Indonesia-based e-commerce marketplace Tokopedia raised $1bn from investors, including SoftBank, at a valuation of about $7bn. Founded in 2009, Tokopedia operates an e-commerce platform on which users can set up an online store. The company offers items from more than 4 million merchants and has more than 80 million monthly active users.
Mobile commerce platform Movile and media and e-commerce group Naspers participated in a $500m round for Brazil-based online food delivery platform iFood. Movile invested as iFood’s majority owner, having held a 60% stake following a round in 2015, while Naspers is one of Movile’s largest investors. Founded in 2011, iFood runs an online platform for ordering food from a network of more than 50,000 restaurants. The company claims to have delivered 10.8 million orders in Brazil in October, averaging 390,000 a day.
US-based professional media content provider Getty Images secured $500m from conglomerate Koch Industries’ corporate venturing arm Koch Equity Development. The company was majority-owned by private equity firm Carlyle Group until earlier this year, when the Getty family repurchased control in a deal which reportedly valued Getty Images at below $3bn, including debt. Founded in 1995, Getty Images operates an online platform for media, business and creatives to purchase photography, video and music.
SoftBank agreed to invest in China-based bicycle rental service Hellobike at a $2bn valuation, in a round expected to reach $400m. Private equity firm Primavera Capital also participated. The round followed a report in the South China Morning Post stating that China-based bicycle-sharing platform Ofo had proposed a merger with Hellobike. Founded in 2016, Hellobike operates an app-based bicycle-sharing service with more than 200 million registered users. It is repoprted to be the third most popular such service in China, behind Ofo and Mobike.
The SoftBank Vision Fund invested $375m in US-based food delivery services provider Zume at a $1.5bn pre-money valuation. Zume’s lead product is Zume Pizza, a delivery service designed to be sustainable, using fresh additive-free ingredients and a scalable end-to-end system intended to cut the time and distance involved in sourcing ingredients. The company uses technologies such as robotics and artificial intelligence to automate part of the preparation process, and it owns a patent for trucks capable of preparing pizzas on the move.
Internet group Baidu led a RMB2.1bn ($302m) round for China-based elevator advertising service XinChao in connection with a partnership agreement between the companies. XinChao agreed to join Baidu’s advertising network, Baidu Juping, and it intends to leverage the corporate’s artificial intelligence technology to make its advertising terminals more intelligent. Founded in 2007, XinChao operates LED advertising screens in more than 700,000 elevators across China.
Exits
In November, GCV Analytics tracked 18 exits with corporate venturers participating as either acquirers or exiting investors. The transactions included six initial public offerings and 12 acquisitions.
The number of exits was lower than October, when there were 29. Total estimated exited capital amounted to $3.55bn, down 53% from the $7.56bn estimated the previous month.
Enterprise software supplier Blackberry agreed to acquire US-based cybersecurity technology provider Cylance, which had been backed by hardware manufacturer Dell and banks Citi and Capital One. Their respective venturing subsidiaries, Dell Ventures, Citi Ventures and Capital One Ventures all exited. The deal consisted of $1.4bn in cash and the assumption of unvested employee incentive awards. Cylance produces predictive endpoint cybersecurity products that use artificial intelligence to combat malware and fileless attacks, detecting and responding to threats. Its technology will be used to enhance BlackBerry Spark, Blackberry’s connected enterprise communications platform.
US-based software developer for architects Autodesk agreed to the $875m acquisition of PlanGrid, a US-based construction software developer. PlanGrids counts cloud services provider Box and Alphabet among its previous backers. Established in 2011, PlanGrid has a collaboration platform allowing general contractors, subcontractors, architects and owners to work together on projects in real time. The company claims its platform is used in more than a million projects in 90 countries. Autodesk intends to integrate PlanGrid into its building information modelling software, Revit, and construction management platform Bim 360.
Enterprise software provider OpenText agreed to acquire US-based application and data management software developer Liaison Technologies for about $310m, allowing corporates including pharmaceutical firm Merck & Co to exit. Founded in 2001, Liaison produces software that helps a base of more than 4,000 enterprise customers integrate their business applications and manage data. The company’s Alloy platform includes a cloud-based monitoring and visualisation tool for business and transaction activity and a data mapping and translation system that Merck uses in its clinical trials.
Babytree, a China-based social parenting media and e-commerce platform backed by Alibaba, industrial conglomerate Fosun and online education provider TAL Education, raised $217m in its Hong Kong IPO. The company priced its shares at HK$6.80 ($0.90), settling at the bottom of a range that had HK$8.80 at the other end. Babytree had hoped to secure up to $1bn at a valuation of $3bn to $5bn, but its valuation dipped to $1.5bn, down from $2.2bn earlier. Babytree has created an online community where parents can share their experiences, seek advice and find information such as a vaccination checklist and dietary guides for mothers. It also operates an e-commerce platform and video-sharing app WeTime.
Media group Bloomberg exited US-based work management software developer Sapho in a $200m acquisition by virtualisation software provider Citrix Systems. Founded in 2014, Sapho has created software platform Sapho Employee Experience Portal that provides employees with a range of third-party micro-applications intended to help them work more efficiently. The company’s micro-app platform is set to be absorbed into Citrix’s corporate IT management service, Citrix Workspace.
Tongcheng-eLong, a China-based online travel agency backed by internet company Tencent, online travel agency Ctrip and conglomerate Dalian Wanda, raised $180m in an IPO on the Hong Kong Stock Exchange. The company issued about 143 million shares at HK$9.80 each, near the bottom of the IPO’s HK$9.75 to HK$12.65 range. Reports had suggested it was targeting $1bn, but that goal was reduced to $233m. Tongcheng-eLong was created through the merger of LY.com, an online travel services provider also known as Tongcheng Network, and online travel agency eLong. The company’s online platform allows consumers to book hotel accommodation and travel.
Industrial conglomerate Robert Bosch and telecoms firm KPN exited Netherlands-based network security software developer SecurityMatters, which was acquired by internet-of-things security technology provider Forescout Technologies for about $113m. Founded in 2009, SecurityMatters has built a cybersecurity platform that focuses on operational technology networks such as those use to run industrial or control systems. The software gives customers security for their devices, and the ability to monitor their networks and detect threats and anomalies.
Twist Bioscience, a US-based DNA synthesis technology developer backed by pharmaceutical companies Illumina, WuXi PharmaTech, Kangmei and Institut Mérieux, went public in a $70m IPO. The company issued 5 million shares on the Nasdaq Global Select Market at $14 each, the foot of the IPO’s $14 to $16 range, valuing it at $381m. Twist has created a DNA synthesis platform that enables users to produce synthetic DNA on a silicon chip and is using the technology to develop products such as synthetic genes, sample preparation tools and antibody libraries that can be used in drug discovery.
Amimon, an Israel-based chipmaker backed by communications technology provider Motorola and manufacturing services firm Hantech, was acquired by video and photography products producer Vitec for $55m. Founded in 2004, Amimon designs and develops wireless video transmission chipsets primarily used for professional filmmaking and high-end productions. Vitec has already integrated Amimon into its creative solutions division and is working with the company to design and manufacture new products for adjacent markets.
Vapotherm, a US-based respiratory distress treatment provider backed by healthcare consortium Kaiser Permanente, closed its IPO at $64.4m after the underwriters took up the overallotment option. The company raised an initial $56m when it floated on the New York Stock Exchange, pricing its shares at the bottom of the offering’s $14 to $16 range. Joint book-running managers BofA Merrill Lynch and William Blair, lead manager Canaccord Genuity and co-manager BTIG bought an additional $8.4m of shares two days later. The share price subsequently rose to over $17. Vapotherm’s Precision Flow system uses heated, humidified and oxygenated air to treat respiratory distress.
Note: Monthly data can fluctuate as additional data are reported after GCV goes to press