The smartphone revolution and the increased digital savvy of customers is leading to a robust market for activity in the consumer sector.
Many groups that have long operated in the traditional bricks and mortar economy gobbled up stakes in companies catching the digital mood, while successful digital giants are making their presence and expertise felt through aggressive investment in start ups.
Perhaps most intriguingly, much eye-catching activity is coming from Asian markets, both in terms of the level of corporate venturing investment by native groups and the investment in high-growth winners in those markets.
See our most influential table here.
Deals
There has seen significant activity among Asian compa-nies in the past year. A highlight is the expected exit for a quasi-corporate venturing deal with the anticipated initial public offering (IPO) of China-based e-commerce com-pany Alibaba, which has long been backed by US-based search engine Yahoo.
Alibaba itself has also been spearheading a boom in corporate venturing and other deal activity from Chinese groups. See innovative region for more details on Chinese activity.
Alibaba has contributed $215m to a $280m venture capital round raised by US-based mobile messaging service Tango as well as backing a $100m B round for taxi-finding mobile application business Hangzhou KuaiZhi Technol-ogy in November last year, and investing in a $100m round for TutorGroup, a China-based online language learning platform.
It also bought 60% of Hong Kong-listed e-commerce firm ChinaVision Media Group for $804m, and at the end of last year invested $364m investment in appliance maker Haier. This last investment was spread across Haier Electronics ($124.5m) and its Goodaymart subsidiary ($240m).
Other large deals in the sector include China-based internet service portal Tencent’s corporate venturing unit becoming a return investor in China-based online travel agency 17u, also known as TongCheng, in an $82.5m round, and paying $215m for a 15% stake in China-based e-commerce company JD.com, formerly known as 360Buy.
Pinterest, a US-based social networking and content collecting website, whose backers include Japan-based e-commerce company Rakuten, raised $225m in a series D round of finance led by new investor US mutual fund Fidelity Investments, while Rakuten-backed Tuniu, a China-based online travel pack-age provider, also raised $60m.
7-Ventures, the recently estab-lished venture capital arm of convenience store chain 7-Eleven, sealed two deals, having been founded last summer. These deals included backing Belly, a US-based customer loyalty platform for small businesses, which provides an app in place of loyalty cards, alongside technology company Cisco.
Deals by US-based sports apparel company Nike included an investment in automation and material handling solutions company Grabit.
Ikea’s corporate venturing unit Ikea GreenTech invested in Dye-Coo Textile Systems, a Nether-lands-based waterless dyeing technology company.
Germany-based retailer Tengelmann has had an active year, including large investments such as backing the $100m round raised by Zalora, the $88m round raised by takeaway food company Delivery Hero and the $130m raised by Russia-based online fashion retailer Lamoda, as well as smaller deals such as a co-investment in Preisanalytics through its corporate venturing unit Tengelmann Ventures, alongside Germany’s state fund High-Tech Gründerfonds and venture firm Bayern Kapital, as well as Springlane.
Singapore-based L Capital Asia, the corporate venturing fund representing French luxury consumer brands conglomerate LVMH and Malaysia-based YTL Corp, took a 40% stake in the Australian sports brand 2XU. Local media puts the value of the deal at A$80m ($72.8 m).
Ulster Bank Diageo Venture Fund, run by asset manager Investec, with investment from drinks company Diageo and financial services business Ulster Bank, backed Dublin-based software firm Fenergo as part of a €4m ($5.4m) round.
Project A Ventures, backed by Germany-based retailer Otto Group, has invested an undisclosed sum in 42matters, a Switzerland-based mobile app discovery technology company.
Mod Pizza, a restaurant business set up by former Starbucks executives, is reported to be 80% through a funding round. The company’s advisory board reportedly includes Starbucks chief digital officer Adam Brotman, who makes corporate venturing-style investments for the company, including its participa-tion investing in mobile payments start up Square in 2012.
Square has also been active in making acquisitions, including backing BookFresh earlier this year and Evenly last year. Maveron, a venture capital firm co-founded by Starbucks’ Howard Schultz, has also been active, with recent deals includ-ing backing US-based hair colouring products company Madison Reed.
Active units targeting the consumer sector from outside include Google, which contributed to the $25.75m raised by US speciality coffee chain and brand Blue Bottle.
Unilever Ventures, the corporate venturing unit of the Anglo-Dutch consumer goods company, bought a majority stake in Syneron Medical, an aesthetic medical device company, at the same time as forming a joint venture.
Unilever spin-out Arecor, a UK-based biologic molecules company, secured a minority investment from DSM Venturing, the corporate venture arm of Royal DSM, the Netherlands-based life sciences and materials company.
Syngenta Ventures, the corporate venturing unit of the Switzerland-based agricultural company, helped Metabolon, a US based provider of diagnostic tests and research services, raise $15m in series E financing.
US-based online retailer Amazon joined talent agency William Morris Endeavor in a $4.7m round for Songza and a $2.25m round for Videolicious, alongside the Washington Post.
Coca-Cola backed music streaming service Spotify is also reported to be targeting an autumn IPO this year.
People
Olivier Garel, vice-president of mergers and acquisitions at fast-moving consumer goods company Unilever, has replaced Martin Grieve at its corporate venturing unit, Unilever Corporate Ventures. Grieve left after nearly four years as managing director of the unit to join peer Reckitt Benckiser.
Mike Buckley, formerly a managing director at Intel Capital, the venture capital investment division of the micro-processor maker, in June last year moved to Nike Digital, where he is now head of finance and strategy.
WalmartLabs, the retailer’s Silicon Valley-based innovation team, expanded its presence in Silicon Valley to 2,000 people by opening an office in Sunnyvale.
Funds
Multi-media company Axel Springer commited $41m to Germany-based online company builder Project A Ventures, following the lead of mail order retailer Otto Group.
L Capital Asia held a first close of its second private equity fund, L Capital Asia 2, at its hard cap of $950m. L Capital Asia said commitments were broad and global, including institutions, sovereign wealth funds and pension funds.
As mentioned in the deals section, convenience store chain 7-Eleven has begun investing through its new venturing unit, 7-Ventures.
Anglo-Dutch consumer goods company Unilever is inviting marketing technology start ups to pitch for a $100,000 cash injection and mentoring programme, in exchange for creating customised digital marketing pilots for some of Unilever’s global brands.
China-based e-commerce company Alibaba has launched a crowdfunding entertainment subsidiary called Yu Le Bao that will invest in media content and allow micro-investors the chance to influence the end product. Yu Le Bao, which translates as “entertainment treasure” in English, allows people to invest sums starting at RMB100 ($16.10) for films and RMB50 for games, rising to an upper limit of RMB1,000, through their smartphones.
The money raised through Yu Le Bao will be channelled to China-based insurance company Guohua Life, which will reinvest it in the projects. Because the investments will be grouped together, customers will all receive the same 7% return.