With spill-over effects across all industries undergoing digitisation, innovation in the IT extends far beyond the realms of the sector itself.
The digitisation of today’s world is inextricably linked to the datafication phenomenon and the rise of big data. Ever smarter connected devices produce large streams of data. One of the main challenges for different sectors with big data was its operationalisation, which has to do with automation and enabling data analytics to ultimately enable extracting relevant information and insights.
According to Todd Goldman, vice-president of marketing of data service provider InfoWorks and a Silicon Valley veteran, there has been much focus on ad-hoc data analytics since the emergence of big data. However, the advent of automation and machine learning (ML) algorithms is expected to help companies move toward “full operationalisation of enterprise-wide big data analytics at scale”. Goldman also notes that many organisations are likely to continue to use hybrid data analytics deployment – on premises and in the cloud.
The use of big data analytics is certainly growing, as latest surveys of data executives show. The latest Big Data and AI Executive Survey, conducted by consulting firm New Vantage Partners, found that 62% of data executives have already seen measurable results from investments in big data and artificial intelligence, while nearly half of them (48%) said their organisations were competing on data and analytics.
Handling big data streams would be unthinkable without AI, which is the other major factor in the IT innovation world today. The media fist popularised buzzwords like “artificial intelligence”, “machine learning” and “deep learning” (DL). To be clear on the terminology, AI refers to any instances of a machine performing tasks characteristic of human intelligence – from recognising objects and images through speaking languages to problem solving. Machine learning is a specific kind of AI where there is a machine learning to perform a task without having been explicitly programmed to do so. Deep learning, in turn, is an approach to ML, inspired by the functioning of neural networks in our brain.
There have been other buzzwords gaining popularity and growing in usage in recent times, as the realm of AI tech advances. The phrase “natural language processing” (NLP), for example, refers to extracting or generating meaning and intent from texts in a natural, readable and grammatically correct form. “Computer vision”, on the other hand, is about extracting meaning or intent from visual elements, whether characters in text documents or faces, objects, scenes etc. from images.
The hype around AI and ML has not been a mere fad. It is a technology that already yields measurable results for business enterprises. The second edition of the State of AI report, issued by consulting and auditing firm Deloitte found, citing its executives survey, that nearly 60% of organisations acquire AI technologies by simply buying enterprise software that comes with AI already integrated. Most of the survey respondents (82%) said they had gained a financial return from their AI investments. For companies across sectors, the median return on investment from cognitive technologies was 17%. The respondents also reported that AI greatest benefits were enhancing current products, optimising internal operations and making better decisions.
Most interesting and controversial are the questions on the impact of AI on the economy and, particularly, on human labour. While the world is likely far away from an Asimovian robot-dominated stage where machines and robots have replaced all working humans, AI is set to augment human productivity in the coming decades but much of this is accompanied by the sentiment of fear. According to a survey cited in the 2019 Global Human Capital Trends by Deloitte, 38% of respondents expected technology to eliminate jobs at their organisations within the next three years, while only 13% thought automation would “eliminate a significant number of positions.”
While such attitudinal research findings do evidence the presence of a significant degree of fear, there are reasons to believe AI may be a positive force at the workplace. Earlier research from Deloitte, cited in the 2019 Global Human Capital Trends, concluded that “automation, by removing routine work, actually makes jobs more human, enabling the role and contribution of people in work to rise in importance and value.” In other words, AI is expected to enhance human labour rather than replace it, with human work being reframed in terms of problem-solving and the ability to create new knowledge.
The latter would clearly necessitate an improvement of skills among the workforce. This is also evidenced in results from the same Deloitte survey: 62% of respondents said they were “using automation to eliminate transactional work and replace repetitive tasks” and 47% were also “augmenting existing work practices to improve productivity”. Such practices came hand in hand with reskilling – 84% of respondents who said automation would require reskilling were also increasing investment on reskilling and retraining.
As skills are going to be key in the AI-power workplace, it is not unreasonable to supposed that the impact of AI on low skilled and high skilled positions would be uneven. A report entitled “The macroeconomic impact of AI”, produced by auditing and consulting firm PwC, estimates that 326 million jobs will “come to depend on and be heavily impacted by AI” by 2030. Most of the impacted jobs will likely be low-skilled positions. Skilled jobs, on the other hand, will “be more positively impacted, supporting a bias towards skilled labour.”
Despite the social implications of this, the projected impact of AI at the current juncture on macroeconomic level is positive. The cited PwC report estimates that AI could generate an additional 14% of expected global GDP growth by 2030, thanks to AI-enhanced services and products, on the consumer side, and a workforce armed with AI tools that will significantly drive up its productivity.
Aside from (creative) destruction of jobs, digitisation o brings along significant digital threats that are addressed by the cybersecurity subsector. The cybersecurity market growth has been driven by the adoption of digital technologies across a wide range of industries as well as the increased use of internet-connected mobile technologies by consumers. In parallel, cyberattacks have also become more sophisticated, with a growing variety of tactics to exploit vulnerabilities. As analyst Steve Duplessie, founder of Enterprise Strategy Group (ESG), once put it: “Cybersecurity is a magnificent market because the problem can never be solved entirely. Fix one hole, the bad guys find another. It is a ping-pong match for hackers.”
The latter has clearly shown in the growth this subsector. According to estimates of Cybersecurity Ventures – venture firm specialising in this space, the global cybersecurity market was worth an estimated $3.5bn in 2004. In 2017 it was worth more than $120bn, suggesting that it had grown by roughly 35X over 13 years. Cybersecurity Ventures forecasts global spending on cybersecurity products and services will exceed $1 trillion cumulatively by 2021. Market research firm Gartner, in turn, forecasts global spending on information security (a subset of the wider cybersecurity market) to grow to $124bn by the end 2019 and by $170.4bn by 2022. Thus, whatever the methodology to estimate the size of the cybersecurity market used by research firms, one thing is certain – its growth is not set to stop.
Today´s digitised world, with its burgeoning data and connectivity of everything, would be unthinkable without cloud technology and cloud infrastructure. Many data-driven and data-dependent businesses have either moved operations completely to the cloud or reduced their operational expenses on private data centres. The 2019 State of the Cloud Survey, conducted by tech asset management solution provider Flexera, found that that almost every organisation (94% of the surveyed) is using cloud tech at some level, with the adoption of both public and private clouds (public cloud hosting refers to situation in which a client’s data are stored in the cloud hosting provider’s data centre and the provider is responsible for the management and maintenance of the data centre). On average, companies are using or experimenting with five public and private clouds, with the majority of workloads now running in cloud, according to the survey.
While business operations migrate to the cloud, individual consumers are moving to a new digital reality, enabled by virtual reality (VR) and augmented reality (AR) technologies. It is unclear at present whether the two technologies will converge or diverge from one another, as they become more marketable. Online publication Venture Beat recently noted how mobile AR, smart glasses and VR could diverge in the medium-term, at least commercially, citing findings and forecasts of Silicon Valley-based consultancy Digi Capital.
The possibility for divergence stems from different fundamental economics and adoption of the two technologies. On the one hand, AR – including mobile AR and smart glasses – is forecast to reach a 2.5 billion installed base and $70-$75bn in revenue by 2023. VR, on the other hand, may top 30 million installed base, with more “modest” revenues of $10-$15bn revenue for the same period. Given its larger installed base, mobile AR seems to be a more promising candidate for the mass consumer market in the medium term, while smart glasses are more geared toward enterprise customers.
VR tech – with its high attrition rates, modest sales and lower installed base, still appears like a technology yet to come out of its early stage. Despite the wide range of application of VR tech, a report by global analyst company CCS Insight points gaming as the primary reason for sales of VR devices, noting that it is unlikely to change.
On the hardware side, it is chips and semiconductors that enable sufficient computing power for all these developments in the sector. According to the KPMG 2019 Global Semiconductor Industry Outlook, conducted in collaboration with the Global Semiconductor Alliance, about two-thirds of the 149 leaders of semiconductor companies ranked the internet of Things (IoT) first as the main application driving semiconductor revenue, among important drivers the report identifies. Wireless communications (with the rollout of 5G) are also expected to drive revenues by 60% of respondents, while 43% opined that the computational requirements of cognitive technologies like AI will also drive demand for the industry.
Despite these survey results, the semiconductor and chip subsector has actually registered a drop recently. The Semiconductor Industry Association reported significant decreases in global revenues. Global sales of semiconductors totalled $96.8bn in the first quarter of this year, representing 15.5% drop versus results from the previous quarter and 13% less than same quarter of 2018.
The latter has made some readjust their forecasts on the sector. According to the Nikkei Asian Review, the global market for semiconductors is expected to contract 12.1% to $412bn by end of 2019. This is significant adjustment from the expected 2.6% growth predicted by the World Semiconductor Trade Statistics in 2018. The correction in forecasts has been attributed largely to uncertainties around current affairs like Brexit, the trade war between the US and China and weak smartphone demand. We are yet to see to what extent this expected contraction will impact venture investments. It is already well known, for instance, Intel Capital – a key corporate venturer by its history, number and size of investments – has recently undergone significant changes in terms of human resources (read more on it in the “People” section below).
Another notable rising tech in the hardware space is edge computing, which has been driven by digitisation and the rise of IoT. Edge computing is defined as distributed form of computing which brings computer data storage closer to the location where needed. Computation is performed, mostly or entirely, on distributed device nodes. According to reports cited by Reuters, the global edge computing market is expected to grow at a CAGR of 27.3% from 2018 to 2023 and to reach $9.2bn in size. We expect to see more corporate-backed deals in this area.
For the period between June 2018 and May 2019, we reported 659 venturing rounds involving corporate investors from the IT sector. More than half of them (346) took place in the US, while 92 were hosted in China, 46 in Japan, 39 in Israel and 24 in India and the UK.
The majority of those commitments (252) went to emerging enterprises from the same sector (mostly artificial intelligence, semiconductors and chips as well cybersecurity) but also with the remainder going into companies developing other technologies in synergies with the IT sector incumbents: 84 deals in the services sector (mostly human resources tech and edtech), 72 in the media sector (digital marketing and adtech, games and gaming, audio and video content and tech as well as social media), and 66 in the life sciences sector (mostly healthcare IT as well as pharmaceuticals).
The network diagram, illustrating co-investments of IT corporates, shows the broad variety of investment interests of the sector’s incumbents. The commitments range from smart grid tech (Actility) and 3D printing (Desktop Metal) through drone navigation (AirMap), sensors for self-driving cars (AEye) and IoT networks (FogHorn Systems) to data storage (Weka.io), electric vehicles (Nio) and ride hailing (Go-Jek).
On a calendar year-on-year basis, total capital raised in corporate-backed rounds rose from $34.39bn in 2017 to $41.56bn in 2018, representing a 21% increase. The deal count also grew, though only by 13%, from 553 deals in 2017 to the 626 tracked by the end of 2018.
As outlined further in this article, the 10 largest investments by corporate venturers from the IT sector were not necessarily concentrated in the same industry.
The leading corporate investors from the IT sector in terms of largest number of deals were diversified internet conglomerate Alphabet, cloud-based enterprise software provider Salesforce, internet company Tencent and electronics manufacturer Samsung. The list of IT corporates committing capital in the largest rounds was headed by also by Alphabet and Tencent along with mobile semiconductor producer Qualcomm.
The most active corporate venture investors in the emerging IT businesses were Alphabet, chipmaker Intel and electronics producer Dell.
The emerging IT businesses in the portfolios of corporate venturers came from augmented reality tech (Magic Leap), big data analytics (Abeja), cybersecurity (Ionic Security, Cyber GRX, Team8), artificial intelligence (Graphcore) and mobility software (RideCell).
Overall, corporate investments in emerging IT-focused enterprises went up from 443 rounds in 2017 to 549 by the end of 2018, suggesting a 24% increase. The estimated total dollars in those rounds grew even more significantly, by 65%, from $11.57bn in 2017 to $19.04bn last year, suggesting that valuations of emerging tech enterprises are clearly on the rise.
Deals
Corporates from the IT sector invested in large multi-million-dollar rounds, raised by enterprises from the telecoms, media, services and transport sector. Four of the top 10 deals were above the $1bn mark.
US-based satellite services provider OneWeb secured $1.25bn in funding from investors including Qualcomm, telecoms firm SoftBank and diversified conglomerate Grupo Salinas. The corporates were joined by the government of Rwanda, and the round increased the total raised by the company to about $3.4bn. Founded in 2012, OneWeb is building a network of low earth-orbit satellites that are intended to provide high-speed internet connectivity to rural areas and other underserved parts of the world The satellites are built through a partnership with another investor, aerospace manufacturer Airbus. The latest funding followed a launch of OneWeb’s first six satellites and will be used to accelerate production and increase its launches to 30 per month by the end of 2019.
E-commerce and media group Naspers invested $660m in India-based online food delivery platform Swiggy, leading its $1bn series H round. Local services platform Meituan Dianping and Tencent also took part in the round, along with DST Global, Coatue Management, Hillhouse Capital and Wellington Management. The round reportedly valued Swiggy at $3.3bn. Swiggy runs an app-based service enabling users to order food from local restaurants to be delivered to their homes. It is present in 58 Indian cities.
Indonesia-based on-demand ride provider Go-Jek secured about $1bn from investors including corporate backers, reportedly at a $10bn post-money valuation. Tencent, e-commerce firm JD.com and Alphabet co-led the funding, which represented the first close of Go-Jek’s series F round. They were 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 as of mid-2018. It has moved into Singapore and is in discussions with Philippine regulators over an entry into that market.
US-based short-form video production company NewTV closed an initial $1bn in funding, raising the cash from a consortium including a range of corporate investors. Media and entertainment groups 21st Century Fox, Walt Disney, Entertainment One, ITV, Lionsgate, Metro Goldwyn Mayer, NBCUniversal, Viacom and Warner Media were all among the investors and, according to Deadline, possible content suppliers. Diversified electronics and media conglomerate Sony, e-commerce firm Alibaba, mass media group Liberty Global and investment banking firms Goldman Sachs and JPMorgan Chase also participated in the round, which was led by investment group Madrone Capital Partners. NewTV is developing an online platform that will feature drama, comedy, documentaries and reality shows cut into episodes that are 10 minutes in length, made with budgets comparable to high-profile cable channels or streaming services like HBO or Netflix.
US-based augmented reality technology developer Magic Leap closed a series D round at $963m. The round was initially backed by Alphabet, Alibaba and media company Grupo Globo that all contributed to the round’s $502m first tranche. The first tranche also featured Singaporean government-owned investment firm Temasek. Magic Leap subsequently managed to add $461m to the round. $400m of them came from Saudi Arabia’s Public Investment Fund. The remaining $61m were committed by a host of new investors, including media group Axel Springer’s corporate venturing unit, Axel Springer Digital Ventures. This series D round reportedly valued the company at about $6bn. Founded in 2011, Magic Leap develops an AR headset together with a dedicated operating system and is in talks with prospective content producers. Magic Leap’s goggle are capable of superimposing animated computer graphics over a user’s vision of real life. Its light field technology could hypothetically be used for a variety of purposes.
Tencent led an $800m series D round for China-based real estate listings and services platform Ke.com. Spun off from online and offline estate agency Lianjia and also known as Beike Zhaofang, Ke runs an online platform that enables users to search and locate free properties, using 3D modelling technology to help them see the layout of the homes and providing real estate brokerage services. The company also offers an online marketplace for in-home decoration and renovation services. It has a presence in 500 Chinese cities and will use the proceeds from the round to strengthen its technology and enhance user experience.
Suning Sports, the sports broadcasting offshoot of China-based retail and commerce conglomerate Suning, closed a $600m series A round co-led by Alibaba. Goldman Sachs co-led the round, which included artificial intelligence technology provider SenseTime, property developer Evergrande Group and subsidiaries of banks CCB International, Minsheng Bank and ABC International. The round reportedly valued Suning Sports at $2.6bn. Suning Sports owns the broadcasting rights to several large sporting competitions, particularly in football where it holds the rights for China’s domestic league, England’s Premier League, Spain’s La Liga and Germany’s Bundesliga, as well as the Asian Champions League.
China-based online audio streaming platform Ximalaya completed a RMB4bn ($580m) funding round featuring Tencent. The round also included Goldman Sachs and growth equity firm General Atlantic and valued Ximalaya at approximately $3.5bn post-money. Founded in 2012, Ximalaya operates an online repository for audio content such as podcasts and radio shows covering music and information. It reportedly has more than 40 million registered users, of which 6 million are daily active users. The company has partnerships in place with carmakers BMW and Ford, which offer the service as part of their in-vehicle entertainment systems, and smart device producers Haier, Skyworth and Midea, which employ it in their home devices.
US-based robotics software provider UiPath completed a $568m series D round featuring CapitalG, the investment arm of Alphabet formerly known as Google Capital. Investment manager Coatue Management led the round, which included Dragoneer, Wellington Management, Sands Capital, Accel, Sequoia Capital, IVP, Madrona Venture Group and funds and accounts advised by T. Rowe Price Associates. The round was closed at a $7bn post-money valuation. UiPath has developed robotic process automation (RPA) software that helps companies automate parts of their business by programming robots with new skills, enabling them to fulfil a wider range of repetitive tasks.
China-based online tutoring service VIPKid raised $500m in series D+ funding from a consortium co-led by Tencent. Tencent co-led the round along with Coatue Management, Sequoia Capital and Yunfeng Capital. It reportedly valued VIPKid at RMB20bn ($3.1bn). Founded in 2013, VIPKid operates a platform that offers real-time, one-to-one English tutoring. It employs more than 40,000 teachers from North America and has attracted more than 300,000 students across 35 countries to date. The funding will enable the company to add more educational content including online textbooks, introduce additional tools and services for teachers and develop machine learning technologies that can drive future products.
There were other interesting deals in emerging IT-focused businesses that received financial backing from corporate investors from other sectors.
SoftBank committed almost $1bn in China-based image recognition technology provider SenseTime via its SoftBank’s Vision Fund. The transaction reportedly valued SenseTime at $4.5bn. Founded in 2014, SenseTime produces artificial intelligence technology capable of recognising faces, vehicles and objects on a large scale. The company is increasingly moving into the augmented reality and autonomous driving sectors but its technology is utilised most thoroughly in mass surveillance systems. It is developing a software product, Viper, that will analyse data from more than 100,000 camera streams in real time.
China-based facial recognition software provider Megvii received $750m in series E funding from investors including Alibaba at a valuation of more than $4bn. The round was led by a $200m investment from Bank of China Group Investment, the private equity arm of state-owned financial services firm Bank of China. Founded in 2011 and also known as Face++, Megvii provides a software platform known as Face++ which uses artificial intelligence technology to identify faces, people and objects. The technology is used in consumer devices and retail.
Megvii accounted for another of the top rounds raised by emerging IT businesses. In July 2018, Megvii raised $600m in a funding round also featuring Alibaba. The corporate was reportedly joined in the round by investment firm Boyu Capital.
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 together with a number of corporate venture capital funds of unnamed, China-based car manufacturers. Horizon Robotics’ valuation was reprtedly “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, the telecoms subsidiary of SK Group, which entered into a cooperation agreement in November 2018 to use Horizon’s algorithms to develop smart retail stores.
China-based network security products vendor Beijing Qianxin Technology raised more than RMB3.73bn ($548m) in funding from telecoms equipment manufacturer China Electronics Corporation (CEC). CEC obtained a 22.6%. The deal reportedly valued Qianxin at $2.4bn. The corporate became Qianxin’s second largest shareholder, behind chairman and CEO Qi Xiangdong, who is also co-founder and president of cybersecurity software provider Qihoo 360. Qianxin was spun out of Qihoo 360 to develop network security products and services that perform activities such as tracking of phishing threats in real time and thwarting distributed denial of service attacks, in addition to a cloud-based antivirus and anti-malware platform. The company’s clients include government departments, state-owned enterprises and large financial services firms in China, and it has also expanded into Indonesia, Singapore and Canada.
US-based data warehousing technology provider Snowflake Computing completed a $450m funding round which included Capital One Growth Ventures, the strategic investment subsidiary of financial services firm Capital One. Venture capital Sequoia Capital led the round, which valued Snowflake at $3.5bn pre-money. Altimeter Capital, Iconiq Capital, Madrona Venture Group, Redpoint Ventures, Sutter Hill Ventures, Meritech Capital and Wing Ventures also invested. Snowflake has created a data warehousing platform for the cloud that enables businesses to store and manage large quantities of data across multiple clouds. It will put the latest funding toward expanding its engineering and sales teams as it looks to add to its product range.
IoT technology developer G7 Networks secured $320m in funding from investors including oil and gas supplier Total, Tencent and logistics services provider Global Logistics Providers (GLP). The round was led by Hopu Investments and included Bank of China Investment, a subsidiary of financial services firm Bank of China, as well as China Broadband Capital, Intelligent Fund of Funds, Mount Morning Capital and TH Capital. Founded in 2010, G7 Networks operates a software platform that relies on IoT devices to track and monitor trucks within a provider’s own fleet and subcontracted vehicles. The system calculates predicted arrival times and tracks driving aspects such as speeding and fuel anomalies and is used to track more than 800,000 vehicles for more than 60,000 clients.
The SoftBank Vision Fund invested $300m in US-based robotics automation technology developer Automation Anywhere at a reported valuation of $2.6bn post-money. Founded in 2003, Automation Anywhere has developed robotic process automation (RPA) technology that enables enterprise customers to automate everyday business processes. The company’s product offering includes a central RPA platform, an artificial intelligence bot called IQ Bot and a predictive analytics tool dubbed Bot Insight. It also operates its own app store which sells bot applications.
Exits
Corporate venturers from the IT sector completed 92 exits between June 2018 and May 2019 – 63 acquisitions, 27 initial public offerings (IPOs), one merger and one stake sale.
US-based on-demand ride service Uber, which counts with a range of corporate investors as backers, including Alphabet and Baidu, raised $8.1bn when it went public on the New York Stock Exchange. This was a long-awaited IPO of what was for long the most highly valued unicorn in the venture capital realm. Uber issued 180 million shares, priced at $45.00 each, near the bottom of the $44 to $50 range it had set earlier. Founded in 2009, Uber runs an app-based on-demand ride service spanning 63 countries in addition to food delivery and last-mile delivery services. Its core ride hailing service boasts 91 million monthly active users and its UberEats offering 15 million. It recently spun off an autonomous driving subsidiary called Uber ATG, which received $1bn in funding from automotive manufacturer Toyota, automotive components producer Denso and SoftBank.
China-based consumer electronics producer Xiaomi, which counts Qualcomm as an investor, raised $4.72bn in its IPO on the Hong Kong Stock Exchange. The company priced roughly 2.18 billion shares at the low end of the HK$17 to HK$22 ($2.17 to $2.80) range it had previously set. The price valued Xiaomi at about $54bn. The offering was originally intended to be a dual offering that would have raised up to $10bn, but Xiaomi was forced to drop the Shanghai portion, reportedly after failing to answer several questions from Chinese regulators. Founded in 2010, Xiaomi designs and manufactures smartphones as well as other electronic devices such as smart home products, tablets and televisions which are connected through its MIUI operating system. It made a RMB43.8bn ($6.6bn) net loss in 2017 from revenues of RMB115bn.
China-based local services platform Meituan Dianping raised $4.22bn in an IPO that included a $400m investment by Tencent. The latter was joined as a cornerstone investor by asset manager Oppenheimer, which bought $500m of shares, hedge fund Lansdowne Partners ($300m), investment advisory firm Darsana Capital Partners ($200m) and the government-backed China Structural Reform Fund ($100m). Meituan Dianping issued 480 million primary shares on the Hong Kong Stock Exchange priced at HK$69 ($8.79) each, near the top of the IPO’s HK$60 to HK$72 range. The offering valued the company at about $52bn. Established through the 2015 merger of group buying platform Meituan and restaurant listings service Dianping, Meituan Dianping now operates an online portal that links to a range of services including food delivery, travel booking and event ticketing.
Networking equipment manufacturer Cisco Systems agreed to acquire Duo Security, a US-based authentication software provider backed by human resources software producer Workday and Alphabet. Cisco will pay $2.35bn in cash and assumed equity awards for Duo’s outstanding shares, warrants and equity incentives on a fully-diluted basis. Founded in 2009, Duo Security operates a cloud-based user verification platform that uses two-factor authentication, where a user has to enter a unique, time-limited code in addition to their password, to prevent data breaches, credential theft and unauthorised account takeover. The technology also assesses the trustworthiness of each device used to log in and restricts access unless both the user has been verified and the device meets company-defined security criteria.
US-based on-demand ride provider Lyft – which counts several corporate investors among its backers including Alphabet – raised $2.34bn in its awaited IPO, in which it floated at the top of its range. Lyft issued 32.5 million shares priced at $72.00 each. It initially planned to issue almost 30.8 million shares priced between $62 and $68 each, before upgrading the range from to $70 to $72 earlier this week. The company was reportedly valued at $24.3bn in the offering. Founded in 2012, Lyft runs a ride hailing platform that facilitated rides for some 30.7 million users in 2018, through a network of about 1.9 million drivers. It made a $911m net loss in 2018 from approximately $2.16bn in revenue.
Pinduoduo, the China-based group buying platform backed by Tencent, raised approximately $1.63bn when it floated in the US. The company priced the IPO at the top of its $16 to $19 range, issuing 85.6 million American depositary shares (ADSs) on the Nasdaq Global Select Market. The flotation valued Pinduoduo at $23.8bn including all outstanding share options. The IPO was reportedly oversubscribed 20-fold and the buyers included Fidelity Investments and Abu Dhabi-owned sovereign wealth funds. Pinduoduo’s group buying platform enables multiple buyers to form groups, either on the platform itself or through social media networks, to buy items in bulk at discounted rates. It made an $83.7m net loss in 2017 from $278m in revenue, counting more than 343 million active users.
US-based business planning enterprise software developer Adaptive Insights, which counted Salesforce and Wells Fargo’s venturing firm NPV among its backers, agreed to an acquisition by cloud-based human resources management platform Workday for $1.55bn. At the time of the announcement, Workday revealed plans to integrate Adaptive Insights’ platform into its own suite of applications. The transaction was announced three weeks after Adaptive Insights had filed for a $100m IPO. Founded in 2003 as Adaptive Planning, Adaptive Insights runs a software-as-a-service cloud-based platform which enables businesses to build models of their operations and collaborate on planning while analysing performance data.
Enterprise software supplier Blackberry agreed to acquire US-based cybersecurity technology provider Cylance, allowing Dell and financial services firms Citi and Capital One to exit. The deal consisted of $1.4bn in cash and the assumption of unvested employee incentive awards. Cylance produces predictive endpoint cybersecurity products that utilise 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.
Nio, the China-based smart electric car developer that counts domestic corporates Tencent, JD.com, internet group Baidu and electronics manufacturer Lenovo as investors, raised approximately $1bn when it floated on the New York Stock Exchange. The IPO consisted of 160 million ADSs priced at $6.26 each, almost at the bottom of the $6.25 to $8.25 range the company had set earlier. It valued Nio at $6.4bn. Founded in 2014 as NextEV before officially rebranding in July 2017, Nio is working on plug-in electric cars fitted out with features including in-built artificial intelligence and autonomous driving systems. Nio’s first model, the EP9 supercar, was released in 2016, and it launched its first commercial model, a seven-seater sports utility vehicle known as the ES8, in December 2017.
Farfetch, the UK-based fashion e-commerce platform backed by media group Advance Publications, JD.com and It company Internet Data Group – went public in an IPO which raised approximately $885m. The company issued just over 33.6 million shares on the New York Stock Exchange while its shareholders sold an additional 10.6 million. The shares were priced at $20 each, above the IPO’s $17 to $19 range, giving it a market cap of about $5.8bn. Founded in 2008, Farfetch operates an online marketplace for luxury and high-end fashion items, selling pieces from almost 1,000 producers to a 2.3 million-strong customer base worldwide. Farfetch increased revenue 55% year on year to almost $268m in the first half of 2018, though its losses increased from $29.3m to $68.4m over the same period.
Global Corporate Venturing also reported several exits of emerging IT-related enterprises that involved corporate investors from different sectors.
Application services provider F5 agreed to acquire US-based app development technology producer Nginx for approximately $670m in a deal, giving an exit to telecoms firm Telstra. Nginx was founded in 2011 to market the open-source web server and application delivery software of the same name. The company offers a premium version helping enterprises deliver content rapidly and securely, and the software is used in some 375 million websites, often for load balancing, where multiple workloads are distributed across several computing platforms.
Cisco agreed to acquire US-based fabless semiconductor maker Luxtera in a $660m deal, giving electronics producer Tokyo Electron an exit. Luxtera manufactures optical transceivers made with silicon photonics for use in data centres and service providers, enhancing performance and reducing cost. Cisco will integrate the company’s technology across its intent-based networking product range, and it is expected to improve the corporate’s optical transceiver portfolio. Luxtera’s employees will report to David Goeckeler, general manager of Cisco’s networking and security business.
Treasure Data, a US-based real-time data management platform backed by marketing firm Dentsu, was acquired by Arm, the semiconductor subsidiary of SoftBank, for approximately $600m.The deal was thought to form part of a push into the internet-of-things sector by Arm. Founded in 2011, Treasure Data has created an enterprise customer data platform that uses machine learning and artificial intelligence technologies to extract real-time insights into users across channels such as apps and phone calls.The data can then be used to provide personalised offerings for customers. The company targets the internet-of-things, automotive, entertainment and retail industries.
Cybersecurity technology provider Palo Alto Networks agreed to acquire container security software developer Twistlock for approximately $410m in cash, giving Dell an exit. Twistlock has built a cybersecurity platform that protects cloud-native container systems such as Docker and Kubernetes, using machine learning to track normal app behaviour and scaling accordingly to detect any changes that could point to security issues. The product also offers visual maps showing the security status of applications in real time, and automatically blocks activity and processes that are flagged up as anomalous.
Avnera, a US-based fabless semiconductor producer backed by corporates including Intel, electronics producer Panasonic, retailer Best Buy, communications technology provider Polycom and audio equipment maker Onkyo, agreed to a $405m acquisition by semiconductor company Skyworks Solutions. Skyworks agreed to pay $405m in cash in an upfront transaction, with up to $20m in additional capital due if Avnera meets certain performance target. Founded in 2004, Avnera designs analogue system-on-chips that facilitate the production of consumer products such as wireless home cinema systems or gaming headsets that require low power consumption. The company’s technology will enhance Skyworks products in fields such as smart voice assistants and vehicle in-dash systems.
Business communications technology supplier Vonage Holdings agreed to acquire US-based customer service technology provider NewVoiceMedia in a $350m deal that gave Salesforce an exit. NewVoiceMedia has developed a cloud software platform that integrates with an organisation’s existing customer relationship management software, bringing together all its communications channels in a single place to help staff contact customers more effectively.
IT management software provider SolarWinds agreed to acquire Samanage, a US-based employee service management platform developer backed by enterprise software producer Salesforce, for $350m. Founded in 2007, Samanage operates a cloud-based software platform that facilitates IT service management, offering features such as a unified interface for support tickets and procurement tools, applying artificial intelligence to automate certain processes. SolarWinds expects Samanage’s offering to complement its on-site IT infrastructure management software, helping to cover the requirements of customers ranging from small and medium-sized enterprises to large corporations.
Funds
For the period between June 2018 and May 2019, corporate venturers and investing in the IT sector secured over $8.76bn in capital via 57 funding initiatives, which included 34 VC funds, 15 new CVC subsidiaries, four accelerators and four other initiatives.
On a calendar year-to-year basis, the number of funding initiatives in the IT sector went down to 70 in 2018, versus the 101 registered in 2017, and also significantly down from the peaks of 144 and 148 such initiative reported in 2015 and 2016. The total estimated capital also decreased– it stood at $9.93bn by the end of last year, down 61% from the $25.66bn in 2017. In 2019, the respective dollar figure stood at $3.96bn just over the first five months of the year.
China-based venture capital firm Fortune Venture Capital secured RMB4.63bn ($667m) for its latest renminbi-denominated fund, from limited partners including property developer Century Golden Resources Group. Financial services firm Industrial and Commercial Bank was also among the LPs, as was Shenzhen Yunneng Fund, Kpeng Capital and the city of Shenzhen’s guidance fund. Founded in 2000, Fortune VC focuses on the technology, media and telecoms; consumer goods and services; agricultural technology and cleantech spaces. Its portfolio includes electronics recycling service Aihuishou and browser developer Red Core Security.
Taiwan-based electronics contract manufacturer Foxconn partnered the municipal government of Jinan in China to form a RMB3.75bn ($545m) fund aimed at the semiconductor sector. Foxconn has committed to setting up five integrated circuit design companies and one high-performance chip developer in Jinan, all of which are expected to benefit from the fund. The corporate has also spun off its existing semiconductor projects into a new unnamed company that will manage four existing chip-focused subsidiaries of Foxconn: Fitipower Integrated Technology, Foxsemicon Integrated Technology, ShunSin Technology Holdings and Socle Technology. Sharp, the consumer electronics product maker acquired by Foxconn in 2016, will reportedly also offer its chip production services to the joint venture, though further details of that deal did not emerge.
Japan-based venture capital firm Globis Capital Partners unveiled a ¥36bn ($321m) first close for its sixth fund, with commitments from limited partners including insurance provider Sompo Japan Nipponkoa Insurance. Tokio Marine Asset Management, the investment management arm of insurance firm Tokio Marine, also backed the fund, dubbed Globis Fund VI, as has financial holding company Sumitomo Trust through its Japan Vintage Fund 2019. Financial services firms Sumitomo Mitsui Banking Corporation and Bank of Yokohama are also among the limited partners (LPs). The fund will invest up to $45m in each portfolio company. Globis Fund VI will focus on technologies such as AI, IoT and blockchain, and also offer assistance with management development and staff recruitment.
SoftBank established a $300m corporate venturing fund in China in partnership with a subsidiary of private equity group TPG. SoftBank participated in the venture through SoftBank Ventures Korea, the Korea-based, internationally-focused fund it set up in 2000, while TPG is represented by its TPG Growth division. China Ventures Fund I will back early-stage companies focusing on areas such as AI, deep tech, digital media and online content. It will be managed by SoftBank Ventures Korea CEO JP Lee and Jason Ding, a managing director of TPG Growth.
SK China, a local subsidiary of South Korea-based telecoms conglomerate SK Group, put ₩300m ($266m) into a fund created by Legend Capital, the VC firm formed by conglomerate Legend Holdings. The fund will focus on early-stage companies in the IT and healthcare industries based in China and across Asia. SK China expects its contribution will enable it to expand its business in the country. SK China runs a group of real estate, energy and rental car businesses in China. Its parent SK Group previously became a limited partner in a $600m fund for Legend Capital but it is unclear if this was the same vehicle.
Latitude Venture Partners, the Indonesia-based venture capital and business development vehicle affiliated with conglomerate Sinar Mas, secured $200m in capital. Latitude targets investments in growth-stage companies that can bring value to Indonesia, where Sinar Mas is also based. Sectors of interest to the firm include financial, industrial, healthcare and artificial intelligence technology. Sinar Mas already operates a corporate venturing unit known as Sinar Mas Digital Ventures and is a partner in EV Growth along with internet company Yahoo Japan and VC firm East Ventures. Latitude is headed by Linda Wijaya, formerly CEO of paper producer Asia Pulp and Paper and a shareholder in Sinar Mas, as managing partner. Partner YC Ng was the founder and managing partner of Hawthorn Capital, a firm that made VC investments on behalf of family offices.
NewMargin Ventures, a China-based investment firm backed by food producer Kerry Group and telecoms equipment provider Motorola Solutions, reached the first close of a RMB10bn ($1.48bn) fund. The fund raised approximately $187m from limited partners including state-owned conglomerate China Everbright and two government-backed funds. Founded in 1999, NewMargin Ventures focuses on high-margin manufacturing and state-owned enterprises, as well as civil-military integration, a national strategy designed to transfer technologies from military and defence research to civilian-focused industries. The latest fund will target information technology and new materials, investing in companies producing high-end chips, industrial robotics and automation technology. NewMargin identified Kerry Group, Motorola Solutions, hotel manager K.Wah Group, mobile device producer Alcatel and Sunevision, the technology arm of property developer Sun Hung Kai Properties, as investors.
US and UK-based venture capital firm AV8 Ventures closed its €150m ($170m) debut fund after securing the full amount from insurance firm Allianz. AV8 will invest in seed and series A-stage startups in the digital health, big data, AI, mobility and enterprise technology sectors. By the time of the announcement, the fund had already been investing for approximately a year and currently boasts seven portfolio companies including Locomation, an autonomous trucking technology spinout of Carnegie Mellon University. The portfolio also included women’s healthcare platform Alpha Medical and Contract Wrangler, which relies on machine learning to extract information from vast quantities of contracts, as well as weather forecasting service PlanetIQ.
Australia-based fund manager Main Sequence Ventures added A$132m ($94.8m) to its Csiro Innovation Fund 1 from investors including aerospace and defence equipment manufacturer Lockheed Martin. University of Melbourne, superannuation fund Hostplus and Singaporean government-owned investment firm Temasek also contributed to the fundraising, which increased the size of Csiro Innovation Fund 1’s to $167m, $23m above its original target. Csiro committed $21.5m to the fund, taking the capital from its royalties on wifi, the wireless networking technology invented by the institute, while the government injected $50.3m. The fund specifically invests in domestic spinouts and small and medium-sized enterprises, with a focus on quantum computing, health, space and agricultural technology.
Philippines-based diversified conglomerate Ayala launched a $150m corporate venture capital fund. The fund will be the largest in the country if it reaches its targeted close. It will seek out opportunities in areas such as AI, fintech, automation and battery technologies, as well as other areas relevant to Ayala’s subsidiaries. Ayala intends to raise the capital from its subsidiaries, which cover sectors such as retail, education, financial services, telecoms, water utilities and renewable energy, IT, public transport, car manufacturing, healthcare, logistics and business process outsourcing. Kickstart Ventures, the investment arm of telecoms firm Globe Telecom, was tasked with managing the fund. Globe Telecom is a joint venture between Ayala and telecoms provider Singapore Telecommunications, and Kickstart currently has more than 20 companies in its portfolio.
Raystone Capital, the investment arm of China-based mobile games developer Raystone, closed its latest growth fund at RMB1bn ($148m). The fund will target China-based growth-stage companies working on AI technologies that could be used in sectors such as smart manufacturing and digital healthcare. State-backed venture capital fund National Venture Capital Fund for Emerging Industries is a limited partner in the entity, as are funds backed by the city of Shenzhen’s municipal government, with the government-owned vehicles contributing 25% of the total. Shenzhen Longgang District Venture Capital Guiding Fund and Shenzhen government-backed fund-of-funds Kunpeng Fund also participated in the fundraise.
People
Intel Capital, the corporate venturing subsidiary of Intel, experienced significant changes in terms of its talent pool. The changeover process from former head Arvind Sodhani to Wendell Brooks, led to the departure of a number of senior executives. In 2018, Intel Capital reinstated a carried interest compensation policy for employees and moved towards backing a smaller number of deals with larger amounts.
Intel Capital´s team has gone from about 115 employees in 2014 to about 68 in 2018, according to data uncovered by Global Corporate Venturing from Intel, LinkedIn and other public sources, although a number of Intel Capital people have rotated from and back to the parent company, such as Arturo Litvin, Curtis McKee, Eric King, Erica Wu, Greg Scott, Manish Tangri and Vijay Reddy. Last year, Intel Capital also laid off a quarter of its investment team, as the firm moved to a model where it makes a smaller number of larger deals more closely related to its parent company’s core business.
One of the team members who left was Christine Herron, an early-stage investor who was also co-lead of Intel Capital’s Diversity Initiative – formerly known as the Diversity Fund – a program that backs founders who are female or in underrepresented minority groups, as well as those who are lesbian, gay, bisexual or transgender, disabled or veterans. Herron now works as an advisor at Bullpen Capital.
Sanjit Singh Dang, investment director at Intel Capital since 2009, left to set up a corporate-focused venture capital service. Singh Dang co-founded U First Capital as chairman with partner Ekta Dang, who is CEO. It will assist corporations in accessing external innovation through tie-ups with entities such as startups and universities. Before joining Intel Capital, Singh Dang had worked as an engineer at the chipmaker for nine years.
Larry Cook, former finance director at Intel Capital, joined investment firm Omidyar Network as head of operations for its Financial Inclusion division. During his five-year stint at Intel Capital, Cook managed equity investments and M&A strategy across the firm’s artificial intelligence, data centre and autonomous driving portfolios. Cook’s deals included Intel Capital’s investment in enterprise data software provider Cloudera. In previous roles at Intel, Cook was finance business manager for sales and marketing, working with accounts held by computing equipment producers Dell and HP. He was also a strategic financial analyst for Intel’s Flash Memory group, having joined the company in 2006.
Hiren Majmudar, vice-president at Intel Capital joined its portfolio company SiFive, a fabless provider of customised semiconductors. SiFive, which hired Majmudar as a VP of business development, makes customised semiconductors based on Risc-V semiconductor intellectual property core. Majmudar was initially hired by Intel in 1993 in an engineering capacity before he was appointed in 2000 as a director of electronic design automation (EDA) support for five years and director of software development tools and technical marketing for a year. After a one-year spell at EDA software producer Magma Design Automation, Madmudar returned to Intel in 2008 as a director of IP engineering, focusing again on EDA.
Nikesh Arora, who left SoftBank where he spearheaded its corporate venturing strategy as company president and chief operating officer in 2016, became CEO and chairman of cybersecurity company Palo Alto Networks. Arora replaced long-time executive Mark McLaughlin, who will become vice chairman of Palo Alto Networks. Arora joined SoftBank in late 2014 from Google where he had served as chief business officer, and directed SoftBank to lean more towards larger investments, notably in his home country of India.
Tony Chao left his position as senior investment director and general manager at Applied Ventures, semiconductor maker Applied Materials’ corporate venturing unit, to assume a new role at venture capital firm Tyche Partners. “After a decade in CVC and at Applied Ventures, I have accepted a partner position with Tyche Partners,” Chao said. Chao had joined Applied Ventures in 2007 and had been senior investment director and general manager of Applied Ventures since 2015. Chao led the charge for Applied Ventures into Asia first by serving as an expatriate in Shanghai and then opening operations in Singapore and finally a Korea fund. Tyche Partners invests in disruptive technologies such as cloud and enterprise data storage, 3D printing, robotics, semiconductors and internet-of-things and wearable devices. Chao was succeeded by Rajesh Swaminathan, an investment director who has been at Applied Ventures since 2009.
Patrick Eggen left Qualcomm’s corporate venturing unit, Qualcomm Ventures, where he was managing director for North America, to launch a new venture capital fund. The fund, Counterpart Ventures, was co-founded by Eggen and Joe Saijo, who was formerly president and managing director of Recruit Strategic Partners (RSP), a corporate venturing subsidiary of human resources firm Recruit, with both taking partner positions. Counterpart will provide between $2m and $8m for companies and is stage-agnostic. It did not reveal the areas in which it plans to invest but the co-founders said the investments will have an “emphasis on speed, conviction and partnership”.
Miles Kirby and George Ugras co-founded UK and US-based venture capital firm AV8 with a $180m fund committed by insurer Allianz. AV8 will mainly invest in seed and series A-stage deals in digital health, big data, artificial intelligence, machine learning, mobility and robotics, according to Angel.co. Prior to AV8, Ugras was head of IBM Ventures, the eponymous computing technology provider’s corporate venturing arm. Ugras initiated his VC career investing in early-stage technology companies, first at Apax Partners as a principal then at Adams Capital Management as a partner. Kirby, on the other hand, had been a director at Oxford Capital’s growth investments team before launching AV8. Prior to joining Oxford Capital, he had spearheaded US-based technology provider Qualcomm’s European unit as a managing director from 2012 to 2015. During his time at Qualcomm, he devised an internal incubator which specialised in augmented reality, wireless charging and machine learning.
Abhishek Shukla joined enterprise technology producer Hewlett Packard Enterprise (HPE)’s corporate venturing vehicle, Pathfinder, as managing director of global venture capital investments. He replaced Ray Schuder. Shukla came from GE Ventures, the corporate venturing vehicle for US-headquartered power and industrial equipment maker General Electric, where he was managing director of software investments. GE Ventures had hired Shukla in 2016, initially as director of software investments, before being promoting him in February 2017. Shukla had previously spent two years as senior manager of corporate development and venture investments at Cisco, after nearly five years in a similar role at Hewlett-Packard spinoff Agilent Technologies.
Christoph Lymbersky, formerly a partner at Germany-based consulting firm M2P Consulting’s venture capital arm, M2P Venture & Capital Partners, took a managing partner position at Global Ventures. Germany-based investment bank Global Ventures seeks to invest in developers artificial intelligence, financial services, internet-of-things and mobility technology, targeting early-stage companies ranging from seed to series B stage. M2P hired Lymbersky in October 2017 to head Venture & Capital Partners. He had previously been managing director of T-Venture, the corporate venturing subsidiary of telecoms firm Deutsche Telekom that has since evolved into Deutsche Telekom Capital Partners.
Itxaso del Palacio, formerly a partner at software provider Microsoft’s corporate venture capital unit, M12, was appointed as an investment director at UK-based venture capital firm Notion Capital. Del Palacio joined M12, formerly known as Microsoft Ventures, in 2017, helping to launch its UK office in London and managing its business-to-business (B2B) technology deal flow in Europe. At M12, Del Palacio led financing rounds for, and held board positions at, background and credentials checking service OnFido, human resources software developer Beamery, language processing and translation software provider Unbabel and data anonymisation startup Hazy.
Gretchen Howard, a partner at Alphabet’s growth equity arm CapitalG, left to join US-based online trading platform Robinhood. Howard ended a four-year spell at CapitalG to become a vice-president at Robinhood. She had helped source CapitalG’s first investment in Robinhood, a $363m series D round that valued the company at $5bn. She was also involved in CapitalG’s investments in fintech platform Credit Karma, ridesharing app Lyft, home rental marketplace Airbnb and food delivery service Gusto. Howard joined Google in 2006 as a manager director in sales and business operations and the co-site lead of Alphabet’s internet subsidiary Google’s San Francisco office.
David Schenkein, former chief executive of biopharmaceutical company Agios Pharmaceuticals, was hired by GV, a corporate venturing subsidiary of Alphabet, as a general partner. In the new role, Schenkein will co-lead GV’s life sciences investment team, which also features fellow general partners Blake Byers and Krishna Yeshwant. Schenkein had joined Agios in 2009 and helped transform the company from a preclinical-stage startup to a business with two US-approved cancer drugs in the market. Prior to joining Agios, Schenkein was the senior vice-president of clinical haematology and oncology at pharmaceutical company Genentech, after five years at Millennium Pharmaceuticals where he oversaw the clinical development of Velcade, a cancer therapy aimed at treating non-Hodgkins lymphoma.
Thomas Whiteaker left his managing partner position at venture capital firm Propel Venture Partners, to join IBM Ventures as partner. Whiteaker had spent three years at Propel, the VC firm formed in early 2016 to invest in financial technology developers on behalf of financial services firm BBVA. Whiteaker had previously been an executive director at BBVA’s strategic investment vehicle, BBVA Ventures, which spun out into Propel Venture Partners when the latter was formed, since 2012. BBVA Ventures had hired Whiteaker following four years at Hartford Ventures, the corporate investment unit for US-based insurer Hartford Financial Services Group. He had previously led investments in e-commerce, security and authentication for Visa Ventures, the corporate VC arm of payment services firm Visa.
Scott Levine left his managing director position at WarnerMedia Investments, media group Warner-Media’s now-defunct corporate venturing unit, to join Samsung Catalyst Fund, which is owned by Samsung. WarnerMedia Investments, formerly known as Time Warner Investments, had hired Levine in 2011 and he was responsible for investments in digital media startups. WarnerMedia Investments’ deals in which Levine participated included investments in video technology software providers You.i TV and Conviva, as well as virtual reality technology developers 8i and NextVR. Levine also oversaw funding for portfolio companies that were later acquired, such as data management developer Krux, which was bought by Salesforce for about $700m, and online video content producer Maker Studios, which was acquired for $500m by Walt Disney.
Elliott Robinson left his partner position at software provider Microsoft’s M12 Ventures, for venture capital firm Bessemer Venture Partners where he will be a growth equity investor. At Bessemer, Robinson will concentrate his efforts on growth investments and look to partner entrepreneurs building SaaS and cloud software companies. Robinson joined M12 in 2016, having come from Canada-based growth equity firm Georgian Partners where he was vice-president. During his time at M12, Robinson focused on early to growth-stage investments in AI, ML, cybersecurity, big data analytics, cloud infrastructure and enterprise software-as-a-service (SaaS) technology developers.
Robert Keith, principal at Salesforce’s corporate venturing arm, Salesforce Ventures, was promoted to head of Australia. The move involved Keith relocating to the unit’s Sydney office and it came as Salesforce Ventures launched its $50m Australia Trailblazer Fund, to invest in Australia-based startups that develop cloud-based enterprise software. Prior to joining the unit in 2014, Keith worked on the IPO for life sciences-focused CRM application provider Veeva, which represented one of Salesforce Ventures’ first IPO exits, as an investment banking analyst at financial services firm Morgan Stanley.
Balaji Gopinath and Ron Yerkes left SAP.IO, Germany-based enterprise software provider SAP’s corporate venturing fund, at the end of 2018 to launch a venture capital firm dubbed Twelve Venture Capital. Gopinath joined SAP.IO Fund as global vice-president following its formation in 2017 and Yerkes was hired as a director later. Yerkes was involved in startup engagement for the unit, while Gopinath conducted seed and series A deals in the AI, blockchain, big data, industrial IoT and business-to-business (B2B) sectors. Gopinath also helped set up SAP.IO Foundries, an accelerator that works with more than 50 B2B-oriented startups per year across the cities of Paris, Berlin, Munich, Tel Aviv, Tokyo, Singapore, New York and San Francisco.
China-based facial and image recognition software provider SenseTime hired Jennifer Xuan Li from Baidu as an investment director. Li had been a strategic investment director at Baidu’s artificial intelligence group since late 2015, before leaving to take the SenseTime role. Prior to her stint at Baidu, Li had spent a little over a year as an investment banking analyst at financial services firm Deutsche Bank’s mergers and acquisitions team, having previously worked in analyst roles for UBS and Canaccord Genuity.
LG Technology Ventures, the recently launched strategic investment arm of South Korea-based electronics producer LG, hired Taejoon Park from fellow corporate venturing unit Applied Ventures as an investment director. Park had assumed several roles at Applied Ventures, semiconductor technology producer Applied Materials’ corporate venturing unit, after joining in 2012, most recently being promoted from senior investment associate to investment principal in early 2016. ELG Technology Ventures is equipped with $400m from LG and subsidiaries LG Chem, LG Display and mobile carrier LG Uplus, and will invest in developers of technologies such as artificial intelligence, robotics and auto components.
Karthik Subramanian, formerly head of cybersecurity investments and acquisitions at Cisco Investments, Cisco Systems’ corporate venturing unit, accepted a partner position at growth equity firm Evolution Equity Partners. Subramanian will also be responsible for leading investments in the cybersecurity, enterprise software, IoT, cloud and analytics sectors. Subramanian had been involved in several endeavours during his nearly five-year stint at Cisco Investments. He led investments in 11 cybersecurity companies including cybersecurity software developer Verodin and acquired assets with a cumulative deal value of over $3.7bn.
Jim Brisimitzis left Microsoft, where he headed its Microsoft for Startups initiative, to take a managing partner role at venture capital and accelerator group Quake Capital. Brisimitzis is now based at Quake’s Seattle office, helping the firm in its fundraising and expansion plans and taking charge of corporate development and outreach. Microsoft has put $500m of funding behind Microsoft for Startups, which offers early-stage cloud software developers the opportunity to distribute products to its existing customer base in addition to providing more conventional accelerator resources such as expertise and technology. The unit had been headed by Brisimitzis as general manager of cloud development relations since it was established in 2015. He had previously spent almost 18 months as head of operations and growth programs for M12. Microsoft had hired Brisimitzis in 2005 and he had worked with original equipment manufacturer server product, channel management and product marketing before joining Microsoft Ventures.
Di-Ann Eisnor, a director at internet technology provider Google’s Area 120 incubator, joined US-based venture capital firm Obvious Ventures as a venture partner. Eisnor took a position at Area 120, which enables teams from within Google to pitch ideas and, if accepted, develop them full-time. As a venture partner at Obvious Ventures, Eisnor will be responsible for adding startups to the firm’s urban infrastructure portfolio, which includes electric vehicle charging service Amply, distributed energy platform Enbala and construction materials supplier Plant Prefab. Eisnor worked for Google since 2013 when it acquired Waze, the traffic navigation platform developer where she had been director of growth since 2009, a position she retained post-acquisition. Prior to joining Waze, Eisnor was co-founder and CEO of collaborative mapping website Platial and co-founded entrepeneurship micro fund Neighborhood Start Fund.
Vinícius Scaramel, formerly an innovation area manager at construction materials producer InterCement, joined Brazil-based business management software provider Grupo Benner in September. Scaramel took an innovation and products manager role at Grupo Benner and is responsible for implementing innovation processes, promoting intrapreneurial culture, and accelerating and leading innovation projects to maximise Benner’s results. In his two-year role at InterCement, Scaramel coordinated and managed its open innovation schemes in Brazil, Argentina, Cape Verde, Egypt, Mozambique, Paraguay, Portugal and South Africa. Prior to his involvement in the innovation ecosystem, Scaramel had been an entrepreneur himself, founding waste management consulting firm Bakuara in 2008 and co-founding construction waste management system provider ConstruSave in 2015.
Kaushik Anand, head of India for Alphabet’s CapitalG, left to join A91 Partners, a mid-stage fund recently launched by former senior executives at venture capital firm Sequoia Capital. CapitalG had hired Anand in 2015, and he has led investments in automotive e-commerce platform CarDekho, maths tutoring services Cuemath, online lending platform Aye Finance and sales software provider Freshworks. Anand will explore investments in the consumer, pharmaceutical, healthcare, financial services and technology sectors. Prior to joining CapitalG, Anand was an early-stage investor at Sequoia Capital. He had previously worked as a business analyst at management consultancy McKinsey and Company and founded four companies in US and India, including Kreyada and Clever Layout.
Marcos Almeida left Brazil-based IT services firm Stefanini after more than three years leading its corporate development and venture investments. Almeida said his role covered Stefanini’s subsidiaries and affiliates, mergers and acquisitions, startups and investor relations activities, telling Global Corporate Venturing by email: “I am leaving the company to pursue a new career opportunity.” Since 2009, Stefanini had acquired stakes in about 17 companies with an eye on startups feeding into dealflow for later-stage acquisitions. Most of those deals involved the company taking controlling positions, but Stefanini also bought minority stakes and created startups.
Meredith Finn, senior director at Salesforce Ventures, who had helped launch its $50m Impact Fund, left to do “great work” for herself. Claudine Emeott, a director of Salesforce Impact Fund, now oversees the Impact Fund, having joined the unit in 2017 after a five-year stint at non-profit organisation Kiva Microfunds, which loans its $150m annual fund to low-income entrepreneurs. Finn said the fund’s launch was one of her biggest achievements.
Houman Haghighi, formerly head of business development at Qualcomm Ventures, joined venture capital firm Menlo Ventures as a business development partner. Haghighi joined Qualcomm Ventures in 2011 and was charge of investments in robotic gaming platform Reach Robotics, robotic arm developer Carbon Robotics, deep learning technology producer Clarifai and cybersecurity technology producer AttackIQ. During his time at the unit, Haghighi also founded and headed Qualcomm Robotics Accelerator, a joint effort with accelerator TechStars. His relationship with Qualcomm dates to 2003 and he held positions in engineering, project management and product development before transitioning into corporate venture capital.
Priya Saiprasad left her position as principal at M12 for a venture investor role at venture capital firm Mayfield Fund. Saiprasad was a founding member of M12 from 2016 and oversaw investments in business-to-business software providers. She was involved in funding rounds for Workboard, Go1 and Skedulo most recently. Her departure follows that of Elliott Robinson, a former partner at M12. Mayfield Fund focuses on early and growth-stage developers of consumer and enterprise technologies. It co-invested with M12 in customer engagement software developer Outreach’s series C, D and E rounds. Her role at Mayfield will involve Saiprasad concentrating on investments in AI and analytics-focused enterprise technology providers.
University backing for IT companies
By the end of 2018, there were 118 rounds raised by university spinouts, up 59% from the 74 registered in the previous year. The level of estimated total capital deployed in 2018 stood at $1.07bn, around the same level as in previous years.
SambaNova Systems, a US-based AI application technology spinout of Stanford University, raised $150m in a series B round led by Intel Capital. GV also participated in the round, as did VC firms Walden International and Redline Capital and growth equity firm Atlantic Bridge Ventures. Founded in late 2017, SambaNova is working on a software platform capable of running cutting-edge AI technology sourced from advanced research being conducted across the world. One of SambaNova’s co-founders, Kunle Olukotun, is a cadence design professor of electrical engineering and computer science at Stanford University while another, Christopher Ré, is an associate professor in Stanford’s department of computer science.
Spin Memory, a US-based random access memory (Ram) technology developer spun out from New York University, raised a $52m series B round, featuring semiconductor equipment producers Arm and Applied Materials that co-led the round, supplying $29m of equity funding alongside undisclosed new and existing investors. Applied Materials invested through its subsidiary Applied Ventures. Originally incorporated as Spin Transfer Technologies, Spin Memory is working on designs for magnetoresistive random access memory (MRam) that will be able to supplant existing Ram technologies. As computers typically use Ram to hold data and machine code as it is actively processed, deep tech applications such as AI and big data are likely to require it in abundance. Spin Memory’s MRam range will initially offer comparable speed and endurance to static Ram chips, which often handle video processing and processed cache memory in computer systems.
Cogito, a US-based voice analytics technology spinout from Massachusetts Institute of Technology (MIT), received $37m in series C funding from investors led by Goldman Sachs. Salesforce Ventures and venture capital firm OpenView Venture Partners participated in the round. Goldman Sachs provided the cash through its Growth Equity Fund. Cogito has developed a software platform for sales professionals that uses artificial intelligence and behavioural analytics to interpret involuntary cues in a customer’s speech pattern to detect frustration or calculate the likelihood that a sale will close. The software provides real-time feedback to call centre staff on how to adapt their approach and alerts supervisors to poor customer experience, giving them the chance to jump in on a call.
