With the increasing digitisation of almost everything it is hard to miss the importance that the broader IT and technology sector plays across the globe in every investment field.IT and tech enterprises develop products and services that often disrupt multiple industries, while corporate investors from the IT sector often target emerging enterprises from other sectors the world over. Slightly more than half the deals involving IT corporate venturers were in other sectors.
Over the past year corporate investors from the IT sector have been putting their money into almost every continent. The busiest geographies by number of deals have been the US, China, India and the UK.
Intel, Alphabet (the holding company for the Google search engine) and Salesforce top the ranking in terms of number of deals, while Tencent, Microsoft and Salesforce lead in terms of involvement in large deals. Intel, Salesforce and Alphabet also lead in number of deals in IT enterprises, whereas Microsoft, Salesforce and Qualcomm took part in the largest deals in emerging IT and tech enterprises.
Deals
Global Corporate Venturing (GCV) Analytics tracked 558 deals involving corporate venturers since June last year. The total capital committed in those deals amounted to almost $37.2bn. Most of the multimullion and multibillion-dollar deals with corporate investors from the broader IT sector have been led by China-based internet companies.
Top 10 deals in IT
| Company | Location | Sector | Round |
Round size |
Investors |
| Informatica | US | IT | Stake purchase |
$5,300m |
Canada Pension Plan Investment Board | Microsoft | Permira | Salesforce |
| China Internet Plus Group | China | Consumer | – |
$3,300m |
Alibaba | Capital Today | China International Capital Corporation | DST System | Tencent | TrustBridge Partners |
| Didi Chuxing | China | Transport | – |
$3,000m |
Alibaba | Capital Group | China Investment Corporation | Ping An Insurance | Tencent |
| Didi Chuxing | China | Transport | – |
$2,000m |
Alibaba | Capital Group | Coatue | Ping An Insurance | Temasek | Tencent |
| Uber | US | Transport | E and beyond |
$1,000m |
Microsoft | Times Group |
| LY.com | China | IT | – |
$966m |
Citic | Dalian Wanda Group | Tencent |
| Lianjia | China | Services | B |
$927m |
Baidu | Huasheng Capital | Tencent |
| Magic Leap | US | IT | C |
$794m |
Alibaba | Andreessen Horowitz | Fidelity | JPMorgan | KKR | Kleiner Perkins Caufield & Byers | Legendary Entertainment | Morgan Stanley | Obvious | Qualcomm | T Rowe Price | Vulcan | Warner Brothers Entertainment | Wellington Management |
| Beijing Weiying Technology | China | Consumer | C |
$693m |
China Everbright | CMC Holdings | Dalian Zeus Entertainment | IDreamsky Technology | Ocean Capital Group | Tencent |
| Pivotal | US | IT | C |
$653m |
EMC | Ford Motor | General Electric | Microsoft | VMWare |
In August 2015, US-based software provider Informatica was acquired by investment firm Permira and Canada Pension Plan Investment Board (CPPIB) for $5.3bn, securing funding from computing firm Microsoft and cloud computing company Salesforce in the process. The size of Microsoft’s and Salesforce’s stakes or their respective investments has not been disclosed. Salesforce invested through its corporate venturing unit Salesforce Ventures, while Microsoft used its Strategic Investments unit rather than Microsoft Ventures. Permira and CPPIB conducted the acquisition through an unnamed company they control jointly. Informatica’s shares have ceased trading on Nasdaq, with shareholders receiving $48.75 per share.
In January 2016, China-based local listings and group buying company China Internet Plus Holdings raised more than $3.3bn in new funding from undisclosed investors, as reported by Tech in Asia. The firm counts internet company Tencent and e-commerce group Alibaba as investors, and was created when buyer Meituan merged with local listings and reviews platform Dianping in October 2015, at which time it was valued at $15bn.
In September 2015, China-based ride-hailing service Didi Kuaidi confirmed a $3bn round backed by investors including Alibaba, insurance firm Ping An and Tencent. Ping An co-led the round with sovereign wealth fund China Investment Corp and private equity fund Capital International Private Equity Fund through its Ping An Ventures unit. The round, the largest recorded by a private company, also featured existing backers Singaporean state-backed fund Temasek and Coatue Management. Formed in February this year by a merger between taxi-hailing app developers Didi Dache and Kuaidi Dache, Didi Kuaidi remains the market leader in China, servicing 80 cities.
Earlier, in July 2015, Didi Kuaidi had raised $2bn at a $15bn valuation from investors including Ping An Ventures, as reported by Bloomberg. The round included Alibaba, Temasek, investment firm Coatue Management and Capital International Private Equity Funds, a subsidiary of investment firm Capital Group. The round follows the $742m secured from social network Sina Weibo, Coatue and Farallon Capital Management earlier in 2015, as well as the pre-merger $1.5bn raised from backers including Alibaba, Tencent, Temasek, telecoms firm SoftBank, DST Global, GGV Capital, Citic Capital Holdings, Tiger Fund, Matrix Partners and New Horizon Capital.
In August 2015, US-based ride-sharing app provider Uber Technologies raised “close to” $1bn in equity funding from investors including software provider Microsoft, the Wall Street Journal reported. The round, valuing Uber at $51bn, included India-based media conglomerate Times Group, and came directly after Uber had announced it was planning to invest $1bn to gain market share in India. The valuation is larger than Facebook’s at the time of its last private funding round in 2011.
In July 2015, conglomerate Dalian Wanda Group agreed to lead a RMB6bn ($966m) funding round for China-based online travel guide LY.com. Wanda was to provide $577m of the total funding, with the rest supplied by investors including Tencent and fund manager Citic Capital. LY.com is an online service that highlights and sells tickets to sites of local interest across China. It is currently the third-largest online travel service in the country by market share.
In April 2016, China-based real estate services provider Lianjia raised RMB6bn in a series B round featuring internet companies Tencent and Baidu, as reported by China Money Network. The round was led by Huasheng Capital, a private equity fund managed by merchant bank China Renaissance Partners, and values Lianjia, also known as Homelink, at $6.2bn, according to Bloomberg. Founded in 2001 as a bricks-and-mortar estate agent, Lianjia now runs a real estate management and asset management business that encompasses some 5,000 branches across China.
In February 2016, US-based augmented reality technology developer Magic Leap raised $793.5m in a series C round led by Alibaba. Internet technology provider Google, mobile semiconductor maker Qualcomm, which took part through its Qualcomm Ventures unit, film studio Legendary Entertainment, and media and entertainment company Warner Bros also invested in the round.
The corporates were joined by financial services group Fidelity Management and Research Company, KKR, Vulcan Capital, Kleiner Perkins Caufield & Byers, Andreessen Horowitz, Obvious Ventures, JPMorgan Investment Management, Morgan Stanley Investment Management, funds and accounts advised by T Rowe Price Associates, and Wellington Management. Magic Leap is working on augmented reality technology it calls “mixed reality lightfield”, which can superimpose ultra-realistic moving light sculptures on real-life settings.
In April this year, Weiying Technology, the China-based operator of cinema and event ticketing app Wepiao, raised RMB4.5bn in a series C+ round led by gaming company Dalian Zeus Entertainment. The round included Tencent, mobile game publisher iDreamSky, CMC Holdings, Ocean Capital Group and China Everbright, which took part through its Everbright Financial Holding Asset Management subsidiary, according to local media reports.
In May 2016, US-based software development company Pivotal Software closed a series C round at $653m. Pivotal announced it had raised $253m in new funding from carmaker Ford, which provided $182m according to Reuters, software producer Microsoft, industrial conglomerate General Electric, data management firm EMC and EMC-controlled cloud and virtualisation service provider VMWare.
Exits
Similar to investments, half of the top exits involved Asia-based corporate venturing units. In October 2015, two of China’s largest private companies, online listings and reviews service Dianping and group buying platform Meituan, agreed to a merger that Xinhua reported to be worth $15bn. The deal formed a new company dubbed China Internet Plus that combines the two, which had jointly raised more than $2.6bn from investors including internet portal Tencent, e-commerce group Alibaba, conglomerates Wanda and Fosun, and smartphone maker Xiaomi.
In January 2016, e-commerce firm Alibaba agreed to sell its stake in China-based local listings and group buying platform China Internet Plus for roughly $900m, as the Wall Street Journal reported. The company had raised $3.3bn from undisclosed investors earlier the same month, though reports as far back as November indicated that Alibaba, an investor in Meituan pre-merger, was seeking to sell a stake sized at around 7%. Alibaba was reportedly looking to divest its stake so it could focus on its own local services platform Koubei.
Top 10 exits
| Company | Location | Sector |
Exit size |
Investors List |
| Dianping | China | Consumer |
$1,500m |
Alibaba | Dalian Wanda Group | Fosun Group | Meituan | Tencent | Xiaomi |
| Cruise Automation | US | Transport |
$1,000m |
Founder Collective | General Motors | Maven | Qualcomm | Sam Altman | Spark Capital |
| China Internet Plus Group | China | Consumer |
$900m |
Alibaba | Dalian Wanda Group | Fosun Group | Tencent | Xiaomi |
| SolidFire | US | IT |
$870m |
Greenspring Associates | NetApp | New Enterprise Associates | Novak Biddle Venture Partners | Samsung | Valhalla Partners |
| Fitbit | US | Consumer |
$841m |
Foundry Group | Qualcomm | SAP [Sapphire Ventures] | Silicon Valley Bank | SoftBank Corp | True Ventures |
| Elemental Technologies | US | IT |
$500m |
Amazon | Citrix | General Catalyst Partners | In-Q-Tel | Sky | Telstra | Voyager Capital | Walt Disney | Wells Fargo (Norwest Venture Partners) |
| Ravello Systems | US | IT |
$500m |
Oracle | Qualcomm | Sandisk |
| Ticketfly | US | Consumer |
$450m |
Pandora | SAP (Sapphire Ventures) |
| Misfit Wearables | US | Consumer |
$260m |
Coca-Cola | Fossil Group | JD.com | O areilly Media | Xiaomi |
| Cliqr Technologies | US | IT |
$260m |
Alphabet | Cisco Systems | Foundation Capital | Polaris Venture Partners | Translink Capital |
In March this year, automotive manufacturer General Motors agreed to acquire Cruise Automation, a US-based driverless vehicle technology developer backed by chipmaker Qualcomm. The size of the deal was not officially confirmed but Fortune reported that is was worth over $1bn, to be carried out with cash and stock. Founded in 2013, Cruise Automation is developing technology capable of turning any car into a driverless vehicle. Following acquisition, it will retain all its 40 employees in San Francisco, and GM will invest further in the company to hire additional staff.
In December, US-based flash storage memory maker SolidFire was acquired by storage hardware company NetApp for $870m, providing an exit to consumer electronics company Samsung’s investment unit Samsung Ventures, according to Venturebeat. Founded in 2009, SolidFire produces all-flash storage products for use in data centres. The company raised a total of $150m.
In June 2015, US-based wearable products maker Fitbit closed its initial public offering at $841.2m, after the IPO’s underwriters took up the option to acquire almost 5.5 million extra shares. The company had initially sold almost 22.4 million shares at $20 each, while shareholders, Qualcomm and SoftBank, sold an additional 19.7 million.
In September 2015, e-commerce firm Amazon agreed to acquire US-based multiscreen video technology provider Elemental Technologies in a deal giving exits to several corporate investors. Neither company disclosed the price but a source told The Information that Amazon would pay over $500m in cash. The acquisition was made through its Amazon Web Services (AWS) subsidiary. The company will continue to provide its services to existing customers but will also integrate the technology more closely with AWS, helping it to introduce more complete services for media clients seeking cloud and hybrid architecture services.
In February this year, Qualcomm and flash storage technology provider SanDisk exited US-based virtualisation software developer Ravello Systems in an acquisition deal by computing technology producer Oracle. Oracle did not disclose the purchase price but a source told VentureBeat it was “close to $500m”.
In October, US-based online event ticketing technology provider Ticketfly agreed to a $450m acquisition by music discovery platform Pandora in a deal that will enable corporate-backed venture capital firm Sapphire Ventures to exit. Ticketfly began life in 2008 as an online ticket sales site and has since expanded its core business by adding a curated event function that recommends events to users.
In November 2015, fashion and watch producer Fossil Group agreed to acquire US-based wearable technology manufacturer Misfit for $260m, giving an exit to several corporate investors. Founded in 2011, Misfit offers products such as activity, fitness and sleep trackers, and the company has also expanded into connected products and home automation. The acquisition will give Fossil access to Misfit’s wearable technology platform, and it intends to incorporate that technology into its watch brands.
In March 2016, networking technology producer Cisco agreed to acquire Cliqr Technologies, a cloud computing technology provider backed by Alphabet, for $260m. Cliqr has built a cloud orchestration platform that models, deploys and manages applications across hybrid cloud environments. Users can create a single app profile through which they can manage apps across any data centre, public or private cloud.
Funds
Over the past year, we have tracked a total of 128 corporate-backed funding initiatives related to the broader IT and technology sector, including new VC funds, new venturing units, accelerators, incubators, contests and other programmes. All the initiatives have been raising an estimated total of $21.27bn.
Top four funding initiatives
| Fund | Corporate backers | Focus | Location |
Amount |
| China Media Capital fund | Alibaba, Tencent | Content creation, hardware platforms | China |
$1.6bn |
| Unnamed | TCL Corporation, Tsinghua Unigroup | Electronics, technology, media and telecoms, smart manufacturing and internet industries | China |
$1.53bn |
| IDG China Capital Fund III | IDG | Internet, mobile, consumer, healthcare, industrial, media, tourism, real estate | US |
$1bn |
| Changle Industry Fund | LeTV | Big data, artificial intelligence, entertainment | China |
$600m |
In November 2015, Tencent and Alibaba backed CMC Holdings, a new vehicle of Chinese government-backed private equity fund China Media Capital, according to China Money Network. CMC Holdings is targeting a close of RMB10bn, though it has not disclosed any further financial details. The fund will seek to identify startups in the content creation and hardware platforms sectors, and aim to foster an integrated media and entertainment ecosystem.
In February this year, electronics manufacturer TCL Corp and Chinese state-backed fabless semiconductor maker Tsinghua Unigroup jointly formed a RMB10bn investment fund. TCL Capital, TCL’s corporate venturing unit, provided approximately $138m for the fund, as has a subsidiary of Tsinghua Unigroup. The fund, which has yet to be named, could be topped up through external investors. It will invest in the electronics, technology, media and telecoms, smart manufacturing and internet industries. TCL Capital was founded in 2009 but operates mostly as a fund manager.
In December last year, China-based entertainment and hardware producer LeTV Holdings set a RMB10bn target for a corporate venturing fund – the Changle Industry Fund. The fund will back companies focused on big data, artificial intelligence and entertainment, and will be co-managed with venture capital firm Changshi Capital.
In March this year, US-based Cisco pledged to invest $500m in Germany over the next three years, a portion of which will consist of direct investments in venture capital funds. The initiative, Deutschland Digital, will assist the country with digitisation. Cisco plans to boost its investment in both startups and VC funds based in the country, with cybersecurity, cloud computing and internet of things to be prioritised.
People
In July last year Arvind Sodhani announced he would retire as head of Intel Capital, the semiconductor technology company’s corporate venturing unit, in January this year. Sodhani joined Intel in 1981 and helped form Intel Capital, one of the earliest dedicated corporate venturing units, in 1991, before taking over as president in 2005. In April this year, Sodhani set up venture capital firm Silver Trail Ventures, and warned corporate venturers to stick to venture investing rather than be functionaries for business development units. His new firm is reportedly raising $500m for its first fund.
Also in July, Joey Dai left his position as general manager of CyberAgent Ventures China, a corporate venturing subsidiary of Japan-based internet company CyberAgent, to set up a new fund, according to the Bridge. Dai, who had worked at the unit since 2007, is looking to raise about $30m for his new firm, Gravity Venture Capital. The fund is expected to close by the end of the month.
In June 2015, Fortune magazine reported that Jessica Verrilli was leaving microblogging platform Twitter for GV (formerly known as Google Ventures) as a partner. Verrilli was director of corporate development and strategy for Twitter from July 2014, focusing on the company’s acquisition strategy, deal execution and mergers and acquisitions integration.
Peter Read left his position as general partner at Google’s $100m European corporate venturing fund, according to TechCrunch, followed by the departure of Europe head Eze Vidra. Read was one of four general partners who formed the London-based fund, an offshoot of Google Ventures, in July 2014. The other founding partners, Tom Hulme and Avid Larizadeh, will remain in their posts. No reason for his departure has been given.
In August 2015, Tyson Clark left venture capital firm Andreessen Horowitz to join GV as a partner, according to Fortune. Clark had been a partner at Andreessen Horowitz since March 2015, after two and a half years as director of corporate development at computing technology provider Oracle.
GV also hired Laurence Toney as a partner on its investment team, leaving his previous role as a partner at Comcast Ventures’ Catalyst Fund and, in October, Stephen Gillett, formerly chief operating officer and executive vice-president of security software provider Symantec, joined GV as an executive-in-residence. Gillett is also on the board of Mexican food chain Chipotle.
In September, Sudheer Kuppam left Intel Capital to form Epsilon Venture Partners, according to VCCircle. Kuppam joined Intel Capital in 2000 before being promoted to managing director in 2007, overseeing investments in the Asia-Pacific region as well as the $250m Intel Capital India fund.
Also in September, Alfred Lo took the helm at AMP New Ventures, the corporate venturing unit of Australia-based financial services firm AMP. Lo was previously principal at Optus-Innov8, an Australian seed fund established by Australia-based telecoms company Optus and Singapore-based telecoms firm SingTel.
Also in September, Sean Cunningham, director of venture investments at Intel Capital, stepped down to join venture capital firm Trident Capital Cybersecurity as managing director. He is working alongside existing managing directors Alberto Yépez and Don Dixon, and will focus on early-stage cybersecurity startups.
In September, Ratan Tata, former chairman of diversified conglomerate Tata & Sons, became a senior adviser at IDG Ventures India, the corporate venturing affiliate of media company International Data Group. He will advise on business strategy and organisational leadership. Tata is also an angel investor, funding such companies as e-commerce firm Snapdeal, online payment service Paytm, smartphone producer Xiaomi and ride-hailing service Ola.
In October, Canada-based enterprise software provider OpenText hired David Harris Kolada from state-backed fund Sustainable Development Technology Canada to manage its corporate venturing investments. OpenText provides IT management software for businesses. As a vice-president, Kolada will oversee venture capital activities, including investments in funds of funds.
The same month, Kris Gopalakrishnan, co-founder of India-based IT services provider Infosys, became an adviser at IDG Ventures, the Economic Times reported. Gopalakrishnan will direct the fund on strategy and investments, and will help seek out new sectors for investment.
In January 2016, former Qualcomm Ventures head Nagraj Kashyap confirmed he had joined software provider Microsoft as corporate vice-president to build a venture group reporting to Peggy Johnson, executive vice-president behind more strategic transactions, such as its investment in Facebook in 2006.
In March 2016, Matthew Lee left IDG Ventures Korea to co-found Cognitive Investment as managing partner. Lee had been CEO and managing partner of IDG Ventures Korea since 2007, focusing on mobile and social technology developers.
Also in March, Frederic Rombaut, UK-based head of corporate development international at US-listed Cisco Systems, left to run his own investment and advisory service, FR Development. The move is the latest change at Cisco, which in October promoted Hilton Romanski, senior vice-president of corporate development who covers mergers and acquisitions as well as the company’s $2bn private equity and venture capital portfolio.
In May, Qualcomm Ventures promoted Patrick Eggen to managing director for North America. Eggen joined Qualcomm in 2005 and has been Qualcomm Ventures’ lead investor in the San Francisco Bay area, overseeing its early-stage fund, which has made more than 60 investments globally.
Also in May, Lisa Lambert, a former vice-president at Intel Capital, joined venture capital firm Westly Group as managing partner. Lambert, named the top-ranking Global Corporate Venturing Rising Star in January this year, was managing director of Intel Capital’s software and services fund as well as the $125m Intel Capital Diversity Fund.
