In today’s world, IT innovation goes beyond the sector itself, with significant spill over into virtually all other sectors of the world economy, each of which is undergoing digitisation to a different degree. Be it smart homes, smart factories, smart cities, the Internet of Things (IoT), connected vehicles, applications and software optimised with artificial intelligence (AI) and machine learning (ML), or the cloud, digitisation – and its disruptive potential – is nearly ubiquitous.
Digital technology enabled the fast switch to remote working in the first days of the covid-19 pandemic. Whether remote working will remain in such proportions in the post-pandemic world is unclear but it is clear decades of human ingenuity went into the IT that is being used to keep the world going, even in dire straits. And that is quite something!
Big data and datafication lie at the core of digitisation. The ever-smarter internet-connected devices we use tend to generate enormous streams of data. Harnessing the potential and unlocking the operationalisation of big data, in terms of extracting relevant information and insights, has been one of the major challenges.
According to “Big Data and analytics services global market report 2021: covid-19 growth and change to 2030” by ResearchAndMarkets.com, the big data analytics services market was estimated at $73bn globally in 2020 and is forecast to reach $76bn by the end of 2021 at a compound annual growth rate (CAGR) of 3.9%. The expected growth is driven by companies resuming operations and adapting to the new normal and recovering from the pandemic’s impact, according to the report. The report also expects this market to reach $117.19bn in size by 2025, at a CAGR of 11%.
The expected medium-term growth is attributed to the expansion of IoT and its massive datafication effect: “The increasing growth of integration of internet of things in daily lives is a key factor driving the growth of the big data and analytics services market. When organisations take a hold of the data for the purpose of research, IoT serves as a major source for that data and this is the point where the position of big data in IoT comes into the picture. IoT devices produce a huge amount of unstructured data, which are stored in the big data network and this data largely depends on 3V factors such as volume, velocity and variety. About 44 trillion gigabytes of data is expected to be generated by the internet of things by year 2020.”
Long gone are the days when big data tools used to be seen as just a fancy new technology. The business world has largely come to grips with the fact they are becoming mission critical for big enterprises. According to consulting firm New Vantage Partners’ ninth annual survey of senior corporate executives on the topics of big data and AI business adoption: “Today… mainstream companies have come a long way in having expanded their commitment and investments in data. This is evidenced by the percentage of firms investing in data initiatives – 99%, appointment of a Chief Data Officer – 65%, and reporting of measurable business outcomes – 96%. There is no question that big data has been absorbed into the mainstream during this decade.”
The role of AI
Handling massive data streams is unthinkable without employing the power of AI, which is the other major factor in IT innovation. In recent years, media have popularised buzzwords like “artificial intelligence”, “machine learning” and “deep learning” (DL) and they have become part of everyday business speak. 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 a machine learns how 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 the human brain.
Within AI, we have heard much talk about “natural language processing” (NLP), a branch that deals with to extracting or generating meaning and intent from texts in a natural, readable and grammatically correct form. “Computer vision”, another branch of AI, aims to extract meaning or intent from visual elements, whether characters in text documents or faces, objects and scenes from images.
Far from being a mere fad or good buzzwords for PowerPoint presentations, AI and ML are already yielding measurable results for businesses. Studies like the third edition of the State of AI report, issued by consulting and auditing firm Deloitte, found some nuances about the use and adoption of AI are beginning to change. According to the report, the use of AI may no longer viably provide the advantage it did: “Early-mover advantage may fade soon. As adoption becomes ubiquitous, AI-powered organisations may have to work harder to maintain an edge over their industry peers. An indicator of a levelling of the playing field – most adopters expect that AI will soon be integrated into more and more widely available applications.”
Why is AI used by big businesses? The short answer is simply to make things more efficient “Virtually all adopters are using AI to improve efficiency; mature adopters are also harnessing the technologies to boost differentiation. Using AI for automation and optimisation can provide significant benefits, but organisations should work to move beyond these objectives by leveraging AI to create new products and ways of working,” the report says.
It also found that most AI adopters are buyers, not developers, of the technology: “AI adopters tend to buy more than they build, and they see having the best AI technology as key to competitive advantage. As options for platforms, solutions, and vendors proliferate and improve, becoming more astute consumers of AI technologies will likely become increasingly important for companies.” This finding has wide and positive implications for the future of small emerging businesses that are developing AI.
Humans and robots
There are some controversial points around AI’s side-effects on the economy, particularly on human labour. While the planet is still comfortably a long way from a robot-dominated world, AI is bound to drastically augment human productivity in the next few decades. However, much of this process will likely come along with a Schumpeterian “creative destruction”. That implies a broad need to reskill and retrain the labour force and, naturally, feelings of fear and rejection. 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”. This is a problem yet to be tackled in the post-pandemic world.
During the pandemic we had even some reasons to be slightly more optimistic for a more peaceful transition to an AI-powered future of work. According to the 2020 Global Human Capital Trends by Deloitte, the health crisis may have given a glimpse of the way forward: “Covid-19 showed people that while technology can augment and supplement work, it does not replace what is needed from humans. The health crisis gave people a greater appreciation for the fact that humans and technology are more powerful together than either can be on their own. Consider how telemedicine, manufacturing, education and even grocery delivery drew on the power of integrated human-machine teams during the crisis.”
Despite its potential negative social impact, with the current strong tailwinds for AI, it is perfectly conceivable it will continue to create opportunities for many emerging businesses, as it has in the last five years.
Cybersecurity and the cloud
Digitisation inevitably involves significant digital threats that the cybersecurity subsector addresses. The growth of the cybersecurity market 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. Cyberthreats have also grown more sophisticated and larger, as we witnessed in the case of a hack which took down Colonial, the largest fuel pipeline in the US.
Analyst Steve Duplessie, founder of Enterprise Strategy Group once aptly described the field of cybersecurity: “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.”
Cybersecurity threats accelerated during the pandemic with the emerging of remote working. Cybersecurity threats are bound to remain and grow stronger, even if teleworking levels go down. According to “Cybersecurity Services Global Market Report 2021” by report aggregator Reportlinker.com, the global cybersecurity services market was forecast to grow from $65.41bn in 2020 up to $103.89bn by the end of 2025, at a CAGR of 11%. The report attributes the growth to “increasing instances of massive cyber-attacks” ”. The report also cites data that say ransomware threats have risen by 40% quarter-on-quarter to 199.7 million attacks worldwide in Q3 2020. “The primary motive behind cybercrimes is political competition, financial gain, negative credibility, foreign competition and radical involvement of religious groups,” said the report.
With booming data and connectivity of everything, today´s digitised world would be almost unimaginable without cloud computing and 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 2021 State of the Cloud Survey, conducted by tech asset management solution provider Flexera, found that even in a nearly post-pandemic context, “enterprises continue to embrace multi-cloud and hybrid cloud strategies and are increasing spend with vendors across the board, citing a higher-than-expected cloud usage due to the covid-19 pandemic restrictions throughout 2020”.
Respondents of the survey claimed they had registered their highest levels of spending on cloud technologies, though they lamented that “they continue to struggle to forecast spend accurately as they significantly exceed their cloud budgets”. It is no surprise that optimising existing cloud use is on the top of priority lists, along with migrating more workloads to the cloud, according to the report.
While business operations and the workforce have been migrating to the cloud, individual consumers are moving towards virtual reality (VR) and augmented reality (AR) technologies. It remains still unclear whether and to what extent the two technologies may converge or diverge as they become more marketable and adopted more widely thanks to the rollout of 5G technologies.
According to the “Augmented Reality Services Global Market Report 2021: Covid 19 growth and change to 2030” by ReportLinker, the AR market was estimated at $48.92bn in 2020 and is expected to reach $291.96bn by 2025 at a CAGR of 44%. The report cites the pandemic as having been the major driver of growth, as businesses have had to adopt AR services. This adoption is also expected to generate further growth in the post-pandemic world.
According to the “Global Virtual Reality Market Report 2021-2026” by ResearchAndMarkets, the world VR market – including both services and hardware technology, was $23.7bn in 2020 and is forecast to grow to $80.16bn by 2026.
The report cites the increased use of VR in the events business due to the pandemic as a catalyst of wider longer-term adoption and acceptance of VR technologies. However, it considers the scientific and training capabilities as “among the most vital applications of virtual reality technology”.
Chips crisis
On the hardware side of things, it is chips and semiconductors that enable sufficient computing power for everything from big data and AI to cloud computing and VR. There is currently a significant shortage of semiconductors for the automotive and other industries, largely due to supply chains disruptions by the pandemic and swings in demand. “It is not an exaggeration to say at the moment that we have a crisis in our supply chain,” stated US commerce secretary Gina Raimondo during a hearing before the Senate. This is likely to drive a concerted effort to foster domestic production, rather than just design, of such critical products in the future, not just in the United States.
According to the “Semiconductor Industry Landscape – Growth, Trends, Covid-19 Impact, and Forecasts (2021-2026)” report by ResearchAndMarkets.com, the semiconductor industry is forecast to grow at a CAGR of above 6% by the end of 2026. The major drivers will continue to be the clusters of technologies around IoT and AI:
“The advent of IoT and artificial intelligence (AI), along with the proliferation of sophisticated electronics are driving the high-end application segment across the consumer electronics and automotive industries. These dynamics have increased the rate of adoption of the latest semiconductor manufacturing, to meet the growing demand.” The report, however, notes consumer electronics and their sales growth will play major role in driving the growth of semiconductors.
The sector in charts
For the period between June 2020 and May 2021, we reported 825 venturing rounds involving corporate investors from the IT sector. A considerable number of them (372) took place in the US, while 122 were hosted in Japan and 109 in China.
On a calendar year-on-year basis, total capital raised in corporate-backed rounds went up from $35bn in 2019 to $42bn in 2020, suggesting a 20% increase. The deal count also increased by 18% from 650 deals in 2019 up to 767 tracked by the end of last year. 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 internet conglomerate Alphabet, internet company Tencent and cloud enterprises software provider Salesforce. The list of IT corporates committing capital in the largest rounds was headed by Alphabet, Tencent and cloud enterprise software provider Salesforce.
The most active corporate venture investors in the emerging IT companies were Alphabet, Salesforce and semiconductors and chip maker Intel.
Overall, corporate investments in emerging IT-focused enterprises went up from 659 rounds in 2019 to 729 by the end of 2020, suggesting an 11% increase. Estimated total dollars in those rounds went down, however, by 12% from $22.89bn in 2019 to $20.13bn in 2020. Overall, the pandemic shock did not affect much dealmaking and flow of capital into these businesses.
Deals
Corporates from the IT sector invested in large multimillion-dollar rounds, raised by enterprises from a variety of sectors – telecoms, consumer, transport, health and IT itself.
Internet technology provider Google invested $4.5bn in Jio Platforms, the digital services spinoff of diversified India-based conglomerate Reliance Industries. Google, part of Alphabet, will take a 7.7% stake in Jio and plans to collaborate with it on the development of technology including an affordable entry-level smartphone. Jio operates a mobile network and broadband service, as well as about a dozen proprietary apps offering functionality such as music, film and television streaming, cloud storage and chat. It aims to expand into online retail, digital payments, education and healthcare, building an ecosystem modelled on that of China-based Alibaba.
China-based community buying platform developer Xingsheng Youxuan secured approximately $2bn in a funding round featuring internet group Tencent and real estate developer China Evergrande Group. Sequoia Capital China led the round, which also featured FountainVest Partners, Primavera Capital Group, KKR and Temasek. It valued Xingsheng at $6bn pre-money. Xingsheng Youxuan runs an e-commerce business that allows local communities to club together to purchase items in bulk. The company processes more than 8 million daily orders and covers more than 30,000 towns across China.
US-headquartered autonomous driving technology developer Cruise raised more than $2bn from investors including software provider Microsoft and automotive manufacturers General Motors (GM) and Honda. The corporates were joined in the round by undisclosed institutional investors, and the cash was provided at a $30bn post-money valuation. Microsoft invested through a strategic partnership that will involve it combining its cloud computing and engineering capabilities, manufacturing expertise and partner ecosystem with Cruise’s to bolster the commercialisation of the latter’s technology. Cruise is working on autonomous driving software that will be used in all-electric vehicles forming the basis for shared taxi services, in addition to hardware such as sensors, robotics and telematics systems.
Telecoms and internet group SoftBank’s Vision Fund has co-led a $1.7bn funding round for Manbang Group, the China-based trucking services provider also known as Full Truck Alliance. The round was co-led with investment and financial services group Fidelity, Permira’s Growth Opportunities Fund and Sequoia Capital China. It included Tencent, Hillhouse Capital, GGV Capital, Lightspeed China Partners and YF Capital and valued the company at almost $12bn.
Manbang operates an app-based service that uses artificial intelligence to match drivers with space in their trucks to customers who require cargo to be transported, taking a cut of the fee and plotting out optimal routes for drivers.
US-based data analytics software developer Databricks secured $1bn in a series G round featuring software provider Microsoft. E-commerce group Amazon, Alphabet and Salesforce participated through Amazon Web Services, CapitalG and Salesforce Ventures respectively, and the round valued Databricks at $28bn. It was led by investment firm Franklin Templeton and included investment and financial services group Fidelity, Canada Pension Plan Investment Board, Whale Rock, Andreessen Horowitz, Alkeon Capital Management and funds and accounts managed by BlackRock.
Databricks has created a data management platform that can handle all structured, semi-structured and unstructured data for enterprise-scale analytics. The technology is based on Apache Spark, the open-source analytics software developed at University of California, Berkeley, by some of Databricks’ co-founders, including chief executive Ali Ghodsi, who continues to be an adjunct professor at the university.
Resilience, a US-based developer of medical manufacturing technology, emerged from stealth with over $800m in funding from investors including GV. The Google unit participated in a recently closed $750m series B round co-led by Arch Venture Partners and 8VC and backed by fellow venture capital firm New Enterprise Associates and unnamed pharmaceutical companies, public mutual funds, foundations, family offices and pension funds.
Founded in 2020 and also known as National Resilience, Resilience is developing technologically advanced pharmaceutical manufacturing facilities that will help therapeutics developers concentrate more capital on drug discovery activities. The technology is intended to allow gene and cell therapies, vaccines, proteins and viral vectors to be produced quickly and safely at scale.
US-based stem cell medicine developer Sana Biotechnology closed its inaugural funding round, having raised more than $700m from investors including GV. The round also featured F-Prime Capital, a fund owned by investment and financial services group Fidelity, as well as Canada Pension Plan Investment Board, Alaska Permanent Fund and the Public Sector Pension Investment Board.
Sana is working on technology intended to repair and control genes in cells and replace missing or damaged cells to tackle the underlying causes of serious diseases, ranging from cancer and central nervous system conditions to heart disease and various genetic disorders. The funding has been allocated to advancing the startup’s core platforms, including those focusing on gene delivery, immunology, stem cell biology and gene modification and control.
Verily, a US-headquartered developer of data-focused life sciences technology, received $700m in funding from investors including its parent company Alphabet. The company said the funding was provided by its current investors and named private equity firm Silver Lake, Singaporean state-owned investment firm Temasek and pension fund manager Ontario Teachers’ Pension Plan alongside Alphabet.
Launched in 2015 after being incubated within Alphabet’s Google X division, Verily is working on hardware and software products in partnership with other companies to utilise data in drug development and disease management. The cash will go to commercialising Verily’s product range.
SoftBank’s Vision Fund 2 led a $676m series D round for US-headquartered AI software developer SambaNova Systems. The round included Intel Capital and GV, corporate venturing subsidiaries for semiconductor and data technology provider Intel and Alphabet respectively, and it valued the company at $5.1bn.
Singaporean state-owned entities Temasek and GIC filled out the round with Walden International, WRVI and funds and accounts managed by BlackRock. SambaNova is developing systems to run advanced AI applications that are intended to be more powerful that existing central or graphics processing units, for use across data centres, the cloud and edge computing.
US-based cloud security software provider Lacework completed a $525m funding round featuring Liberty Global Ventures and Snowflake Ventures, representing mass media group Liberty Global and data management technology producer Snowflake respectively. Private equity firm Sutter Hill Ventures and technology investment firm Altimeter Capital co-led the round, which included D1 Capital Partners, Coatue, Dragoneer Investment Group and Tiger Global Management.
Lacework has built a cybersecurity platform designed for use with a range of cloud service providers, detecting behavioural anomalies and run-time threats in addition to ensuring cloud compliance. The company said it increased revenue by more than 300% during 2020.
There were other interesting deals in emerging IT-focused businesses that received financial backing from corporate investors from the same and other sectors.
Netherlands-headquartered customer service software provider Messagebird added $800m to a series C round featuring media group Bonnier, expanding it to $1bn. Bonnier joined Eurazeo, Tiger Global Management, BlackRock, Owl Rock, Glynn Capital, LGT Lightstone, Longbow, Mousse Partners, NewView Capital, Accel, Atomico and Y Combinator in the extension, which was made up of 70% equity financing and 30% debt.
Messagebird offers a range of customer service tools across a variety of channels including email, phone, WhatsApp, text messaging and push notifications. It had raised a total of $100m from investors including Y Combinator, Accel and Atomico prior to this round. The company revealed it had channelled $600m of the extension into acquiring SparkPost, the US-based creator of an email optimisation software platform it claims oversees some 4.5 trillion emails a year on behalf of its customers.
UiPath, the US-based robotic process automation (RPA) software producer backed by Tencent and Alphabet, raised $750m in series F funding at a $35bn post-money valuation. Hedge fund Alkeon Capital Management and investment management firm Coatue co-led the round, which also featured Altimeter Capital, Dragoneer, IVP, Sequoia Capital, Tiger Global Management and funds and accounts advised by T Rowe Price.
Founded in 2005, UiPath provides RPA technology that leverages AI to help businesses automate repetitive tasks and increase efficiency.
4Paradigm, a China-based AI technology provider backed by corporates China Three Gorges, Cisco and Lenovo, closed a $700m series D round. Primavera Capital, Boyu Capital and Hopu Investments co-led the round, which also attracted Goldman Sachs, among other investors.
Founded in 2014, 4Paradigm is working on an enterprise-grade AI platform and applications to support digital business transformation and increase efficiency in sectors such as finance, retail, manufacturing, energy, healthcare and logistics. The series D capital will allow 4Paradigm to accelerate its ambition to build an ecosystem around its offering.
SoftBank’s Vision Fund 2 co-led a $640m series E round for Singapore-headquartered intelligent retail technology provider Trax with investment management firm BlackRock. The round included Sony Innovation Fund by IGV2, a CVC vehicle for consumer electronics producer Sony, in addition to pension fund manager Omers, and it reportedly valued the company at $2bn.
Trax provides computer vision and AI-equipped technology that tracks in-store conditions and stock levels to help grocery retailers and consumer packaged goods (CPG) producers make more effective decisions in real time.
Vision Fund 2 also led a $210m second tranche for US-based security and governance software provider OneTrust that took its series C round to $510m. Asset manager Franklin Templeton also took part in the second close, which followed a $300m tranche featuring TCV and existing investors including
Insight Partners and Coatue in December 2020.
The final close came at a $5.3bn post-money valuation. OneTrust’s software uses AI and RPA technology to enable companies to operationalise security, privacy, data governance, ethics and compliance activities to ensure they meet all their regulatory requirements.
Insurance firm Sompo Holdings agreed to invest ¥54bn ($500m) in Palantir, a US-based data analysis services provider. The deal came after Sompo and Palantir launched a Japanese joint venture in November 2019, and the companies said in a statement that Palantir Japan’s duties have included work combating Covid-19. Palantir has built big data analysis software that uses AI to sift through massive amounts of structured and unstructured data in order to find informative patterns. Its customers include US law enforcement agencies as well as businesses such as Sompo.
Apex Microelectronics (Apexmic), a semiconductor subsidiary of printing and imaging product maker Ninestar Corporation, secured RMB3.2bn ($489m) from investors including home appliance manufacturer Gree Electric Appliance. It invested through its Zhuhai Gree Financial Investment Management unit, joining 11 others including China Integrated Circuit Industry Investment Fund II, which led the round, Goldstone Investment and Hengqin Financial Investment.
Formed in 2004 in the city of Zhuhai, Apexmic produces microcontrollers, chips for smart printers and internet-of-things systems, and secure system-on-chip technology for network communication. The company provides its technology for customers in industries including defence, aerospace, healthcare, semiconductor, cybersecurity and connected IT. It recently launched a chip that will be used in the cartridges of Epson’s EW-M530F printers.
Exits
Corporate venturers from the IT sector completed 142 exits between June 2020 and May 2021 – 86 acquisitions, 39 initial public offerings (IPOs), two mergers and 15 other transactions.
As for year-on-year, the transaction volume went up from 99 to 110 between 2019 and 2020, while the estimated dollar value increased by 22% from $31.77bn up to $46.21bn.
US-based medical diagnostics technology Grail agreed to an $8bn acquisition by genomics technology producer Illumina, which had originally spun out the former. Grail will receive $3.5bn in cash and another $4.5bn in stock. Former backers of Grail include GV, a subsidiary of Alphabet, among many other corporates, such as pharmaceutical firms Johnson & Johnson, Bristol-Myers Squibb, Celgene, Merck & Co and WuXi AppTec as well as Tencent and e-commerce firm Amazon. Spun out in 2015, Grail is working on technology that combines gene sequencing with population-level clinical studies to detect cancer at an earlier stage, increasing a patient’s odds of survival.
Identity authentication technology provider Okta agreed to purchase US-based identity verification platform developer Auth0 in a $6.5bn deal enabling telecoms firm NTT Docomo, Telstra and Deutsche Telekom as well as Salesforce to exit. The acquisition is an all-share deal. Salesforce Ventures led a $120m series F round in July 2020 valuing Auth0 at $1.92bn that included DTCP and Telstra Ventures, which represented telecommunications firms Deutsche Telekom and Telstra.
Auth0’s software platform enables app development teams to secure and authorise access for users, mobile devices and other applications.
China-based video streaming platform developer Kuaishou Technology raised $5.4bn in an IPO on the Hong Kong Stock Exchange that scored exits for Tencent and Baidu. The company issued about 365 million shares priced at HK$115 ($14.83) each. Its shares leapt to HK$338m at the start of trading and closed at HK$300 on the first day of trading, giving it a market cap of roughly $160bn.
Investment and financial services group Fidelity bought $270m of shares in the IPO while Capital Group purchased $500m, Invesco $270m and Morgan Stanley Investment Management $125m according to Nikkei, which also named GIC, Abu Dhabi Investment Authority, Canada Pension Plan Investment Board and Boyu Capital as buyeers. Kuaishou has built a short-form social video app with more than 300 million daily active users. Its chief rival, Douyin, is better known internationally as TikTok.
US-headquartered short-term accommodation marketplace Airbnb went public in a $3.49bn IPO on the Nasdaq Global Select Market, giving an exit to Alphabet. The company issued 50 million class A shares priced at $68.00 each, significantly above the offering’s $56 to $60 range, while its shareholders divested just over 1.32 million shares at the same price. The price valued Airbnb at roughly $47bn.
Airbnb runs an online platform that enables users to list properties and rooms for short or long-term rental by others, and although its business has been impacted sharply by social distancing measures amid the covid-19 pandemic, 5.6 million of its 7.4 million listings were active as of the end of September 2020.
US-based data analysis software provider Snowflake went public in an IPO on the New York Stock Exchange, which came along with a $250m investment by enterprise software producer and existing investor Salesforce. Snowflake issued 28 million shares at $120 each, above the $100 to $110 range it had set, after having lifted it from an initial $75 to $85 a share.
Salesforce subsidiary Salesforce Ventures and investment holding company Berkshire Hathaway, headed by renowned investor Warren Buffett, provided $250m each to Snowflake via a concurrent private placement. On the first day of trading, the stock price surged above $300, giving day traders and high-frequency trading algorithms a 150% gain.
Founded in 2012, Snowflake has developed a cloud software platform which enables users to unify large amounts of data that are siloed in different places, combine them with new data and analyse them. The company boasts over 3,100 customers and has more than doubled its revenues to $242m in the first half of 2020 with a net loss of $171m.
Enterprise communication software producer Twilio agreed to acquire US-based customer data platform developer Segment for $3.2bn in shares, enabling Alphabet’s GV subsidiary to exit. Twilio is to pay for the deal entirely through common stock, while the valuation was more than double that at which Segment last raised money, in a $175m series D round co-led by GV in April 2019.
Founded in 2012, Segment has built a software platform that allows users to standardise and unify the collection and management of customer data so it can be efficiently channelled into other parts of the company.
Tencent invested $800m to lead a series D round for China-based real estate brokerage Ke.com sized at almost $1.2bn that included $50m from property developer Country Garden. Private equity fund manager Gaw Capital Partners supplied $100m for the round while VC firm Gaochun Capital invested $80m, Source Code Capital $52m, New Horizon $30m, China Renaissance unit Huaxing Capital $20m and Strait Capital $5m. The round was filled out by undisclosed additional investors who put up a total of $113m, and it valued Ke.com
at $9.5bn.
Ke.com runs an online platform where users can buy new, secondhand and rental properties in some 500 cities across China and use VR technology to help users inspect properties. It was spun off by online real estate portal Lianjia in 2018. The cash will support an ongoing expansion in Ke.com’s research and development and marketing costs in addition to increased management investment.
Joby Aviation, a US-based air taxi developer backed by corporates Intel, JetBlue, Toyota and Uber, agreed a reverse merger with special purpose acquisition company Reinvent Technology Partners. Baupost Group, funds and accounts managed by BlackRock, Fidelity and Baillie Gifford have anchored a $835m private investment in public equity, while Uber will convert $75m of bonds into equity.
Combined with $690m held in trust by Reinvent, Joby Aviation will receive $1.6bn in gross proceeds and the combined business is expected to fetch a $6.6bn post-money valuation. Founded in 2009, Joby is developing vertical take-off and landing aircraft to take passengers to their destinations.
The company has conducted more than 1,000 test flights and intends to launch its service in 2024. Proceeds will allow Joby to begin its commercial flights by getting regulatory approvals and opening manufacturing sites.
UiPath, the RPA software producer that counts Alphabet and Tencent as investors, closed its IPO at almost $1.54bn. The company issued 9.4 million shares, priced at $56 each, above the $52 to $54 range for the offering, while investors including Alphabet unit CapitalG sold nearly 14.5 million more shares. The extra shares bumped the number issued by UiPath to 13 million and the move came after UiPath’s shares rose significantly post-IPO.
UiPath enables enterprises to automate repetitive back-office tasks. It made nearly $608m in revenue in 2020 and a $92.4m net loss. The company had raised a total of approximately $2.05bn prior to the offering.
Xpeng, the China-based electric vehicle (EV) manufacturer backed by corporates Alibaba, UCar, Xiaomi, Duowan and Foxconn, went public in an IPO sized at approximately $1.5bn.
It consisted of 99.7 million American Depositary Shares (ADSs), each equating to two common shares, issued on the New York Stock Exchange priced at $15 each. The company had originally planned to issue 85 million ADSs priced between $11 and $13 each. The IPO price will give it a market capitalisation of about $21.3bn.
Xpeng produces smart EVs that utilise its proprietary autonomous driving technology and in-car operating system. It has released a sports utility vehicle and sports sedan model.
Global Corporate Venturing also reported several exits of emerging IT-related enterprises that involved corporate investors from the same as well as other sectors.
IronSource, the Israel-based app monetisation software provider backed by conglomerate Access Industries, agreed a reverse merger with a SPAC at an $11.1bn pro forma equity valuation. The company joined forces with Thoma Bravo Advantage, which is sponsored by private equity firm Thoma Bravo, and will obtain the listing on the New York Stock Exchange it received in a $900m IPO.
A Thoma Bravo affiliate led a $1.3bn private investment in public equity deal supporting the transaction, investing with Morgan Stanley’s Counterpoint Global unit, Tiger Global Management, Nuveen, Hedosophia, Wellington Management, Baupost Group and funds managed by investors including Fidelity Investments Canada.
IronSource provides software tools that help app developers, particularly mobile game developers, monetise their products and engage more effectively with their users, by adding specific touchpoints where relevant content can be delivered.
Marketing and imaging software producer Adobe agreed to acquire US-based work management software provider Workfront in a $1.5bn deal, giving quantitative trading firm Susquehanna International Group an exit. Founded in 2001 as AtTask, Workfront has built a software platform that allows enterprises to focus workplace activity and collaboration in a single place, allowing marketing employees to create content, automate processes, measure resources and outcomes, manage collaborations, share ideas and complex projects.
The company claims to have a customer base of 3,000 companies and about 1 million users. Clients include mass media group Comcast, networking equipment supplier Cisco, telecoms firm BT, financial services provider TSB and guitar manufacturer Fender.
Mobile semiconductor manufacturer Qualcomm agreed to purchase US-based silicon computing technology developer Nuvia in a $1.4bn deal that will allow computing technology provider Dell to exit.
The acquisition is being conducted by the corporate’s Qualcomm Technologies subsidiary, and Nuvia’s technology is expected to enhance its mobile graphics processing unit, digital signal processor, multimedia accelerator and artificial intelligence engine products.
Nuvia is developing silicon power management systems, performance processors and systems on a chip for use in compute-intensive devices, particularly those in data centres which require large amounts of energy to operate.
Tuya, a China-based IoT technology provider backed by Tencent, priced its IPO to raise $915m. The company priced approximately 43.6 million shares at $21 each, above the IPO’s $17 to $20 range, and floated on the New York Stock Exchange. Tencent had expressed interest in acquiring $100m of shares in the offering, a portion of a prospective $500m of share purchases by existing Tuya shareholders.
Tuya provides an IoT platform that enables users such as original equipment manufacturers and systems integrators to create and produce their own smart products. It increased revenue 70% in 2020 to almost $180m and cut its net loss from $70.5m to $66.9m.
Edge computing platform provider Fastly agreed to purchase US-based web cybersecurity technology developer Signal Sciences in a $775m cash-and-stock transaction that will allow media company O’Reilly to exit. The deal was made up of $200m in cash and $575m in shares of Fastly, which has a current market capitalisation of roughly $9.7bn. The company had raised approximately $62m since being founded in 2014.
Signal Sciences is the creator of a programmable cybersecurity product designed to protect web applications. Its technology is used on more than 40,000 applications and its customers include Twilio, SendGrid and DoorDash.
The company’s technology will enhance Secure@Edge, a product Fastly intends to launch that will help businesses securely pursue digital transformation.
Funds
For the period between June 2020 and May 2021, corporate venturers and corporate-backed VC firms investing in the IT sector secured $21.8bn in capital via 81 funding initiatives, which included 44 VC funds, 27 new or refunded venturing units, six accelerators, two incubators and two other initiatives.
On a calendar year-to-year basis, the number of funding initiatives in the IT sector went down by 13% from 72 in 2019 to 63 registered by the end of last year. Total estimated capital, however, went up from $16.07bn in 2019 up to $20.17bn in 2020, a 25% increase.
Alphabet intends to invest $10bn in India over the next five to seven years through a Google for India Digitization Fund. The capital will be deployed through equity investments in India-based companies and in partnerships and investment in operations, infrastructure and the technology ecosystem. Alphabet intends to target digital technologies that can be beneficial for India in particular, including AI products in areas like education, health and agriculture as well as language diversification and companies looking to boost their own digitisation.
US-based e-commerce, cloud computing and consumer device group Amazon launched a $2bn investment fund that will back developers of products that can support carbon reductions. The Climate Pledge Fund is targeting transportation, logistics, manufacturing, materials, food and agriculture technology developers as well as those engaged with clean power production and storage and those involved with the circular economy.
China-based consumer electronics manufacturer Konka Group formed a RMB10bn ($1.45bn) industry fund in partnership with the municipal government of the Chinese city of Yancheng. Konka is providing 40% of the capital for the fund, preliminarily dubbed Konka Yancheng Electronic Information Industry Investment Fund, while Yancheng is putting up 59.9%. The other 0.1% will come from an unspecified limited partner (LP). The fund will debut with a RMB3bn and will target investments in semiconductor, AI and internet-of-things technology as well as advanced machinery and materials. Founded in 1980, Konka produces televisions, audio equipment, tablets, power banks and home appliances in addition to LCD-based signs and screens.
B Capital Group, the US-based VC firm affiliated with consulting firm Boston Consulting Group (BCG), closed its second fund at $820m.
Founded in 2014, B Capital targets growth-stage deals and pursues a portfolio management strategy that involves connecting its companies to corporates which can help them scale, through a network provided by BCG.
The firm invests between $10m and $60m per round, at series B to D. its areas of interest include enterprise software, financial, healthcare, consumer, transportation and logistics technology.
Legend Capital, the VC firm spun off by China-based conglomerate Legend Holdings, closed its latest fund, LC Fund VIII, at $500m. The LPs included undisclosed existing LPs as well as corporate investment funds, sovereign wealth funds, family offices and private pension funds. Founded in 2001, Legend Capital oversees about $8bn of assets under management (AUM)..It focuses on growth-stage deals in areas such as enterprise software, consumer internet, advanced manufacturing, healthcare and deep technology.
China-based VC firm Qiming Venture Partners raised RMB 2.9bn ($441m) for the final close of its RMB Fund VI, with money from state-backed conglomerate Xiamen C&D.
Existing LPs also made capital commitments to the vehicle, including China-based insurance companies, fund of funds manager Oriza FOFs Investment Management and science and technology-focused fund of funds. Founded in 2006, Qiming manages nine US dollar and six renminbi-denominated funds, and has $5.9bn of assets under management. It has investments in more than 380 companies, 40 of which have achieved a valuation of more than $1bn. The firm targets early and growth-stage companies in the technology, telecommunications, media and healthcare sectors.
China-headquartered internet-of-things (IoT) technology producer Tuya formed a $400m strategic investment fund with hedge fund manager Hillhouse Capital. Tuya is the creator of an IoT technology platform which enables businesses to access hardware development tools, cloud services and smart business development software to build their connected services. Liu Yao, chief financial officer of Tuya, was quoted by DealStreetAsia as saying the company plans to “help IoT enterprises and developers speed up their product development and adopt intelligent business models, while building an open, fully-neutral, third-party platform for IoT developers”.
Line Ventures and YJ Capital, the respective corporate venturing subsidiaries of messaging platform developer Line and internet company Yahoo Japan, merged with ¥30bn ($271m) of capital. Japan-headquartered Yahoo Japan and Line, the messaging platform formed by South Korea-headquartered internet group Naver, closed their merger and will operate under Z Holdings, a publicly-listed holding company backed by Naver and telecoms firm SoftBank.
The new CVC capital vehicle, Z Venture Capital, will invest in developers of technology related to Z Holdings’ group businesses, such as consumer services, e-commerce, healthcare, cybersecurity, financial technology and enterprise software. Z Venture Capital will target portfolio companies in Japan and South Korea as well as in the United States, China and Southeast Asia. It also intends to help US-based developers of edge technologies like AI, robotics and blockchain to expand in East Asia.
US-based printing technology producer Xerox has announced details of its plans to launch innovation and corporate development divisions through a reorganisation involving the formation of a $250m corporate venturing arm.
Xerox’s corporate development group will engage in investments and merger and acquisition deals and deploy the $250m fund. The unit will invest in mid-sized, growth-stage companies aligned with Xerox’s strategic interests. It will be led by executive vice-president Louie Pastor, who has also been appointed chief corporate development officer and chief legal officer. The company first set up a dedicated corporate venturing subsidiary called Xerox Technology Ventures in 1988 with $30m in capital, but later closed the unit.
Xerox also appointed Naresh Shanker, senior vice-president and chief technology officer, to lead its Parc Innovation division, essentially an expansion of the Palo Alto Research Center (Parc) centre it opened in 1970 that will include scientists and engineers from several US and Canadian facilities.
Universities
Over the past few years, we reported various commitments to university spinouts in the IT sector through our sister publication, Global University Venturing. By the end of 2020, there were 184 rounds raised by university spinouts, up 13% from the 163 registered in the previous year. The level of estimated total capital deployed last year stood at $3.02bn, up 20% from $2.53bn in 2019.
Graphcore, the US-based intelligent processor producer with links to University of Bristol, raised $222m in series E funding at a $2.77bn post-money valuation. The round was led by Ontario Teachers’ Pension Plan Board and also featured funds managed by investment and financial services group Fidelity and asset manager Schroders, in addition to existing backers including Baillie Gifford and Draper Esprit.
Spun off by semiconductor technology producer Xmos –itself a spinout of University of Bristol – in 2016, Graphcore has developed a microprocessor called the Intelligence Processing Unit which is designed for use with next-generation artificial intelligence workloads. It said it has now secured $710m in funding to date.
Beyond Limits, a US-based AI technology developer based on California Institute of Technology research, attracted $133m in series B financing. The round was co-led by cloud computing firm Group 42 and petroleum company BP’s corporate venturing arm BP Ventures. The company has received an initial $113m, with the remaining $20m committed. Beyond Limits has developed cognitive AI technology that combines human-like reasoning with data to solve challenges and offer insights into improving operating conditions and enhancing business performance. The technology is based on research at Caltech and its federally-funded, Nasa-aligned Jet Propulsion Laboratory.
Menlo Security, a US-based cloud security software provider based on research at University of California, Berkeley, secured $100m in series E funding led by Vista Equity Partners. The round, which valued Menlo at $800m, also included investment banking firm JPMorgan, General Catalyst, Neuberger Berman funds and undisclosed existing backers. Founded in 2013, Menlo provides cybersecurity technology that helps protect enterprise customers from malware across the web, email and documents by isolating content. The series E proceeds will support the expansion of its engineering and go-to-market activities.
People
We reported various people moves within major corporate venture investors in the IT sector over the past year.
South Korea-listed conglomerate Samsung shook up its two US-based corporate venturing units. Young Sohn retired as president and chief strategy officer (CSO) of Samsung Electronics, Sean Kae came in as acting head of Samsung Strategy and Innovation Center (SSIC) and David Lee joined as head of Samsung Next.
Sohn but will continue as chairman of Harman, the autonomous driving subsidiary acquired by the company for $8bn, as well as a strategic adviser to its largest division, Samsung Electronics.
Kae, now executive vice-president of strategy and corporate development, joined SSIC in 2019 to help Sohn “define and expand the organisation’s mission and focus areas for new innovation and investment”. SSIC runs corporate venturing unit Samsung Catalyst, reporting to the company’s device solutions division.
Lee co-founded venture capital firm Refactor Capital in 2016 with former Andreessen Horowitz investor Zal Bilimoria, who is now looking to raise $50m for Refactor’s third fund, according to a regulatory filing. Lee had previously been a managing partner at Ron Conway’s VC firm, SV Angel.
Luc Julia, Samsung’s chief technology officer and senior vice-president of innovation, reportedly left and his team was disbanded, according to Silicon Valley Business Journal.
David ‘Dede’ Goldschmidt was appointed head of Samsung Catalyst Fund (SCF) to lead the unit’s global activities. Goldschmidt has been in the VC ecosystem for two decades. SCF hired him in 2015 as an Israel-based managing director to oversee investments in the country and in Europe, covering areas including 5G, artificial intelligence, automotive, cloud, healthcare, quantum and robotics technologies. Managing directors Christopher Chu, Scott Levine and Nicolas Autret – selected as Global Corporate Venturing’s Rising Stars in 2019 and 2018, and an Emerging Leader in 2021 respectively – will form part of SCF’s leadership team alongside Goldschmidt. GCV Powerlist 2020 members Shankar Chandran and Francis Ho departed their SCF co-head roles after more than eight years at the unit.
SoftBank Investment Advisers (SBIA), which manages Japan-headquartered telecoms and internet group SoftBank’s Vision Funds, hired Nagraj Kashyap as managing partner. Kashyap was head of US-based software producer Microsoft’s corporate venturing unit, M12. A serial GCV Powerlist award winner, he had joined Microsoft in 2016 having previously headed Qualcomm Ventures, the corporate venturing arm of mobile chipmaker Qualcomm. Kashyap was also serving a four-year term as board member of the US trade body National Venture Capital Association.
A number of SBIA team members left the firm. Ruwan Weerasekera left his chief operating officer (COO) role. He was also a managing partner for Vision Fund I and II and had joined SBIA in late 2017 after more than two decades at investment banking group UBS in several senior roles. Neil Hadley, SBIA chief executive Rajeev Misra’s chief of staff, assumed the COO position along with his existing responsibilities.
Penny Anne Bodle, a partner and global head of investor relations, has also left SBIA. Operating partner Avi Golan moved to facial technology producer AnyVision as its chief executive. Chief risk officer Maria Khan joined Eight Roads, a VC arm of investment and financial services group Fidelity, as head of risk and compliance. Private equity firm Gores Group brought SBIA partners Ted Fike and Justin Wilson on board as senior managing directors. Both currently focus on SPACs.
Managing directors Rajeev Misra and Marcelo Claure left their positions on SoftBank’s board of directors. Misra, head of the company’s Vision Fund, and Claure, the COO officer of SoftBank who also oversaw its $5bn Latin America fund, were joined by SoftBank CSO Katsunori Sago and Yasir Al-Rumayyan, a representative of Saudi Arabia’s Public Investment Fund. SoftBank announced their departures on the same day as financial results indicating that it had increased net income to about $18bn for the six months to the end of September 2020, while the paper value of its Vision Fund investments had also risen significantly. The moves were intended to increase the proportion of external directors on the board and followed the appointment of independent directors Lip-Bu Tan and Yuko Kawamoto.
Sago had joined SoftBank in 2018 after three years as chief investment officer of Japan Post Bank, a subsidiary of postal service Japan Post. He had previously been an investment banker at Goldman Sachs in Japan. Sago “played a crucial part in expanding [SoftBank Group’s] potential as an investment company,’ founder Masayoshi Son said in a statement. The Financial Times commented that Sago’s exit marks the second time a high-profile executive has quit after being recruited as potential heir to Son, following the 2016 departure of former Google executive Nikesh Arora. The move came after the former, who is 63, recently said that he plans to stay as the leader of the group beyond the age of 70.
Colin Fan left his managing partner role at SBIA. Fan had joined SBIA in 2017 after almost two decades at financial services firm Deutsche Bank in various executive roles. He managed financial technology deals on behalf of the Vision Funds, overseeing deals for portfolio companies including Fair, Flexport, Greensill, Cheduoduo (Guazi) and Zume. Fan took up an adviser position at SBIA while his duties were assumed by Munish Varma, a UK-based SBIA managing partner who relocated to the United States.
Jeffrey Housenbold, managing partner at SoftBank’s Vision Fund, stepped down in July 2021. Housenbold, a former GCV Rising Star award winner, joined SoftBank almost four years ago after it raised nearly $100bn for its first Vision Fund. His deals for the fund include DoorDash, OpenDoor, Compass, Rappi, Memphis Meats, Ordermark, Alto Pharmacy, Plenty, Whoop, Globality, Clutter, Get Your Guide, Katerra, Brandless, Wag, Heed and InMobi, according to his LinkedIn profile.
SoftBank has assigned two former managing partners at its Vision Fund, Akshay Naheta and Kentaro Matsui, to senior roles. Naheta took a senior vice-president position to mitigate the vehicle’s investment losses, offering strategic assistance to the management team. Based in the United Arab Emirates, he had been leveraging his connections with Abu Dhabi sovereign wealth fund Mubadala Investment to help raise the second Vision Fund. SBIA hired Naheta in 2017 after a stint at Knight Assets & Co, the UK-based investment firm he founded in 2011. He had been head of principal strategies at financial services firm Deutsche Bank.
Matsui assumed a senior advisory post to enhance Vision Fund’s investment strategy, having concentrated on Asia-based financial, healthcare and logistics technology deals from SBIA’s Tokyo office. China-based Didi Chuxing, Manbang Group and Ping An Healthcare Management formed part of his portfolio. Matsui came from brokerage Mizuho Securities where he advised SoftBank’s acquisitions of semiconductor manufacturer Arm and telecoms operators Vodafone Japan and Sprint.
Daisy Cai, former partner at SoftBank’s Vision Fund, joined VC firm B Capital Group to open its China office. In April 2020, Cai accepted a partner position at the Vision Fund. Cai had previously been a founding partner at Gaocheng Capital, a growth-stage private equity firm backed by hedge fund manager Hillhouse Capital, and also had been a managing partner for China-based internet group Baidu, working on both early-stage fund Baidu Ventures and late-stage vehicle Baidu Capital, having joined the company in 2016.
GV, the early-stage investment subsidiary of Alphabet formerly known as Google Ventures, promoted Terri Burns to investing partner. Burns joined GV as a principal in October 2017 after spending 14 months as an associate product manager at social media company Twitter where she concentrated on improving user experience. Having begun her career as a developer evangelist and front-end engineer at Venmo, digital payment processor PayPal’s mobile payment subsidiary, in 2015, Burns went on to serve as an adviser at coding school Codecademy the year after.
GV also laid off seven members of its investor operations team. The unit’s investor operations activities focus on adding value for portfolio companies through expertise in areas outside capital, such as research, design or human resources. The cuts equated to 8% of GV’s overall staff. David Krane, GV’s chief executive, told Axios: “In this rapidly changing market, we are constantly evolving GV’s operational services to best meet our portfolio’s needs. Reinvesting in how we work with founders at scale is essential as we continue into the next decade.” The decision did not seem to be a reflection of GV’s investment rate.
GV hired Daniel Lynch as an executive venture partner and appointed Mojca Skoberne as entrepreneur-in-residence. Lynch is chairman of five biopharmaceutical companies: Xilio Therapeutics, SpringWorks Therapeutics, Blueprint Medicines, Translate Bio and BlueBirdBio, and has held similar positions at Surface Oncology, Bind Therapeutics and Nimbus Discovery. Skoberne was a senior vice-president for gene therapy developer Repertoire Immune Medicines, where she offered her expertise in immunology, cancer and infectious diseases. Her role will involve her mentoring entrepreneurs building immunotherapy-themed companies.
Blake Byers stepped down as a general partner at GV to launch his own firm. Byers Capital will invest evenly between technology and biotech companies at series A and B stage, and opportunistically in growth equity deals. GV hired Byers in 2010 and he mainly invested in life-science and technology developers such as brain chip technology developer Neuralink, drug developer Denali Therapeutics and cancer diagnostics technology producer Grail. Before joining GV, Byers founded two companies and led research projects on biomedical engineering and stem cell biology at Stanford University.
Wendell Brooks, senior vice-president at US-listed chipmaker and data technology provider Intel and president of its corporate venturing unit, Intel Capital, resigned after six years of heading the unit. Anthony Lin, who had been leading M&A and international investing for Intel, assumed leadership of the unit on an interim basis. He was already part of the unit’s equity investing committee. At the time, Intel postponed its rollout of next-generation chips and organisational changes were expected to occur.
Anthony Lin was eventually confirmed as the new head of Intel Capital. Lin, a GCV Powerlist award winner, joined Intel’s merger and acquisitions team in 2008 and stepped up to run Intel Capital on an interim basis after the departure of Wendell Brooks. As set out in his keynote at the GCVI Summit in 2019, Lin has focused Intel Capital’s investments on leading more rounds in more diverse companies. In 2020 , Intel Capital committed $735m in 35 new deals and 45 follow-on deals. It was the lead investor in 66% of new venture deals and about a quarter of its new venture investments were in diverse entrepreneurs with 15% of all venture dollars committed to companies led by black entrepreneurs.
Philip Kirk left networking technology producer Cisco to lead strategy, venture investments and acquisitions at US-based enterprise software provider ServiceNow as vice-president of corporate development. The move came after 13 years in the same role at Cisco, covering cloud, big data, analytics, infrastructure software and data centres. He was a board observer at two of its portfolio companies, Moogsoft and Puppet Labs. Kirk’s earlier deals had included investments in Platfora, which was acquired by Workday in 2016, and Piston Cloud Computing.
YJ Capital, internet company Yahoo Japan’s corporate venturing arm, promoted Hogil Doh from partner to COO. YJ Capital, which is now under Z Venture Capital, hired Doh in February 2020 after almost a decade at e-commerce firm Rakuten, having most recently been a partner at its corporate venturing vehicle, Rakuten Ventures, from 2015, helping manage the $85m Japan Fund it had launched in 2016. Doh’s deals at Rakuten Ventures included ride hailing service Gojek, digital marketing platform From Scratch, office food delivery service Okan and MakeLeaps, the digital invoicing platform developer purchased by stationery products supplier Ricoh in late 2018.
M12, the CVC subsidiary of US-headquartered software provider Microsoft, announced it has opened an office in Bengaluru, India, adding to locations in the US, UK and Israel. Abhi Kumar, who will lead M12’s India office, said: “Typically, we see the greatest hurdles in a startup’s journey as they scale from local success to global challengers, and then again when they go on to become category leaders.” Formed in 2016 as Microsoft Ventures, M12 generally invests from series A to C stage in disruptive enterprise software developers in areas like applied artificial intelligence, business applications, infrastructure and cybersecurity.
Irad Dor joined M12 as an Israel-based partner. Dor had been a venture partner at Eight Roads, a VC arm of US-based mutual fund manager Fidelity, since 2018 and led investments in FireBlocks, Gloat and ScyllaDB. Mony Hassid, head of M12 in Europe and Israel, said Dor will focus on early-stage investments in cloud infrastructure, cybersecurity and enterprise software. Prior to joining Eight Roads, he had been a director at telecommunications firm SingTel and its corporate venturing subsidiary, Innov8.
Steve Mitzenmacher became senior vice-president for corporate development, venture investments and strategic partnerships at US-headquartered cloud computing services provider Rackspace Technology. Mitzenmacher was at NetApp, a Nasdaq-listed storage and data management technology provider, for nine years as vice-president of corporate development and strategy; his investments including Memverge, Portworx, Pensando, SnapLogic, Egnyte and Datos IO, the data management software provider acquired by Rubrik. Between 2009 and 2011, Mitzenmacher spent two years at internet company Yahoo where he spun out its Hadoop Engineering team into a startup funded by VC firm Benchmark before its eventual listing and then acquisition by Cloudera.
Ilya Gelfenbeyn, head of Google Assistant Investments, a corporate venturing unit for Alphabet focused on voice-activated assistants, left to set up VC firm The.AI Ventures. Gelfenbeyn set up Google Assistant Investments in September 2017, a year after joining the company following its acquisition of Dialogflow, a corporate venture-backed provider of conversational user experience software. The move followed the departure of Google Assistant corporate development lead Brock Huber to StockX in September 2019.
Miles Kirby, former managing director at Allianz-backed VC firm AV8, set up DeepTech Labs as an accelerator and VC fund based in Cambridge, UK. Kirby ran the UK side of AV8, with George Ugras, former head of IBM Ventures, as the US-based managing director of the $170m fund founded in 2018 with Germany-based insurer Allianz as the sole LP. Kirby had been managing director for Europe at Qualcomm Ventures, the CVC arm of US-listed mobile chipmaker Qualcomm between 2012 and 2015 before advisory work at semiconductor producer ARM and as a director at VC firm Oxford Capital.
Julie Kainz, former senior associate at Salesforce Ventures, joined VC firm Dawn Capital as a vice-president. Kainz’s investments in Europe at Salesforce over the previous two years included Akeneo, Algolia, AppsFlyer, Contentful, Gong, Qatalog, Salto.io, Techsee, Wefox, Whitehat and Zencity.
Creighton Hicks left his partner role at Dell Technologies Capital, the CVC subsidiary of US-based computing equipment provider Dell, to join VC firm LiveOak Venture Partners. Hicks came to the former from VC firm Kleiner Perkins Caufield & Byers in 2017 and concentrated on cloud computing, DevOps and cybersecurity technology deals. His investments included CloudKnox, Datometry and FullStory, taking a board seat at each company. LiveOak has hired Hicks as a principal who will focus on deal sourcing and portfolio management and he will relocate from Silicon Valley to Austin. LiveOak typically leads seed-stage rounds for local IT and technology startups.
Shinji Asada moved on from his position as head of Salesforce Ventures Japan, a CVC subsidiary Salesforce, to co-found venture firm One Capital. The recipient of a GCV Emerging Leaders award in 2020, Asada’s role at the US-listed company involved sourcing new deals, conducting due diligence and providing thought leadership in portfolio companies’ board meetings. He began his career at trading group Itochu where he spent more than a decade in different roles ranging from new business development and mergers and acquisitions to system integration and software-as-a-service sales, before joining CVC unit Itochu Technology Ventures in 2012. Salesforce Ventures Japan’s current portfolio includes business card management platform Sansan, accounting software producer Freee and human resources technology provider Bizreach.
Jaclyn Kossmann, former senior investment manager at corporate venturing unit Applied Ventures (AV), has joined In-Q-Tel (IQT), the strategic investment vehicle for the US government’s intelligence community, as an investor. AV, the cCVC arm of US-listed materials engineering technology provider Applied Materials, hired Kossman, a GCV Rising Star 2021 award winner, in 2017.
Kossman closed and exited some of its notable investments in the broader optics and semiconductor sector, according to AV global head Anand Kamannavar when contributing to her Rising Stars award profile in January. She had worked for two years at Green D Ventures, a VC firm that backs Dartmouth College-affiliated companies, where Kossman invested in more than 30 startups.
Josiane Ishimwe, an analyst at Intel Capital, was promoted to investment manager. Ishimwe originally worked as an intern in the CVC unit’s 2017 programme as part of a diversity initiative for the next generation of VCs.
At the time she was majoring in chemical engineering at Howard University with a minor in computer science, then joined the unit permanently.
Magic Leap, a US-based augmented reality device maker, hired experienced corporate venturers John Doherty and Walter Delph to strengthen its board under new chief executive, Peggy Johnson.
Doherty, who spent five and a half years as senior vice-president (SVP) for corporate development and president and chief investment officer at Verizon Ventures, US phone operator Verizon’s corporate venturing unit, became chief financial officer (CFO) at Magic Leap.
Doherty, a GCV Powerlist award winner, had been a CFO at Verizon before his venture work.
Delph, previously a partner and managing director at BCG Digital Ventures, management consultancy Boston Consulting Group’s CVC focused on innovation, product development and early-stage investing, became Magic Leap’s SVP and chief business officer, including strategy, marketing, corporate communications, sales, business development, and M&A.
Sector specialist: David Krane, CEO and managing partner, GV
David Krane is chief executive and managing partner for GV, US-based technology conglomerate Alphabet’s early-stage corporate venturing subsidiary formerly known as Google Ventures, and manages the vehicle’s activities globally.
GV’s focus areas include life sciences, consumer, enterprise and frontier technology. During his time at the unit, Krane has helped the unit back a variety of technology companies such as ride-sharing provider Uber, consumer goods stock exchange StockX, smart home device maker Nest and coffee roaster and retailer Blue Bottle Coffee.
Before joining Google, Krane had spent his time in both startups and public companies having worked for consumer electronics producer Apple, mobile chipmaker Qualcomm, Four11 – the predecessor of email service provider Yahoo Mail – and two cybersecurity technology developers.
Krane holds a bachelor of arts in journalism and music from Indiana University (IU) Bloomington and currently serves on the dean’s advisory board for the IU School of Informatics, Computing and Engineering.
Sector specialist: Shinichiro Hori, president, Z Venture Capital
Shinichiro Hori serves as president of Z Venture Capital (ZVC), a ¥30bn ($271m) vehicle created in April 2021 as the result of a union between Line Ventures and YJ Capital, the corporate venturing subsidiaries of messaging platform developer Line and Japan-based internet company Yahoo Japan.
Yahoo Japan and Line, the latter formed by South Korea-headquartered internet group Naver, closed their merger earlier in the same month and operate under Z Holdings, a publicly-listed holding company backed by Naver and telecoms firm SoftBank.
Key sub-sectors
Neo4j, a US-based provider of graph-centric database and related products, has raised $325m at a more than $2bn valuation in its series F round led by France-based private equity firm Eurazeo, with additional capital from Alphabet’s corporate venture unit GV (formerly known as Google Ventures) through partners Erik Nordlander – who wrote the first cheque in Cockroach Labs (last value $2bn earlier this year) – and Tom Hulme. In addition, Deutsche Telekom’s corporate venturing unit, DTCP, was a new investor through Florent-Aurélien Couturier-Crouzillac.
As news provider TechCrunch noted, in the past, most business analysis was built on relational databases but interconnected complexity is creeping in everywhere so graph-based data models have become central to modern machine learning and artificial intelligence applications.
This interest in the next generation of analytics tools is pushing the subsector to record heights both by deal value and volume for rounds including corporations, according to GCV Analytics.
The corporate venture capital vehicle will invest in developers of technology related to Z Holdings’ group businesses, such as consumer services, e-commerce, healthcare, cybersecurity, financial technology and enterprise software.
“We aim to generate win-win collaboration between startups and Yahoo, Line and other group companies of Z Holdings,” Hori told Global Corporate Venturing.
