The cut and thrust of dealmaking in media has continued over the past year, with 230 deals in the 12 months to August this year, ranging from small seed rounds of less than $1m to the $970m acquisition of video platform Twitch, backed by game publisher Take-Two Interactive.
The three biggest new funds, meanwhile, all reached at least $1bn and were all set up by China-based entities (see funds section below). The sector has also welcomed a range of new corporates, such as television and telecoms company Sinclair Broadcast Group, which set up corporate venturing arm Sinclair Digital Ventures, headed by David Amy, Sinclair’s chief operating officer, Chris Ripley, chief financial officer, and Rob Weisbord, chief operating officer of digital agency subsidiary Sinclair Digital Group.
People
Personnel changes have been few and far between in the media sector this past year, with Global Corporate Venturing identifying only five people changing jobs.
Renee DiResta, principal at digital media company O’Reilly Media’s corporate venturing arm O’Reilly Alpha Tech Ventures, left the unit to join shipping service startup Haven. DiResta said she would continue to back startups as an angel investor and as part of an internet-of-things syndicate on venture crowdfunding site AngelList.
Mark Read, chief executive of WPP Digital, the corporate venturing arm of the media and advertising company, moved to WPP’s media and advertising group Wunderman. Read has featured on the Global Corporate Venturing Powerlist for several years.
On Read’s departure, Scott Spirit, chief strategy officer of media and advertising company WPP, was promoted to chief digital officer. In addition to his existing responsibilities, Spirit is now in charge of areas such as WPP’s corporate strategy, including investments, business development and mergers and acquisitions. Spirit has been chief strategy officer since 2010.
Meanwhile, Mark Povey was made chief operating officer at the company’s corporate venturing arm WPP Digital. He will continue to act as the company’s general counsel.
Laurence Toney joined cable service provider Comcast’s corporate venturing unit Comcast Ventures, having previously served as chief executive of education website LearnStreet and general manager of game publisher Zynga. His responsibilities include leading the $20m Comcast Ventures Catalyst Fund’s investments on the US west coast from new offices in San Francisco.
Funds
Over the past 12 months, Global Corporate Venturing tracked 30 new funds from a variety of media companies. We look at the 10 biggest.
At the top of the pyramid is China-based video streaming platform Youku Tudou, which is to invest several billion dollars in startups over the next three years in an effort to diversify its revenue streams and product offering. Although the precise amount has not been revealed, Youku Tudou is reportedly committing “tens of billions of renminbi” (RMB10bn = $1.5bn) to corporate venturing. The company also plans to rebrand as Heyi Group.
IDG Capital Partners, the China-based venture capital affiliate of US-based media and technology company International Data Group, announced a $1bn fund dubbed IDG China Capital Fund III. No further details are known.
China Digital TV, a China-based media software company that operates a cloud-based platform enabling broadcasters to provide interactive content on TV sets, backed a $484m venture capital fund aimed at technologies related to digital television, providing $16.1m.
Venture capital firm Advance Vixeid Partners revealed it was seeking $400m for its first fund. The firm’s lead investor is media group Advance Publications, parent company of publisher Condé Nast. Advance may choose to co-invest in startups.
HV Holtzbrinck Ventures, the venture capital firm spun out of publisher Georg von Holtzbrinck, has closed its sixth fund at €285m ($331m). The firm has not named investors in the oversubscribed fund, but said it had attracted backers from Europe, the US and the Middle East.
GungHo Online Entertainment, a Japan-based gaming company, launched a ¥30bn ($289m) initiative to invest in south-east Asia-based game developers. The fund is managed by new Singapore-based subsidiary GungHo Online Entertainment Asia Pacific. Telecoms company SoftBank helped GungHo structure the new unit.
Israel-based venture capital firm Carmel Ventures has signed up China-based internet company Baidu, financial services group company Ping-An and cybersecurity company Qihoo360 for its $194m fund. The fund will invest in IT, fintech, digital media and consumer applications startups.
Beijing Enlight Media, a China-based film and television production company, has joined the corporate venturing world with a $163m fund dubbed Huaxing Enlight Venture Investment, which will seek out internet, media, entertainment, e-commerce and healthcare startups. Enlight has provided $32.5m.
Canada-based media company Torstar Corporation joined a C$193m ($154m) fund of funds managed by alternative asset manager Kensington Capital Partners. Kensington Venture Fund is aiming for a close of C$300m, and will invest in the IT, telecoms, energy, cleantech and digital media sectors.
Dragon Tiger Capital Partners, a new joint investment fund involving China-based Media Asia Group, Korea-based SM Entertainment and Taiwan-based conglomerate Fubon, hopes to invest in film and television projects in China. The fund was launched with an initial $20m, but is seeking to secure between $100m and $200m.
Deals
Out of the 230 that Global Corporate Venturing identified over the past year, the acquisition of Twitch towers over all others at $970m in cash. E-commerce company Amazon bought the social video platform in August last year, providing an exit to corporate backer Take-Two Interactive Software. Twitch, which had raised $35m in equity funding, was initially rumoured to be the subject of a $1bn acquisition by internet company Google.
Comcast was the busiest investor, with 20 deals, with media company Bloomberg in second place (19), followed by publisher Bertelsmann (16) and social network Gree (15). Media and technology company International Data Group took part in 13 deals, while publisher Hearst invested in nine, Japan-based online gaming group Dena in eight, and publisher Axel Springer, media company Chernin Group as well as record company Universal Music Group each participated in seven.
There was a notable miss. Entertainment company NBC Universal could have been one of the beneficiaries when e-commerce company Rakuten acquired online media network Popsugar in a $580m deal. NBC had led a $10m series B round for Popsugar in 2007, when the company was still known as Sugar Publishing, but sold the stake back to the startup when it pulled out of its advertising deal with NBC.
The largest investment deal comes in at $553m, raised by social media network Pinterest for its series G round. The company closed the round following a second tranche, backed by Rakuten, of $186m. Rakuten had previously backed a $100m round in 2012. Pinterest’s total funding now exceeds $1.1bn, and the company is valued at $11bn.
Media company Vice Media sold a 10% stake to cable television company A&E Network, owned by media companies Walt Disney and Hearst, securing $250m. The deal was followed a few days later by an identical transaction with venture capital firm Technology Crossover Ventures, netting Vice a total of $500m. 21st Century Fox acquired a 5% stake in return for a $70m investment in 2013.
Fox Sports, the sports broadcasting subsidiary of 21st Century Fox, and conglomerate Kraft Group participated in a $300m series D round for fantasy sports platform DraftKings. Fox Sports provided half the funding, and secured a commitment from DraftKings to spend $250m in advertising on the broadcaster over the next three years.
DraftKing’s series D round followed a $275m series E raised by its competitor FanDuel two weeks earlier. The corporate investors in FanDuel’s round included broadcaster Turner Sports, and media companies Time Warner, NBC and Comcast, which invested through their respective corporate venturing divisions Time Warner Investments, NBC Sports Ventures and Comcast Ventures. Internet company Google invested through its growth equity fund Google Capital.
21st Century Fox acquired digital advertising company TrueX, which already has James Murdoch, chief operating officer of 21st Century Fox, on its board. The $200m acquisition will enable Fox Networks Group to use TrueX to increase user engagement across its platforms.
Mobile game studio SGN obtained $130m in funding from game publisher Netmarble Games, making it SGN’s largest shareholder though the size of the stake has not been disclosed. As part of the deal, the two companies have inked a partnership agreement that will help SGN grow its market share in Asia, while Netmarble will enter western markets.
Content discovery platform Taboola raised at least $117m for its series E round, securing the initial tranche from a range of investors including media company Advance Publications, media company Yahoo Japan, Comcast and consumer goods provider Groupe Arnault. Internet company Baidu provided a multi-million-dollar extension, though the precise sum has not been revealed.
Mobile advertising exchange Nexage was acquired by mobile ad platform Millennial Media for $107.5m. The transaction provided an exit for Nexage’s corporate backers Hearst and telecoms firm SingTel. Hearst and SingTel had each contributed to a $15m series B round in 2012, through their respective corporate venturing units Hearst Interactive Media and SingTel Innov8.