Business services play a dominant role in most emerging and mature economies today, having taken over manufacturing and agriculture in importance. According to consulting firm Research and Market, the global professional services market was estimated at $5.4 trillion in 2019 and forecast to grow only by 0.1% in 2020 due to the economic slowdown brought about the covid-19 pandemic. The market is expected to re-emerge and grow at a CAGR of 7% from 2021 onward and reach $6.52 trillion by 2023.
Our broad definition of “services” covers a wide range of industries and subsectors – from accommodation and travel and real estate through education, human resources and consulting to logistics and other. It is imperative to consider developments in each to properly comprehend the trends in the data.
Despite Airbnb’s landmark IPO, travel and tourism faced an unprecedented decline owing to the global health emergency in 2020. According to the UNWTO World Tourism Barometer, international tourist arrivals plummeted by 72% between January and October last year. The report naturally attributes this sharp decline to “slow virus containment, low traveller confidence and important restrictions on travel still in place”. It also estimates that this has translated into a massive loss of $935bn in export revenues from international tourism, 10 times over the loss registered in 2009 after the global financial crisis. The plunge could also result in an estimated economic loss of over $2 trillion in global GDP. The drastic decline suggests that international tourism has essentially gone back to a level of 30 years ago, stated the report. This foreshadows tough times for emerging businesses in the travel tech space in the near term (at least until vaccines are fully rolled out and the world returns to normality). Depressed valuations of such businesses, however, may present investment opportunities at a cheaper price.
Another branch of services, sensitive to business cycle fluctuations and affected by the pandemic, is the real estate space. Some subsectors of real estate such as retail and office space have been obviously more severely affected than others and that has come with the emergence of “the future of work” area. It is still uncertain to what extent there may be a mean reversion once the pandemic has been largely tackled. Recovery, however, is expected. According to the DLA Piper’s Annual State of the Market survey on commercial real estate, 58% of respondents “cited an abundance of available investment capital as the top reason for an optimistic economic outlook”. A joint report by PwC and the Urban Land Institute, “2020 Emerging Trends in Real Estate Report”, found experts were “generally enthusiastic about capital in the market with the volume of private equity capital allocated to commercial real estate being estimated to exceed $100bn”.
On the innovation front, real estate tech had been already exerting an impact prior to the pandemic and is likely to continue to do so. As a case in point is, for example, the increasing use of blockchain. There already are tokenised properties in the developed economies like the US, UK, Germany and France. Some startups have pioneered the digitising of property titles and shares and selling them to investors. If real estate fundamentals deteriorate further, this will likely intensify the interest in the emerging proptech space.
The rise of e-commerce, driven by mobile technologies, has sprung opportunities for logistics service providers, which have been forced to shift business models. E-commerce itself was given a substantial boost by the pandemic. That highlighted the importance of digital transformation and efficiencies in supply chain management and logistics. The freight and logistics world market is expected to grow at a compound annual growth rate (CAGR) of approximately 5% by 2025, according to the “Freight and Logistics Market – Growth, Trends, and Forecasts (2020 – 2025)” report by Research and Market. It states that even amid the global economic slowdown, the logistics industry remained “buoyant”, in spite of trade tensions between China and the US in the pre-pandemic period.
“The outsourcing of logistics has been one of the defining trends of the global logistics industry. The logistics provider’s importance has risen considerably with the ongoing trend towards outsourcing non-core competences,” said the report. “Logistics industry majors across the value chain are expected to prioritise operational efficiencies, with investments in technology adoption. Freight forwarders that offer innovative online solution offerings in freight matching, custom brokerage and transportation management solutions are expected to transform the segment with enhanced customer experience. The warehousing industry is expected to transform significantly with process automation due to the emergence of cross-border e-commerce and increasing demand for integrated supply chain.” This is a positive outlook for emerging and innovative businesses in this space.
Education services is another subsector of services that was affected positively by the pandemic and is expected to grow. The growth of education services is underpinned by two major forces – demographics and a growing need for reskilling and professional development. The world education technology market was estimated at $76.4bn in 2019, according to a report by Grand View Research, and forecast to grow at a CAGR of 18.1% between 2020 and 2027.
The report also stresses on one of the longer-term positive impacts of this space: “Edtech is expected to play a crucial and significant role in creating jobs for future generations. Education across the globe is shifting towards student-centric and more inclusive learning. A key component of making an inclusive learning environment is implementing assistive technologies in an attempt to better cater to students with special needs.” In fact, according to the same report: “The business segment accounted for the largest share of 70.3% in 2019. The upsurge in the partnerships between edtech firms, educational institutes, and content developers is anticipated to create significant growth opportunities for the digital education sector. As a result, partnerships and collaborations are increasingly becoming a critical part of this developing ecosystem.”
The global market for consulting services is among the most mature subsectors of services. However, it is somewhat cyclical and closely linked to prevailing market conditions. Advanced technologies like cloud computing, robotics, blockchain and big data are key to improving business performance and streamlining operational processes.
The global market for management consulting services was estimated at $919.3bn in 2020, after a year of slow growth because of the pandemic, according to “Management Consulting Services Global Market Report 2020-30: Covid 19 Impact and Recovery” – a report by Research and Markets. It is, however, expected to grow at a CAGR of 8% from 2021 up to $1.15 trillion in 2023.
The report also notes the drive for value that is shaping this space: “Companies in the management consulting market are shifting from the traditional per-hour and per-month revenue model to a value-oriented revenue model. In line with increasing wages and pressure from clients to decrease pricing, many companies are shifting towards value-oriented billing.
“Value-oriented billing is easy to apply in the management consulting industry since the value (such as tax savings, damage awards, ad placements or the size of an acquisition or merger) is often explicit. It is expected that more management consulting firms will shift to value-based pricing as they try to become advisors rather than just service providers.”
We expect this trend to drive more investments in consulting services tech startups as well.
The subsector of legal services is also very open to technological disruptions that could streamline work. According to a recent Thomson Reuters survey, 64% of law firm leaders considered “insufficient leveraging of technology” as a medium-to-high risk factor for profitability and 91% of them expected it to help cut costs. The “2020 Legal Market Report: How Innovative Technology is Reshaping the Business and Practice of Law” report notes that there are several key technology factors pressuring legal service organisations – data, competition and cybersecurity.
“For example, a large majority of legal industry leaders said that using some combination of data analysis and technology to control costs in both law departments and law firms is now seen as a top priority. This indicates that these leaders more fully recognise the need for such legal tech adoption, and better grasp the advantages that these innovations can provide.” The report also concludes: “New technology solutions also enable more efficient processes for managing case matters, billing, lawyer collaboration, client communications and feedback, and other everyday concerns.”
Another business services subsector with many opportunities is human resources. The most palpable impact of pandemic has been the emergence of remote working or what some loosely refer to as “the future of work”. According to a recent report by Grand View Research, the global digital workplace market has been forecast to reach $54.2bn in size by 2027, growing at a CAGR of 11.3%.
The report explains the fundamental drivers of remote working. “The availability of new software and tools, demand for remote working, and focus on improved employee experience are driving the adoption of the digital workplace. Advancements in workplace technologies and Software as a Service (SaaS) have led to the implementation of cloud systems, thus, driving the overall market. The shift in the generational workforce has led to the adoption of digitalisation in the workplace. The utilisation of various gadgets such as smartphones, laptops, and tablets has provided ease to the mid-aged generation.”
Mihir Shah and Yishai Lerner, co-CEOs, JLL Spark and JLL Technologies
Mihir Shah and Yishai Lerner are co-chief executives of JLL Spark and JLL Technologies, the corporate venturing and technology arms of US-based real estate developer and property manager JLL.
JLL Spark hired the duo in mid-2017, and they joined JLL Technologies two years later. The $100m JLL Spark fund, which has backed some 20 proptech companies globally, now operates under JLL Technologies.
JLL chief executive Christian Ulbrich said at the time of JLL Technologies’ launch: “JLL is embracing technology to meet the needs of clients today and anticipate the opportunities of tomorrow. We are reshaping the future of work and the built environment. Mihir and Yishai bring a growth mindset to JLL Technologies. Under their leadership, JLL is positioned to be a global leader in real estate technology.”
Having been entrepreneurs themselves, Shah and Lerner knew first-hand how difficult it was to bring a new product to market, especially in an industry that has been slow to adopt new technology. Therefore, their goal is to partner entrepreneurs and help them tap into the resources of JLL’s business units so they can succeed in rapidly growing their companies.
Thomas Lounibos, global managing director, Accenture Ventures
Serial entrepreneur Tom Lounibos is global managing director of Accenture Ventures, the corporate venturing arm of Ireland-headquartered management consultancy Accenture.
He first joined Accenture Ventures as an entrepreneur-in-residence in April 2019, having joined the unit following a long career as a prolific technology entrepreneur and founder of six different software startups.
Lounibos took two of those companies public – KnowledgeWare and Sagent Technologies – and sold the other four to larger software companies. When he joined, Lounibos pledged to develop Accenture Ventures as “an investment and collaboration platform that bridges the gap between the global software startup community and the Global2000 who seek competitive advantage from emerging technologies”.
Formed in 2015 under the Accenture Innovation Architecture umbrella, Accenture Ventures serves as a link between the global innovation ecosystem and the parent company, bridging the latter’s clients with entrepreneurs and startups to accelerate their potential and carry out digital transformation.
With four decades of experience serving in executive roles at early-stage software companies and with wide industry connections with chief executives of application software and mobile startups, Lounibos is proficient in cloud application development and supports online user experiences.
Key sub-sectors
Education
One of the big shifts in 2020 was the surge in educational technology providers, with China in the lead.
There was a flurry of large rounds right before the end of the year, the biggest being a $1.6bn series E round for online tutoring platform developer Zuoyebang that included Alibaba and SoftBank Vision Fund.
Zuoyebang’s overall funding now stands at roughly $2.9bn, some 80% of which has come in the past seven or so months.
This is perhaps little surprise given the covid-19 disease has forced many more students to study at home or online.
As award-winning teacher Erik Vermeulen puts it in his blog : “Student behaviour and expectations are rapidly changing – mainly due to peer and performance pressures.”
This is creating tensions as incumbent schools and universities and education service providers react to what Vermeulen called “an informal learning environment of self-learning and more collaborative co-learning”.
In the face of a surge in edtech startups, the incumbents and other corporations are piling in.
The implications of online video platform Youtube being probably the most used education service and how artificial intelligence and data-scraped insights on people from their earliest ages are used is still to be explored.
But governments control their population’s education materials for a reason. As the Jesuits say: “Give me a child until the age of seven and I will show you the man.”
Logistics
If ever a crisis was perfectly designed to encourage a shift in consumer spending patterns then it was covid-19. Transforming restaurants into dark kitchens and then having the food delivered has benefited the Uber Eats and Deliveroos of the startup world. Groceries and other items being delivered to people’s houses has especially benefited Amazon and suppliers able to complete the last mile of delivery to people’s homes.
As AC Ventures, the corporate venturing unit of Mexico-based Arca Continental, wrote in the January issue of Global Corporate Venturing: “Technological transformation and covid-19 have revolutionised last-mile logistics.
“The World Economic Forum expects this industry to grow 78% globally by 2030. Conventionally, possible solutions were thought of as restricted only to elements such as the type of transport or the location of the cross-docking points. Now the trend is to have an efficient, holistic, end-to-end and data-driven technological approach to decision making that is focused on consumer needs.”
Behind the scenes such a rapid shift in buying patterns requires enormous logistical changes. Private equity firm Blackstone’s shift in its property division to logistics hubs versus online versus malls has benefited its returns. Walmart, thanks in part to its Prologis real estate company and corporate and innovation venturing teams, has been able to pivot to the online world in a way a host of retailers have failed to do.
The end-to-end nature of logistics is putting greater pressure on sourcing items and then following them through to the customers.
Sapphire Ventures, an independent corporate venturing unit backed by Germany-based enterprise resource planning group SAP, backed the $100m series D round for Project44, a US-based startup offering real-time visibility of where goods are in the logistics system for customers such as ABB, Lenovo and PepsiCo.
And this is encouraging supply chain groups, such as JD Logistics in China, a spinoff from Amazon peer JD, to set up their own corporate venturing units to look at blockchain and other forms of creating reliable trails on the supply chain and give people what they want, faster and cheaper than ever before.
Accommodation and travel
Reading December’s headlines, such as “Airbnb soars to near $100bn valuation as shares more than double in IPO” and “Company trades at over $150 a share from initial $68 price,” and you would be hard-pressed to say there had been a pandemic limiting travel around the world over the past year.
Stock markets, of course, try to price future earnings. As a result, investors have discounted the Financial Times’s estimated $710bn year-on-year loss of revenue to the travel industry from covid and whether it will continue to bleed money if people struggle to travel still.
Of crucial importance to accommodation and travel companies is whether corporate travel will revive or the disruption is more akin to the accelerated decline of bricks-and-mortar retailers at the hands of their online rivals.
Airbnb’s advantage, of course, is it leverages other people’s assets
to build its business. By renting out people’s homes rather than spending capital on infrastructure, such as planes and hotels, Airbnb can potentially adjust if there are more or fewer travellers.
Other business models are less clear-cut to succeed and so dealmaking slowed considerably last year with money and interest instead shifting towards virtual business operators, such as online event platforms, such as Hopin and Brella, and video calls, such as Zoom.
Real estate
“In many countries, the combination of the explosion in e-commerce together with the pandemic and its impact on offices and retail is prompting a wide-ranging and difficult rethink about what the purpose of town and city centres will be in the future,” the Financial Times noted in its Crisis in Retail article.
It seems their purpose will be to have fewer offices and shops. The JPI Urban Europe online conference in November, moderated by Global Corporate Venturing, talked about three main themes to transition to a sustainable future: positive energy districts and neighbourhoods, the 15-minute city and reducing district doughnuts, which have hollow centres and people who live in the suburbs.
If rents are lower in the future then there will be greater focus on lowering costs through energy efficiency and improved logistics of moving people and goods. And a powerful syndicate of corporate limited partners are supporting VC firms, such as Fifth Wall, which hired last month Greg Smithies from car maker BMW to develop its climate tech dealmaking.
And the sector is affected by factors outside of its control. People moving less and using digital communication tools creates different challenges for real estate investors, certainly those that built businesses around community working platforms, such as WeWork.
The sector in charts
For the period between January and December 2020, we reported 395 venturing rounds involving corporate investors from the services sector. Many of them (145) took place Japan (145) and the US (103), while 26 were hosted in China, 23 in the UK and 21 in India.
Many of those commitments (126) went to emerging enterprises from the same sector (mostly logistics, edtech, HR tech and real estate tech) as well as into companies developing other technologies in synergies with services: 82 deals in the IT (mostly enterprise software, AI, big data and cybersecurity), 35 in financial (mostly payment tech, insurtech and alternative lending), 34 in media (primarily digital marketing and social media) and 33 in health (mostly pharmaceuticals and medical devices).
On a calendar year-on-year basis, total capital raised in corporate-backed rounds halved from $18.84bn in 2019 to $9.15bn in 2020. The deal count increased slightly by 4% to 395, up from the 379 rounds reported in 2019. The 10 largest investments by corporate venturers from the services sector were concentrated mostly in the same sector.
The leading corporate investors from the services sector in terms of largest number were education services provider Globis, postal carrier Japan Post and logistics and shipping operator Maersk. The list of services corporates committing capital in the largest rounds was headed also by courier services providers FedEx and Xiamen C&D and home construction company Lennar.
The most active corporate venture investors in the emerging services businesses were telecoms firm SoftBank, cloud computing services provider Salesforce and internet conglomerate Alphabet.
Overall, corporate investments in emerging services-focused enterprises went down from 465 rounds in 2019 to 425 by the end of 2020, suggesting a 9% decrease. The estimated total dollars in those rounds wend down even more drastically, by 60%, from $36.59bn in 2019 to $34.62bn in 2019. However, it must be borne in mind that the dollar figure of 2019 included the massive bailout of WeWork by SoftBank.
Deals
Corporates from the services sector invested in large multi-million-dollar rounds, primarily raised by enterprises. None of the top 10 deals stood above $1bn.
US-based autonomous truck developer TuSimple raised $350m from investors including a host of corporates. Tyre producer Goodyear, rail operators Union Pacific and CN, shipping firm US Xpress and retailer Kroger were joined by Traton, a commercial vehicle subsidiary of carmaker Volkswagen, and Navistar, the diesel vehicle producer being acquired by Traton. The round was led by VectoIQ, the mobility-focused investment firm launched by Steve Girsky, a former vice-chairman of automotive manufacturer General Motors.
Founded in 2015, TuSimple is working on self-driving trucks that will be used as the basis of an automated freight delivery network that will also incorporate upgraded freight terminals and advanced mapping technology.
US-based digital wallet developer Bakkt closed a $300m series B round that included a group of corporates. Exchange operator Intercontinental, consulting firm BCG, crypto services provider CMT and PayU, the payment technology subsidiary of e-commerce and media group Naspers, invested directly, while software provider Microsoft took part through subsidiary M12. Enterprise-focused venture capital firm Goldfinch Partners and blockchain investment firm and hedge fund Pantera Capital filled out the round.
Originally formed by Intercontinental Exchange, Bakkt has developed a range of digital currency products, its core offering being a digital wallet that can hold assets as diverse as crypto tokens, loyalty points and in-game assets
US-based crop enhancement technology developer Indigo Agriculture received $175m of convertible equity financing from investors that included FedEx. The round was backed by unnamed existing shareholders and was raised alongside $25m in debt financing from financial services firms including Pacific Western Bank.
Indigo markets a range of products to help farmers grow food sustainably while increasing profitability, including microbial crop treatments, an agricultural data platform and a produce shipping service. The company has also launched the Terraton Initiative, a global programme through which it hopes to remove a trillion tons of carbon dioxide from the atmosphere by absorbing it in soil. The funding was to be used for international expansion of the company’s Grain Marketplace, an e-commerce platform that connects farmers with buyers of their crops.
Singapore-based logistics service provider Ninja Van collected $279m in series D funding from a consortium led by logistics service provider GeoPost. Mapping software producer Carmenta, ride hailing service Grab and telecoms firm Intouch Holding all contributed to the round, as did B Capital, Monk’s Hill Ventures, Golden Gate Ventures Growth Fund and two unnamed sovereign wealth funds.
Ninja Van runs a last-mile logistics network for online merchants and small businesses across Singapore, Malaysia, Indonesia, Thailand, Vietnam and the Philippines. The company is offering contactless deliveries during the coronavirus pandemic.
Diversified holding company Exor agreed to pay $200m for an 8.87% stake in Via Transportation, the US-based mobility services and software provider backed by carmaker Daimler and media group Hearst. The investment came as part of a larger series E round of undisclosed size also featuring property manager Mori Building, oil and gas supplier Shell and Hearst Ventures, Hearst’s corporate venturing arm.
Via provides a range of on-demand or scheduled urban mobility services covering ordinary urban and rural transport to specialised services across more than 20 countries. Its algorithm optimises transport for maximum efficiency and can be incorporated into existing transport management systems. The company works with partners such as public transit agencies, bus and rail services, private businesses, universities and school districts, offering services such as school busing or non-emergency medical transportation.
China-based supply chain services provider Xingyun raised $200m in a series C round co-led by insurer Taikang Insurance, publisher Shanghai United Media’s Zhongyuan Capital fund and investment firm Highlight Capital. Hidden Hill Capital, a fund for logistics company GLP, and C&D Emerging Industry Investment, the corporate venturing arm of real estate and logistics firm C&D Group, took part in the round. Morningside Venture Capital, Pantheon Asset, Matrix Partners China, Shandong Shuyuan Capital and Fivestar Holdings’ Xingnahe Capital filled out the round.
Xingyun provides a broad suite of supply chain services to importers, ranging from consultancy and financial services to logistics and trading. It also runs a cross-border online marketplace called XY-Storehouse.
SoftBank’s Vision Fund II led a $180m series C round for China-headquartered online education product developer VIPThink. Education technology provider New Oriental also took part, along with VC firms DCM and Sinovation Ventures, growth capital firm Enlight Growth Partners and the family office of Cai Doingqing. Also known as Wandou Siwei, VIPThink provides software designed to help children aged three to eight years old improve concentration and core learning skills. It serves some 250,000 students worldwide.
The round was disclosed alongside a merger with Magic Ears, a China-based English language learning service that had raised about $29m, including $6m from online tutoring service Yuanfudao and Bob Xu ZhenEdu Fund in 2017.
US-based travel accommodation provider Sonder secured $170m in a series E round valuing it at $1.3bn that included home builder Lennar.
Investment and financial services group Fidelity co-led the round with growth equity firm WestCap and VC firm Inovia Capital, and The Real Deal reported that it also featured Spark Capital, Greenoaks Capital, Valor Equity, Greylock Partners, Atreides Capital and Tao Capital.
Founded in Canada as Flatbook in 2012, Sonder provides renovated high-end apartments in a range of cities that serve as an alternative to hotel accommodation. The company oversees some 12,000 rooms across 28 cities and has pivoted toward offering temporary accommodation during the covid-19 pandemic while furloughing or firing roughly a third of its staff.
US-based energy efficiency technology provider Redaptive raised approximately $157m in funding from investors including real estate services group CBRE and energy utilities Engie and Evergy. Investment management firm CarVal Investors led the round, which was also backed by growth equity firm Linse Capital, while Engie and Evergy took part through Engie New Ventures and Evergy Ventures respectively.
Redaptive provides and installs materials and technology that enable large buildings to make significant energy savings at a large scale, and also offers a maintenance service once the systems have been deployed.
The funding will help the company expand its product offering, which includes energy-efficient lighting and heating, ventilation and air conditioning equipment.
China-based digital signature software provider eSign, which counts financial services provider Ant Group as an investor, has raised more than RMB1bn ($151m) in series D funding. Evergrande High-Tech Group, an affiliate of real estate developer China Evergrande Group, co-led the round with investment firm Shenzhen Capital Group and VC firm Fortune Capital. Grande Flight Investment, Far East Horizon, Fanchuang Capital, Gobi Partners China and THE Capital also participated in
the round.
Also known as Tsign, eSign has developed an electronic signature platform that had been used by more than 270 million customers as of June 2020.
There were other interesting deals in emerging services-focused businesses that received financial backing from corporate investors from other sectors.
Telecoms and internet Group, the China-based trucking services provider also known as Full Truck Alliance. The round was co-led with investment and Fidelity, Permira’s Growth Opportunities Fund and Sequoia Capital China. The round also included internet group 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 (AI) to match drivers with space in their trucks to customers, taking a cut of the fee and plotting out optimal routes for drivers. The company, formed by the merger of peers Huochebang and Yunmanman in 2017, said it has reached profitability and will allocate the capital to research and development and the expansion of its transportation capacity.
China-based online tutoring platform developer Zuoyebang closed a $1.6bn series E-plus round featuring e-commerce group Alibaba and SoftBank’s Vision Fund I. Hedge fund manager Tiger Global Management, VC firm Sequoia Capital China and private equity fund FountainVest Partners also participated in the round, which came after reports that the company was raising money at a $10bn valuation.
Zuoyebang runs an online education platform with 50 million daily active users and 170 million monthly active users, offering services such as live tutorials and homework assistance, the latter through an app with some 300 million answers to education questions. The funding will support the expansion of its categories and the growth of a business-focused offering.
Yuanfudao, a China-based online education platform developer backed by Tencent, raised $1bn in a series G2 round led by investment firm DST Global. The round also featured seven or eight other investors and valued the company at $15.5bn post-money. Founded in 2012, Yuanfudao offers livestreamed online courses for students at primary and secondary school level in addition to professional training for adults.
China-based educational software provider Empower Education Online (EEO) raised $265m in a series C round featuring Tencent and quantitative trading firm Susquehanna International Group (SIG). The round was led by GL Ventures, the VC arm of hedge fund manager Hillhouse Capital, and also featured investment firm Ince Capital and growth equity firm Gaocheng Capital. SIG may have taken part through its SIG Asia vehicle, though the company would not confirmed that. EEO created an interactive classroom programme called ClassIn that includes features such as interactive blackboards and online homework management tools. The company claims about 60,000 schools and educational institutions as customers and its online platform has approximately 20 million monthly active users.
Traveloka, an Indonesia-based online travel booking platform backed by e-commerce group JD.com and travel services provider Expedia, raised $250m in equity financing. The round was led by an undisclosed financial institution – reportedly the Qatar Investment Authority, the country’s sovereign wealth fund. Existing shareholders also contributed to the round. Traveloka was reportedly targeting a valuation of approximately $2.75bn, approximately 17% down on its previous round.
Founded in 2012, Traveloka enables consumers to book flights, bus and train journeys, accommodation, meals and entry to local attractions. Users can also take insurance policies and benefit from a travel credit card. Traveloka is active in Australia, Indonesia, Malaysia, Thailand, Vietnam, the Philippines and Singapore.
The company has struggled during lockdowns but said some of its markets, most notably Vietnam, were slowly returning to pre-pandemic levels.
SoftBank provided $215m for Norway-headquartered online learning platform developer Kahoot through a private placement. The deal involved SoftBank buying 43 million shares priced at NOK43.00 ($5.00) each, giving the corporate a 9.7% stake and valuing Kahoot above $2.2bn. It also included a provision preventing SoftBank from increasing its stake past 10% in the subsequent six months.
Kahoot is the creator of an online platform that uses gamification to help children, students and adults learn. More than 200 million games have been played through the platform over the past year.
The deal came four months after VC firm Northzone and Kahoot chief executive Eilert Hanoa supplied $28m for the company through a separate private placement to take its total funding to $118m.
China-based online arts tuition service Meishubao Education collected $210m in a series D round featuring Bojia Capital, the corporate venturing arm of chemical producer Do-Fluoride.
The round was led by The Rise Fund, an impact-focused investment vehicle for private equity group TPG, and included Fortune Capital, Winsdom Capital, SAIF Partners and Chuangzhi Capital.
Meishubao provides online arts tuition for children and teenagers, and has expanded into offering courses for adult learners that combine online and offline tuition. The series D proceeds will help strengthen its product, distribution and branding.
Thai state-owned petroleum producer PTT Group led a $200m series D round for Thailand-based e-commerce logistics provider Flash Express. The round also featured Durbell, a subsidiary of consumer goods conglomerate TCP, Krungsri Finnovate, the VC arm of financial services firm Bank of Ayudhya, and unnamed existing backers.
PTT invested through its PTT Oil and Retail Business Public Company subsidiary. Flash Express operates a logistics service on behalf of online merchants that includes door-to-door pickup and delivery, operating out of some 5,000 service outlets across its home country.
It intends to partner the corporate investors on introducing new services and expanding into more Southeast Asian countries.
The company said the round increased its overall funding to roughly $400m.
Exits
Corporate venturers from the services sector completed 40 exits in 2020 – 26 acquisitions, nine initial public offerings (IPOs), three mergers, one stake sale and one other transaction. The total estimated exited capital in those transactions was $6.15bn, reflecting several large exits.
On a year-on-year basis, the number of exits went up 67% from 25 such transactions tracked in 2019 and so did the total estimated capital in those exits – $6.15bn, having climbed steeply from $3.81bn.
KE Holdings, the China-based online estate agent also known as Beike, went public in a $2.12bn IPO in which Tencent invested $160m. The offering consisted of 106 million American depositary shares (ADSs), each equating to three ordinary shares, issued on the New York Stock Exchange and priced at $20 each. The price stood above the $17 to $19 range the company had set, valuing it at about $22.6bn.
Tencent purchased 8 million ADSs while hedge fund manager Hillhouse Capital paid $100m and VC firm Sequoia Capital bought 3.5 million shares.
KE Holdings was formed in 2001 as real estate brokerage Lianjia before adding Beike as an online and offline platform that manages real estate transactions. The combined platform provides access to 260 real estate brokerage brands and had 39 million monthly active users as of June last year.
Salesforce agreed to acquire one of its portfolio companies, US-based customer relationship management (CRM) software provider Vlocity, for $1.33bn in cash. The transaction included the company assuming unvested equity awards held by Vlocity’s employees, and the price was described as net of the value of shares currently owned by Salesforce.
The acquisition gave an exit to professional services firm Accenture and insurance provider New York Life. Founded in 2014, Vlocity has created a range of CRM apps that fit on top of the Salesforce platform but which are tailored for specific industries such as communications, media and entertainment, energy and utilities, healthcare and insurance, in addition to government work.
Enterprise software producer ServiceNow agreed to acquire Element AI, a Canada-based AI technology provider backed by consulting company McKinsey & Company, Tencent, Microsoft, chipmakers Intel and Nvidia as well as diversified conglomerate Hanwha.
The companies did not disclose the size of the deal but multiple sources reported about $500m, a slight reduction on the $600m to $700m valuation at which Element had raised money before. Founded in 2016, Element has developed AI software products that make in-depth research and text processing more efficient. ServiceNow intends to use the technology to make its workflow software platform more intelligent.
Design software producer Autodesk agreed a $240m deal to acquire Spacemaker, a Norway-based property development software provider backed by real estate developer NREP. In June 2019, Spacemaker closed a $25m series A round featuring NREP and existing backer Construct Venture, an investment vehicle set up by building association Obos and construction firm AF Gruppen.
Spacemaker’s cloud-based software platform uses AI to help architects and property developers design buildings and urban developments. The platform allows users to quickly create and iterate design projects while also incorporating criteria and data such the terrain, weathers, lighting, traffic and zoning.
US-based gene therapy developer Akouos went public in an IPO sized at approximately $213m, scoring exits for real estate developer Nan Fung’s Pivotal BioVenture Partners fund, pharmaceutical firm Novartis and health system manager Partners HealthCare. The company priced 12.5 million shares at $17 each, increasing the number of shares in the offering from 8.3 million and pricing them above the offering’s $14 to $16 range. Akouos’ shares closed at $21.50 on their first day of trading on the Nasdaq Global Select Market, valuing it just short of $700m.
Founded in 2016, Akouos is developing gene therapies that will help patients suffering from hearing loss, and will spend $35m of the IPO proceeds on a phase 1/2 clinical trial for its lead product candidate, AK-OTOF, to combat hearing loss caused by mutations in the OTOF gene.
Fusion Pharmaceuticals, a Canada-based cancer radiopharmaceuticals developer – which counts Nan Fung’s Pivotal BioVenture Partners fund, medical technology provider Varian Medical Systems and pharmaceutical group Johnson & Johnson as investors – filed for a $100m IPO.
Founded in 2014, Fusion is developing targeted alpha therapeutics, a type of cancer treatment that relies on equipping molecules such as antibodies with radioactive particles called alpha emitting medical isotopes to kill cancer cells. Alpha particles can only travel a short distance, making it possible to localise radiation and avoid damage to healthy tissue.
Fusion’s lead asset, FPI-1434, is undergoing phase 1 studies in an injected form for advanced, refractory solid tumours. The company said in the filing that it has been forced to pause further recruitment as the pandemic led to clinical trial sites to be closed.
WealthNavi, a Japan-based robo-adviser developer that counts digital media company Gree, consumer electronics manufacturer Sony, digital marketing agency Opt and IT services firm NEC Corporation as investors, floated in Japan in a ¥17.9bn ($173m) IPO. The company’s shares were priced at ¥1,150 each and that price increased 68% on its first day of trading on the Tokyo Stock Exchange valuing it at just over $500m. Founded in 2015, WealthNavi has built an online investment platform that uses AI to assess the risk appetite of each customer. It manages some $3.1bn of assets on behalf of its customers and puts the cash into exchange-traded funds.
Eargo, a US-headquartered hearing aid developer backed by Nan Fung, floated in an IPO sized at approximately $141m. The offering involved Eargo increasing the number of shares in the offering from approximately 6.67 million to more than 7.85 million and pricing them at $18 each, above the IPO’s $14 to $16 range. The company’s shares opened on the Nasdaq Global Select Market at $36.00 and closed at $33.68 on their first day of trading, valuing it at more than $1.22bn. Founded in 2010, Eargo has created a high-fidelity hearing aid that is designed to be comfortable and virtually invisible.
China-based property rental marketplace Danke Apartment, which counts co-working space provider UCommune, media group Bertelsmann and financial services provider Ant Financial as investors, floated, securing almost $130m. The offering consisted of 9.6 million ADSs on the New York Stock Exchange, each representing 10 ordinary shares, priced at $13.50 each. The price was below the IPO’s $14.50 to $16.50 range and the number of ADSs was cut from 10.6 million. Danke operates what it calls a co-living platform, running an online platform where users can rent apartments across 13 Chinese cities that it sources from their owners and renovates to a fixed standard.
BlueCity Holdings, the China-based owner of gay dating app Blued, floated in an $84.8m initial IPO, enabling corporates New World Development and China Mobile Games and Entertainment to exit. The company priced 5.3 million ADSs, each representing two common shares, at $16 each, at the mid-point of the $15 to $17 range. Its shares closed at $25.99 on the Nasdaq Global Market, valuing it at approximately $462m.
Blued’s dating and social media app has more than 49 million registered users and averages 6 million monthly active users. It increased revenue by more than 50% to $107m in 2019 while more than halving its net loss to $7.5m at the same time.
Global Corporate Venturing also reported several exits of emerging services-related enterprises that involved corporate investors from different sectors.
US-based short-term accommodation marketplace Airbnb went public in an IPO on the Nasdaq Global Select Market representing an exit for Alphabet. The company issued 50 million class A shares priced at $68 each, significantly above the offering’s initial $56 to $60 range, while existing shareholders divested just over 1.32 million shares at the same price. Airbnb was aiming to raise $3.49bn in proceeds from the flotation. The initial price valued Airbnb at roughly $47bn, although the price of the stock rallied violently on the first day of trading and closed at $139.25, effectively doubling its market capitalisation.
Airbnb runs an online platform that enables users to list properties and rooms for rental by others. Although its business has been severely affected by social distancing measures amid the pandemic, 5.6 million of its 7.4 million listings were active as of the end of September 2020.
Kuayue Express, a China-based delivery services provider backed by logistics property developer GLP, agreed to sell a controlling interest to JD Logistics, a subsidiary of e-commerce group JD.com, for RMB3bn ($432m). The deal is expected to close in the third quarter of 2020 and will involve JD Logistics acquiring both existing and newly issued shares in Kuayue Express. Founded in 2007, Kuayue Express has built an integrated logistics network with services ranging from same-day delivery and intra-city shipping to cold-chain transportation for fresh produce. It oversees 13 freight planes and 17,000 trucks that operate across China.
China-based education software provider 17 Education & Technology Group floated in the United States in an IPO sized at almost $288m that enabled digital media group ByteDance to exit. The offering involved the company issuing 27.4 million ADSs, each of which represented 40% of an ordinary share, priced at $10.50 each,
in the middle of the $9.50 to $11.50 range.
Also known as 17Zuoye, 17EdTech combines in-class learning software that uses data to drive learning and assessment products, in addition to large-class online tutoring services that use AI to offer more personalised learning. The company almost quadrupled its revenue year on year to approximately $119m for the first nine months of 2020, though its net loss rose 26% to $144m in the same period.
Property engine developer Homesnap agreed to a $250m cash acquisition by deal estate data provider CoStar Group. Homesnap counts newspaper publisher AH Belo among its backers. CoStar expects to extend its property coverage through the acquisition, particularly in the residential segment, increasing its total listings from nearly 1.4 million to more than 2.6 million.
Launched in 2008 as Sawbuck Realty, Homesnap has developed an online real estate platform with a database that includes listings for properties from more than 250 multiple listing services. It claims to have more than 1.1 million real estate agents signed up to the professional edition of its platform, representing more than 90% of residential agents in the US.
WeWork China, the local offshoot of US-based co-working space provider WeWork backed by SoftBank, was acquired for $200m by growth equity firm Trustbridge Partners. The company’s official announcement referred to the deal as a “follow-on investment”, however, the transaction gave Trustbridge a majority stake, while WeWork retained a minority shareholding. The company runs more than 100 shared office spaces across 12 cities and to have more than 65,000 members. Trustbridge said it would look to drive further growth, but there have reportedly been layoffs.
Quhuo, a China-based staffing services provider backed by internet company Baidu and SoftBank, floated on the Nasdaq Global Market in a $33m IPO. The company priced 3.3 million shares at $10 each, in the middle of the $9 to $11 range it had set. Its shares peaked at $20.90 on their first day of trading and closed at $11.59, giving it a valuation of about $600m.
Founded in 2012, Quhuo provides on-demand staff and operational support for mobile services such as ride hailing, food and grocery delivery platforms across 73 Chinese cities. The company had cut losses from $13.4m to $1.9m in 2019 while increasing revenue 72% to $295m. The IPO proceeds will support the expansion of Quhuo’s services across various sectors, in addition to strengthening marketing and the company’s technology resources.
Classified listings operator Info Edge sold its stake in Applect Learning Systems, the India-based study material provider also known as Meritnation, Press Trust of India reported. The company divested the stock for Rs 500m ($7m) to medical exam preparation service Aakash Educational Services, according to a Bombay Stock Exchange filing cited by PTI.
Meritnation offers study materials, exam preparation and practice tests in addition to tutoring and live classes, covering students aged roughly six to 18 years old. It looks to use teaching methods such as adaptive and conceptual learning as well as conceptual videos.
Funds
For the period between January and December 2020, corporate venturers and funds investing in the services sector secured over $2.55bn in capital via 42 funding initiatives, which included 20 VC funds, 12 new CVC subsidiaries, eight accelerators, one incubator and one other initiative.
On a calendar year-to-year basis, the number of funding initiatives in the sector was only up considerably from the 29 in 2019. The total estimated capital, however, had plummeted 77% from $11.32bn the previous year.
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 stage, and its areas of interest include enterprise software as well as financial, healthcare, consumer, transportation and logistics technology.
China-based courier service operator SF Holdings and investment management firm Citic Capital have launched a RMB2bn ($308m) fund. SF Holding provided $77m through its Patriot Success and Abundant Harvest units, while Citic Capital supplied $15m through a subsidiary called Infinite Benefits. Singaporean sovereign wealth fund GIC committed $216m through its Reco Aquamarine Private unit. The CC SF China Logistics Properties Investment Fund will focus on the logistic sector in China. SF Holdings is the parent company of SF Express, a domestic and international delivery services and logistics provider.
Luxembourg-based investment firm Blue Like an Orange Sustainable Capital closed a Latin America-focused fund with limited partners including insurers Axa, BNP Paribas Cardif, CNP Assurances and SG Insurance at $200m. Financial services firm HSBC, pension fund MACSF and family offices for Ronald Cohen and Ray Chambers also made commitments to the Latin America Fund I along with undisclosed additional investors.
Founded in 2017, Blue Like an Orange concentrates on mezzanine financing deals supporting the United Nations’ Sustainable Development Goals mandate. The firm has already invested more than $80m out of Latin America Fund I and concentrates on areas including access to finance for the unbanked as well as infrastructure-as-a-service, agricultural, healthcare and education technology.
Latin America Fund I has a co-financing agreement with IDB Invest, a private sector credit subsidiary of the multilateral Inter-American Development Bank, in a bid to tap private capital for the Latin American innovation ecosystem.
Fosun RZ Capital, the VC affiliate of diversified China-based conglomerate Fosun, has raised RMB1.3bn ($186m) for the first close of its latest fund. The vehicle, described as a “sci-tech innovation fund”, has a RMB2bn target for its close and has secured undisclosed companies and government-led funds as limited partners. Founded in 2013, Fosun RZ maintains offices in the US, India, Israel and Singapore as well as in its home country of China and has more than $1.4bn of funds under management.
The firm invests from seed to late stage, in sectors including mobile internet, culture and entertainment, and financial, education, retail and automotive technology, in addition to cutting edge technologies like AI or big data. Fosun RZ’s latest fund is the first to take outside investments and it will concentrate on portfolio companies in Guangzhou or other cities in China’s Greater Bay Area.
Philippines-based diversified conglomerate Ayala closed a $180m fund with an anchor commitment from the corporate itself and contributions from its subsidiaries AC Energy, AC Industrials, AC Ventures and BPI. Telecoms firm Globe Telecom also joined the roster of limited partners.
The Active Fund originally had a target of $150m and its final size makes it the largest venture fund to emerge out of the Philippines to date. The Active Fund – (Active is an acronym for Ayala Corporation Technology Innovation Venture) – is managed by Kickstart Ventures, the investment arm of Globe Telecom. It is Ayala’s first investment vehicle.
The fund will invest between $2m and $10m in companies internationally, targeting series A through D rounds in industries such as proptech and construction technology, fintech as well as e-commerce. It will also look for opportunities around urban challenges in emerging countries throughout Asia, considering startups focused on areas such as raising blue-collar workers’ skillsets and improving access to scarce but vital resources such as water.
Australia-based real estate investment firm Taronga Ventures secured corporate backing for a real estate technology fund it plans to close at $100m. Real estate services provider CBRE and real estate investment managers Patrizia and Dexus contributed to Real Tech Ventures Fund.
A further 13 property investment managers, pension funds and sovereign wealth funds were conducting due diligence with a view to investing at the time of the announcement. Real Tech Ventures Fund will back Asia-based companies developing technologies that can support innovation in the property sector. Avi Naidu, another co-founder and managing director, will oversee the vehicle from an office in Singapore.
China-based, Southeast Asia-focused VC firm ATM Capital closed a fund backed by corporates Alibaba and 58.com at about $100m. Founded in 2017, ATM Capital aims to bring Chinese expertise to bare helping Southeast Asia-based startups grow. The fund is its first and it had set a $200m target for its final close, but the covid-19 crisis had impacted fundraising activities.
Alibaba’s EWTP Technology and Innovation Fund and online classified listings operator 58.com are both among the fund’s limited partners, as are Alibaba co-founder Eddie Wu and fellow individuals Wang Xiaochuan, Jet Li, Tao Zhang Jiawei Gan. ATM Capital concentrates on business services providers, media and financial technology developers and has built an 11-strong portfolio.
Japan-based real estate developer Mitsui Fudosan partnered VC firm Global Brain to form an ¥8.5bn ($81m) corporate venturing vehicle, 31Ventures Global Innovation Fund II.
The second fund, abbreviated as CVC II, will invest in startups developing real estate services or digitisation and smart city technologies. The initiative will also seek out companies with innovative business models that can complement Mitsui Fudosan’s core business. Mitsui Fudosan will receive Global Brain’s management support for 31Ventures in areas such as deal sourcing and portfolio company growth all the way to a hypothetical IPO.
Pinnacle, the US-based supply chain services provider formerly known as PinnacleArt, set up a $50m corporate venturing unit. The vehicle, Pinnacle Ventures, will focus on reliability technology. It will be run by Nathanael Ince, vice-president for business development at Pinnacle.
Ince said: “Innovation is at the core of Pinnacle’s values. As a company, we are not only driving heavy innovation internally, but we also want to empower others to do the same and help take the best ideas to industry to make the industrial community more reliable than it has ever been.”
US-based instant messaging app Slack earmarked $50mfrom its balance sheet to launch a new VC fund aimed at broadening Slack-backed investments beyond its own platform.
This is Slack’s first independent attempt at venture investing after having launched a $25 million fund in collaboration with several of its investors.
The fund will focus on work-related tools and companies related to the new way of remote working, boosted by the covid-19 pandemic, whether or not they are built to work with Slack.
University
By the end of 2020, we tracked 28 rounds raised by university spinouts developing services-related technologies, a considerable drop from the 50 recorded in the previous year. The level of estimated total capital deployed in 2020 stood at $367m, only a quarter of the $1.47bn from 2019. This suggests that the pandemic has exerted considerable impact on innovation in the sector.
Coursera, a US-based online education spinout of Stanford University, received $130m in series F funding from investors including recruitment firm Seek Group. VC firm New Enterprise Associates led the round, which reportedly valued Coursera at $2.5bn. Kleiner Perkins, Learn Capital, SuRo Capital Corp and G Squared also participated.
Founded in 2012, Coursera provides free and paid-for online classes ranging from graphic design and coding to full-fledged university degrees, in partnership with more than 200 universities and educational organisations. The series F proceeds will go to product development and international expansion in addition to improving the company’s engineering capabilities and growing the number of courses
on offer.
Onfido, a UK-based facial biometrics software developer backed by University of Oxford, collected $100m in funding from investors including Microsoft and Salesforce. The round was led by TPG Growth, part of private equity group TPG, and also featured undisclosed additional backers. Salesforce and Microsoft took part through corporate venturing subsidiaries Salesforce Ventures and M12 respectively.
Onfido has developed facial biometrics technology that verifies a mobile device user’s identity. The software relies on AI to compare a photograph of an identification document such as a passport with a selfie taken by the user. The platform is also capable of running background checks and generating risk reports.
The company launched out of the software incubator run by Oxford’s tech transfer office, Oxford University Innovation, in 2012.
Duolingo, the US-based language learning app spinout of Carnegie Mellon University, raised a $35m financing round, reportedly increasing its valuation to $2.4bn. Investment manager Durable Capital Partners and growth equity firm General Atlantic provided the capital, which lifted the company’s overall funding to $183m.
Founded in 2009, Duolingo has built an online platform that helps users learn some 40 different languages.
The company has 98 courses available and will put the cash into a recruitment drive that has already involved it increasing headcount from 200 at the end of 2019 to 350 in 2020, in addition to research and development.
People
We reported many people moves in the business services sector during the 12 months of 2020. The most notables ones were in US-based management consulting firm Accenture.
Michael Redding left Accenture after 29 years at the firm that including five years as founder and head of corporate venturing unit Accenture Ventures. Redding said: “I am ending my run at Accenture as the time is right to pass the mantle on to an exciting leadership team that will take our programme to new heights. After a break 29 years in the making (such as covid-19 will accommodate), I am looking forward to a new adventure building on my experience in technology innovation and corporate venturing.
Serial entrepreneur Tom Lounibos was promoted to global managing director of Accenture Ventures. Lounibos joined in April 2019 as an entrepreneur in residence, pledging to develop it as “an investment and collaboration platform that bridges the gap between the global software startup community and the Global2000 who seek competitive advantage from emerging technologies”. Lounibos joined Michael Redding month before his departure.
Accenture also hired Jake Kaldenbaugh to run its strategic minority investing or corporate venture capital (CVC) programme. Kaldenbaugh joined Accenture Ventures after he set up cloud consulting firm CloudStrategies in April 2019 to advise on growth market opportunities. Kaldenbaugh had worked at emerging growth investment bank GrowthPoint Technology Partners.
Pramila Mullan, a senior principal at Accenture Ventures, the CVC arm of management consultancy Accenture, left to join US-listed computing technology producer IBM. Mullan, a Global Corporate Venturing Rising Stars 2019 award winner, was taken on as a partner and director of ecosystems and ventures in IBM’s Global Business Services (GBS) division. GBS’s new ventures approach under Mullan will complement the existing IBM Ventures team under Angie Grimm. Mullan said: “The last five years, I have had the incredible honour of helping grow Accenture Ventures. It has been a privilege to be a member of the Silicon Valley and VC ecosystem and to serve our portfolio companies. Now, I will be doing the same in a new role [at IBM.]”
Martin Witt left from management consulting firm Accenture’s strategic consulting arm, Accenture Strategy, to head Sweden-based commercial vehicle manufacturer Volvo’s corporate venturing unit, Volvo Group Venture Capital (VGVC). Accenture had hired Witt in 2006 as a senior manager before promoting him to director a decade later. He became management director in 2018 to head Accenture Strategy, focusing on automotive strategy in the Nordics region. His vice-president role at VGVC will entail leading investments in innovative developers of technology and services that have a strategic fit with Volvo.
Natalie Hwang, formerly head of Simon Ventures, US-based Simon Property Group’s corporate venturing unit, launched Apeira Capital Advisors, a growth equity and tactical opportunities fund focused on disruptive distribution technology. The fund is reportedly targeting $200m and it would use “hedge fund principles and practices” to achieve returns from high-growth companies whose valuations have soared too high. Prior to Apeira Capital and Simon Ventures, Hwang worked at alternative asset manager Blackstone Group where she worked with hedge fund startups.
The investment team of Randstad Innovation Fund (RIF), a corporate venturing vehicle for Netherlands-based human resources firm Randstad, founded a VC firm dubbed Taptrove Ventures. RIF managing partners Paul Jacquin and Ilonka Jankovich, who jointly featured on Global Corporate Venturing’s Powerlist in 2018 and 2019, are overseeing the new fund, having been joined by principal Florian Chilla, an investment manager at RIF. Jankovich, Jacquin and Chilla will continue to manage the RIF portfolio and Randstad has agreed to take a limited partner position at the new firm.
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 Kirk’s13 years 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 included investments in Platfora, which was acquired by Workday in 2016, and Piston Cloud Computing.
UK-based financial services and insurance provider Legal & General (L&G) named Jasan Fitzpatrick managing director of principal investment for its corporate venturing arm, L&G Capital (LGC). Fitzpatrick joined LGC in July 2018 as general counsel after more than two decades of in-house legal practice at companies including banking firm Northern Rock, insurer Premium Credit and homebuilder Cala Group. He had overseen the unit’s compliance with legal and regulatory requirements and governance principles, and served as company secretary. L&G began conducting direct investments in late 2016, after having shifted from its traded asset approach. LGC invests from its parent company’s corporate balance sheet and has dedicated £600m ($780m) to VC and small and medium-sized enterprise financing.
Brittany Skoda left her position as vice-president of investments at Workday Ventures, the corporate venturing arm of human resources software producer Workday, to join investment bank Morgan Stanley. Skoda was appointed managing director and global head of software banking for the technology division. She will work alongside Melissa Knox, who was promoted to global head of software at the bank. Skoda had previously worked for investment bank Goldman Sachs for almost a decade, starting as an analyst in technology investment banking before climbing the ladder to senior vice-president.
Breton Birkhofer, principal at Prologis Ventures, the corporate venturing unit for Prologis Ventures, US-based commercial property manager Prologis, joined peer DivcoWest as director of VC investments. At Prologis Ventures, Birkhofer had taken board observer positions at portfolio companies Wise Systems, Airspace Technologies and WorkStep. At DivcoWest, Birkhofer said he would be “investing in high growth technology companies that are transforming the real estate industry,” according to his LinkedIn.
LLYC, a Spain-based communications and public affairs consulting firm, hired Francisco Sánchez Rivas with the intention of ramping up its corporate venturing and merger and acquisitions strategy. Rivas will sit on the firm’s board of directors while also remaining on the board of many other technology and media companies. He has spent 25 years in investment banking, including a spell as CEO of wealth management firm Edmond de Rothchild’s Spain and Portugal-focused investment bank. Rivas later established boutique middle-market banking firm Zechman Capital.
Ross Kimbel, former head of co-working space provider WeWork’s startup services arm, joined Silicon Road Ventures, a US-based VC fund focused on early-stage startups in commerce and retail technology. He was hired Kimbel a managing director and partner. He was head of WeWork Labs from August 2019 to January 2020, after co-founding Be Curious Partners, another early-stage VC fund, in 2017. Be Curious was spun out of children’s toy producer Kids II, where Kimbel had been vice-president of its New Ventures business unit since 2016. Kimbel had been global director for innovation and entrepreneurship at a Coca-Cola investment arm.
The GCV Analytics definition of the services sector encompasses accommodation and travel, human resources, education, business and legal consultancy services, communication and market research services, logistics and supply chain services, real estate, classifieds and review platforms and other subsectors