AAA Venturing soldiers on amid market turmoil

Venturing soldiers on amid market turmoil

April came to a close, and the wider markets continue to be problematic. At press time the European Central Bank had cut rates by 0.5% in an effort to kickstart a stuttering Europe, where eurozone employment hit a record 19 million.

However, while there are a number of negative economic indicators, stock markets continued to test record highs, led by the S&P 500, with technology one of the sectors driving the excitement, as well as the prospect of further central bank money.

Wider corporate venturing activity continued to be robust, although the month was down on prior periods. In April there were 64 investments worth $885m, 93 investments worth $1.6bn in the same period last year, and 78 investments worth $905m in March.

There were six exits in the month worth $980m, compared with nine exits and one initial public offering worth $866.2m in the same period last year, and six exits as well as two initial public offerings worth $842m in March.

The largest investment was General Electric’s injection of $104m into Pivotal, a spin-out from data and cloud services provider EMC/VMware, for a 10% stake, which according to a GE insider was “such a large deal, it is not considered GE Ventures for the purpose of budget, but it went through the same channels”.

The second-largest investment was the $57m raised by Qunar, a China-based travel search engine with Baidu as the biggest investor, while the third-largest deal was the $50m C round raised by SnapDeal, which was led by online marketplace eBay.

The largest exit was the $400m sale of CyOptics, a US-based optical chip maker backed by peers such as Cisco and Intel, to Avago Technologies, a US-based networking technology company. The second-largest exit was the sale of Ubiquisys, a UK-based developer of telecoms technology backed by various corporations, to Cisco, for $310m.

The third largest exit was the sale of Mashery, a US-based applications management company backed by Cisco, to Intel for a reported $180m.

The most active sector for investment was healthcare, with an unusually robust market share of 26.6%, or 17 deals. This is especially noteworthy, as there has been much handwringing about a decline in healthcare. The next most active sector was information technology with 12 deals followed by media with 10 deals, and consumer with nine deals.

The most common types of round were A rounds, with 15 deals, followed by B rounds with 11 deals and C rounds with 10 deals. The most active location was the US, with 40 deals, taking its typical lion’s share of activity. China, France, Israel and Japan all saw three deals.

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