In May, we tracked 103 deals involving corporate venturing investors worldwide. The deals were worth an estimated total of $4.71bn. Geographically, the majority were in North America, mostly the US, and Asia. The leading corporate investors in terms of number of deals were Intel, International Data Group and General Electric (GE). However, in terms of dollars invested, the top ranker was Fidelity due to its involvement in the largest deal in the past month – Snapdeal, worth over $1.8bn. However, GE was the leading corporate venturing investor in terms of both number of deals and involvement in large deals.
The sectors most interesting to corporate investors in May were IT, health, financial services and consumer, followed by transport and media.
The May figures compare poorly with previous months. There were fewer deals last month than in all preceding months this year. Deal numbers seem to be following a fairly pronounced downward trend – from 157 in January to 103 in May. The amount of total capital committed by syndicates ($4.71bn) is down considerably compared with the previous month, when it surpassed $11.11bn driven by large deals in the Chinese internet and e-commerce sector. It is, nonetheless, comparable with other months such as February and March this year.
Fewer deals were registered in the month of May 2016 than over the same month last year – 103 vs. 140, respectively. However, the amount of total dollars invested in those deals is within a comparable range and even slightly higher this year – $4.20bn vs. $4.71bn.
The most active corporate investors came from the financial services, IT, health and media sectors. The two most interesting regions to them were North America and Asia, followed by Europe.
Only one deal was above the $1bn mark. Most of the top funding was raised by enterprises from the IT and consumer sector, based primarily in the US and China.
US-based visual messaging platform Snapchat raised $1.8bn in its series F round, according to a regulatory filing. The filing indicated the start of the round stretched back to February 2015, meaning it would incorporate the $538m provided back in 2015 by e-commerce firm Alibaba. The round also included Fidelity, which invested $175m in March 2016, as well as General Atlantic, Sequoia Capital, T. Rowe Price, Lone Pine, Glade Brook, Coatue Management and Institutional Venture Partners (IVP). A total of $1.16bn have been raised since January this year, according to TechCrunch.
US-based software development company Pivotal Software closed a Series C round sized at $653m, according to a regulatory filing. The company had previously cited $253m in its press release. Pivotal announced it had raised $253m in new funding from carmaker Ford, which provided $182m according to Reuters, as well as software producer Microsoft, industrial conglomerate GE, data management firm EMC and EMC-controlled cloud and virtualisation service provider VMWare.
Ant Financial, the payment services affiliate of e-commerce group Alibaba, and internet company Sina Corp have co-led a RMB13.7bn ($260m) series A round for online ticketing platform Taobao Movie, as reported by Reuters. CDH Investments also co-led the round, which valued the unit at $2.1bn. Media companies Bona Film Group, Hehe Pictures, Huace Media and undisclosed other Chinese entertainment companies also took part in the round, according to a regulatory filing. Alibaba acquired a 60% majority stake in TV and film production business ChinaVision Media in 2014 for $805m and shortly thereafter renamed the company Alibaba Pictures. The division’s Taobao Movie unit lets users book tickets for films at more than 5,000 cinemas across China.
US-based Dataminr secured $130m in a series D round led by financial services group Fidelity that also included financial services firm Credit Suisse, as reported by TechCrunch. Fidelity and Credit Suisse, which invested through its Credit Suisse Next Investors subsidiary, were joined by Wellington Management Company, Venrock, Institutional Venture Partners (IVP) and angel investors John Mack, Vikram Pandit, Tom Glocer, Noam Gottesman and Nicolas Berggruen. Founded in 2009, Dataminr’s technology studies content posted on social media platforms like Twitter in real time, sourcing data that can inform it about developing trends or stories.
China-based online fruit and vegetable retailer Benlai Life closed $117m in series C and series C+ funding from investors including kitchen appliance manufacturer Joyoung, as China Money Network reported. Joyoung, which paid $30m for a 3.8% stake in Benlai Life in December 2015 through an unnamed subsidiary, was joined by China Urban Realty Association, ChinaEquity Group, CDH Investments and Integral Group. Benlai Life, which is operated by holding company Kindler’s Information Technology, sells fresh produce to a Chinese customer base through a logistics chain that covers 22 major cities as well as warehouses in Beijing, Shanghai and Guangzhou.
GCV Analytics tracked 12 exits with CVC investors involved during May 2016. The chart below shows the top 5 exiting CVC investors in both number of exits and total dollars of the exit. They came overwhelmingly from the health sector.
US-based gene editing technology developer Intellia Therapeutics floated on Nasdaq in a $108m initial public offering that gave exits to pharmaceutical companies Regeneron and Novartis. Intellia priced 6 million shares at $18 each, at the top of the $16 to $18 range it had set the previous month. It also issued a million additional shares than the 5 million it had previously planned. Founded in 2014 by cellular engineering technology provider Caribou Biosciences, and venture capital firm Atlas Venture, Intellia is working on treatments for conditions including hepatitis B and inborn errors of metabolism, based on Crispr/Cas9 technology.
Reata Pharmaceuticals, a US-based biopharmaceutical company backed by pharmaceutical firms Novo and AbbVie, secured $60.5m in an IPO on Nasdaq. The company issued 5.5 million shares at $11 each. The price was below the $14 to $16 range Reata had set, but the company upped the number of shares from 4 million. Reata plans to put $36m of the proceeds into clinical trials for bardoxolone methyl, a treatment it is developing for pulmonary hypertension, and $15m towards phase 2 trials for omaveloxolone, a candidate to treat diseases including Friedreich’s ataxia, mitochondrial myopathies and metastatic melanoma.
Merus, a Netherlands-based immuno-oncology treatment developer backed by pharmaceutical firms Novo, Novartis, Johnson & Johnson and Pfizer, raised $55m in an IPO in the US. The company issued 5.5 million shares at $10 each, below the $14 to $16 range it set earlier in May, though it raised the number of shares in the offering from 4.3 million. It had initially filed to raise up to $60m back in October 2015. Merus is working on antibody therapeutics to treat cancer, and will use $31m of the IPO proceeds for advancing two of its drug candidates through phase 1 and 2 trials. It also hopes to complete preclinical studies for a third candidate, which will target colorectal cancer.
US-based video distribution service VHX was acquired for an undisclosed amount by video streaming platform Vimeo, providing an exit to corporates including cable service provider Comcast’s corporate venturing arm, Comcast Ventures. The deal also gave exits to talent agency William Morries Endeavor, digital media company Bedrocket Media Ventures, Union Square Ventures, Lerer Hippeau Ventures, Lowercase Capital and assorted angel investors. Founded in 2011, VHX enables independent content creators to sell subscriptions to their videos through the web and mobile apps, and it recently began offering help with establishing a presence on the Apple TV set-top box.
Diversified software producer Adobe Systems acquired US-based content curation company Livefyre for an undisclosed amount, giving an exit to enterprise software provider Salesforce. Founded in 2009, Livefyre has built a platform that enables businesses to access content from social networks that can be streamed alongside their websites, television, advertising and apps. It has 65 million registered users and receives some 400 million unique visitors each month. Adobe intends to integrate Livefyre into its web content management system, Adobe Experience Manager, and across its Adobe Marketing Cloud, making user generated content accessible across all its digital marketing platforms.
There was plenty of fundraising activity in May. We tracked 41 funding initiatives, including VC funds with corporate LP stakes, corporate-backed incubators and accelerator programs, newly launched CVC units etc. that have raised slightly over $3bn of capital. The following table summarises the five leading fundraising initiatives we have tracked.
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Issam Dairanieh, who left corporate venturing unit BP Ventures in April, was appointed CEO at carbon capture research and development organisation Global CO2 Initiative. Dairanieh joined oil and gas company BP in 1998. He had been managing director of BP Ventures since 2011.
Two vice-presidents announced they were leaving Intel during May. Lisa Lambert, a vice-president at Intel Capital, has joined venture capital firm Westly Group as managing partner. Lambert, ranked number one on Global Corporate Venturing’s Rising Stars list in January this year, was managing director of Intel Capital’s software and services fund as well as the $125m capital diversity fund. As managing partner at Westly, Lambert will invest in high-growth software, internet and internet-of-things companies.
Separately, Marcos Battisti, who led the Western Europe and Israel team and was promoted to vice-president in 2014, left the firm saying he expected to decide between alternative offers soon.
Derek Norman took over from Alex Steel as head of Switzerland-based agricultural company Syngenta’s corporate venturing unit. Steel, included in the GCV Powerlist 2014, took over leadership of Syngenta’s corporate venturing unit at the beginning of 2012, having previously been an M&A project leader at Syngenta, where he has worked since 2009.
Merck Global Health Innovation Fund, the corporate venturing subsidiary of US-based pharmaceutical firm Merck & Co, appointed Francesca Domenech Wuttke as a managing director. Wuttke comes from Spain-based pharmaceutical company Almirall, where she led the corporate development strategy team, specialising in M&A deals. She will lead Merck GHI’s Europe-based investments in digital healthcare technology and will be based in Barcelona.
Alexander Schlaepfer is to be an investment director at Swisscom Ventures, the corporate venturing arm of the Switzerland-based telecoms firm. Schlaepfer joined Swisscom Ventures from Aster Capital, a France-based venture capital firm that acts as an investment platform for industrial corporates Alstom, Schneider Electric and Solvay. As part of his role, Schlaepfer led Aster’s investments in renewables, energy storage, industrial IT, data analytics and internet-of-things technology developers.
Qualcomm Ventures, the corporate venturing vehicle for mobile semiconductor maker Qualcomm, promoted Patrick Eggen to managing director for North America. Eggen joined Qualcomm in 2005 and has been Qualcomm Ventures’ lead investor in the San Francisco Bay area, overseeing its early stage fund, which has made more than 60 investments around the world. He is also the main investment lead for the unit’s QPrize and Qualcomm Robotics Accelerator.
Harvard professor and serial entrepreneur Gregory Verdine became a venture partner at WuXi Healthcare Ventures, the corporate venturing arm of China-based pharmaceutical company WuXi PharmaTech. Verdine has developed new therapeutics called stapled peptides. They are undergoing clinical development and are being advanced to treat conditions thought to be “undruggable”.
US-based messaging platform Slack Technologies hired Jason Spinell as an investor for its corporate venturing unit, Slack Fund. Slack formed the $80m fund last December, committing $40m and securing the rest from its investor base. It will invest in startups developing technology compatible with the company’s platform. Spinell was previously ventures director for Undercurrent, a New York-headquartered digitally-focused consulting firm, until it closed in August 2015.
Bernhard Gold has left T-Venture, a corporate venturing subsidiary of telecoms firm Deutsche Telekom, to join France-based venture capital firm Iris Capital as managing director of its North American office. Gold has been appointed partner at Iris and will run Iris Capital North America. He had been a managing director of T-Venture of America since early 2014, having been promoted after three years as an investment director.
Funds raised in May 2016
Fund – Location – Amount ($m) – Corporate backers
Lenovo Capital – China – 500 – Lenovo
Geodesic Capital Fund I – US – 335 – Mitsubishi Corp, Nikon, Mitsubishi Heavy Industries, Bank of Tokyo, Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking Corp, Sompo Japan Nipponkoa Insurance, Toho Bank, Sumitomo Mitsui Banking Corp
VenBio’s Global Strategic Fund II – US – 315 – Amgen, Merck, Baxalta, undisclosed strategic investors
Meridian Capital China Fund V – China – 305 – Shanghai United Media Group, Oriza Holdings
E.Ventures growth-stage fund – Germany – 290 – Otto Group
Top five deals May 2016
Portfolio company – Location Sector – Round – Size – Investors
Snapchat – US – IT – E and beyond – $1,800m – Coatue | Fidelity | General Atlantic | Glade Brook Capital | Institutional Venture Partners | Lone Pine | Sequoia Capital | T Rowe Price
Pivotal – US – IT – C – $653m – EMC | Ford Motor | General Electric | Microsoft | VMWare
Taobao Movie – China – Consumer – A – $260m – Ant Financial | Bona Film Group | CDH Investments | Hehe Pictures | Huace Media | Sina | undisclosed
Dataminr – US – IT – D – $130m – Credit Suisse | Fidelity | Institutional Venture Partners | VenRock | Wellington Management | angel investors
Benlai Life – China – Consumer – C – $117m – CDH Investments | China Equity Group | China Urban Realty Association | Integral Group | Joyoung
Portfolio company – Location – Sector – Exit size – Investors
Intellia Therapeutics – US – Health – $108m – Atlas Venture | Caribou Biosciences | EcoR1 Capital | Fidelity | Foresite Capital | Janus Capital Group | Novartis | OrbiMed | Regeneron Pharmaceuticals | Sectoral Asset Management
Reata Pharmaceuticals – US – Health – $61m – AbbVie | Novo
Merus – Netherlands – Health – $55m – Bay City Capital | Dutch Aglaia BioMedical Ventures | Johnson & Johnson | Life Sciences Partners | Novartis | Novo | Pfizer | Sofinnova Partners
VHX – US – Media – Undisclosed – Bedrocket Media Ventures | Comcast | Lerer Hippeau | Lowercase Capital | Union Square Ventures | Vimeo | William Morris Endeavor | angel investors
Livefyre – US – IT – Undisclosed – Adobe | Cue Ball | ff Venture Capital | Greycroft Partners | Hillsven | Salesforce | US Venture Partners | Zelkova Ventures
