Analysis: Corporate venturing continues to grow, at least in deal volume

According to PitchBook Data, premier provider of private capital market data, overall venture capital activity globally has been plateauing over the past few years with some relatively minor fluctuations – dropping 5% from 22,801 deals in 2018 to 21,714 by the end of 2019. The numbers of the corporate VC realm, in comparison, appear to have remained unaffected on their upward trajectory, staying well above the 2,000 transactions mark since 2015 and even surpassing 3,200 last year. The overall share of corporate venturing activity out of all VC activity has gone up significantly from 8% in 2011 to 15% in 2019. This is a result of a growing number of corporates taking minority stakes in deals, as our data suggest.

The story is, however, somewhat different in terms of the dollar amounts involved in corporate-backed rounds. Data from both PitchBook and GCV Analytics suggest that total capital in corporate-backed rounds grew at similar pace along with total capital in all venture rounds over the last decade. Both reached a peak in 2018 and went down last year. The drop is attributable mostly to a reported sharp reduction in China, where total venture money plummeted by more than 50% from $112bn down to $50bn last year, according to the Times of India.