In the first part of our look at 2021's corporate venturing trends, we examine the growth in funding, IPOs and SPAC mergers, a big year for M&A and the emergence of CVC in new sectors.

This time last year we were commenting on what a strange 12 months 2020 had been and 2021 did not prove much different, as money continued to flow into the space while exits increased and the digitisation process hastened by covid-2019 intensified.



2020 was a bumper year for corporate venture capital (CVC), setting records for overall VC funding as well as CVC-backed deals, but 2021 blew it out the water.

Global Corporate Venturing had tracked $283bn raised in corporate backed rounds as of December 21, more than doubling the $131bn secured through similar rounds in 2020.

Some of the largest individual rounds took place in the transport space, which in the wake of the massive increase in Tesla’s share price has moved from ride hailing to focusing on the vehicles themselves along with related technology.

Electric truck developer Rivian pulled in a total of $5.15bn by itself, taking $2.65bn in a January round backed by Amazon’s Climate Pledge Fund at a $27.6bn valuation, before Amazon and Ford Motor Company co-led a $2.5bn round six months later.

The largest individual round was closed by autonomous driving technology developer Cruise, which completed a $2.75bn round in April, adding $750m at a $30bn valuation from investors including big-box retailer Walmart to a $2bn first tranche backed by software provider Microsoft and automotive manufacturers Honda and General Motors.

Apart from TikTok owner ByteDance, which last raised cash in 2020 at a reported $140bn valuation, the most highly valued CVC-backed private companies are spacecraft producer SpaceX, which snapped up $850m in February at a $74bn valuation that reached $100bn through secondary sales by October, and digital payment technology producer Stripe, which received $600m in a March round featuring insurers Axa and Allianz valuing it at $95bn.



Public market exits also soared in 2021, rising from 1,028 in 2020 to 1,126 in the first half of 2021 alone according to Pitchbook data, rounding off at just over 2,000 by year’s end.

Rivian again topped the list, pulling in a massive $11.9bn last month in an initial public offering that was the largest for a VC-backed tech company since Alibaba in 2014 and the biggest for a US-based tech company since Facebook back in 2012. Its share price rocketed to over $171 in the aftermath of the IPO and currently sits at over $100, giving it a market capitalisation of nearly $89bn.

The year also marked an influx of US IPOs for Asian companies. China-based video streaming platform operator Kuaishou secured $5.4bn in a February offering and South Korea-headquartered e-commerce marketplace Coupang’s March IPO generated $4.55bn while China-based ride hailing service Didi raised $4.4bn in a June offering.

Telecommunications and internet group SoftBank, by some distance the largest CVC investor in recent years, was an investor in both Coupang and Didi pre-IPO, and sold almost $1.7bn of shares in Coupang in September. It had invested a total of $3bn and owned a 39.4% stake prior to the flotation.

Internet and gaming group Tencent had meanwhile backed Kuaishou and Didi, in addition to Brazil-based digital bank NuBank, which went public earlier this month in a $2.6bn IPO.

The number of IPOs peaked in the first three months of the year and have fallen since, but it is significant that the number for each quarter outstripped that of any quarter in 2020.

One prediction that did not come to pass was that direct listings could finally emerge as a viable alternative to traditional flotations. There were a few notable exceptions – gaming platform developer Roblox, digital currency exchange Coinbase and cross-border money transfer service Wise – but they were generally market leaders in edge sectors and their stock was in high demand either way.


Reverse mergers

Reverse takeovers however did emerge as a rival to the IPO, and the number of mergers with special purpose acquisition companies (SPACs) increased from 66 in 2020 to 204 this year, with the amount of cash allocated through accompanying private placements soaring from $17.2bn to $60.5bn in the process.

The largest deals in the space included electric vehicle developer Lucid, which achieved a $24bn valuation in February; self-driving software developer Aurora, which joined forces with a SPAC in a July deal valuing it at $13bn; and SoFi, an online financial services provider backed by SoftBank and social media company Renren, which listed in January at an $8.65bn valuation.

Biggest of all was Grab, the Southeast Asian mobility and financial services provider that had raised $8.3bn in pre-IPO funding from an investor base featuring more than a dozen corporates. It merged with a publicly listed SPAC in an April transaction valuing it at $39.6bn.

The charge in reverse mergers had been fuelled by an especially active period of flotations for SPACs which began in the second half of 2020 and carried on into this year, though the subsequent fall in IPOs for the vehicles preceded a similar drop in reverse takeovers, and it looks likely this will continue into 2022.



Not that public listings were the only route to exits for corporate investors in 2021 – the M&A market for pre-IPO companies was also extremely busy.

The biggest such deal for a CVC-backed private company announced over the course of the year took place in May when two of Southeast Asia’s largest tech companies – on-demand ride provider Gojek and online marketplace Tokopedia – joined forces to form a new business called GoTo at an $18bn valuation.

DoorDash’s November all-share acquisition of consumer goods delivery service Wolt valued it at $8.1bn, providing an exit for Naspers-backed internet group Prosus, while CVC vehicles Salesforce Ventures, NTT Docomo Ventures, DTCP and Telstra Ventures exited identity verification software provider Auth0 in a $6.5bn all-stock purchase by Okta.

Medical data exchange Datavant merged with healthcare data software producer Ciox Health at a $7bn valuation in June while the largest acquisition by an existing corporate investor involved Coca-Cola paying $5.6bn for the 85% of sports drink producer BodyArmor it did not already own.

It is a curious fact that while pre-IPO valuations for financial and health technology providers have continued to rise in 2021, share prices for publicly-listed companies in those sectors have been far more volatile. This points to M&A as a potentially more inviting route to exit for corporate investors in 2022.


New CVCs

One concern in early 2020 was that the coronavirus-fuelled financial crisis could lead to a drop off in CVC investing as corporate parents in traditional markets looked to keep a stronger handle on outgoing capital.

The decline never came to pass, but what is interesting is that many of the most active new entrants into corporate venturing were from digital first industries, indicating the traditional image of CVC – an out-of-touch incumbent business relying on strategic investments to access cutting-edge technology – no longer applies.

This could be seen most fervently in the digital currency space, where players such as crypto trading platforms Coinbase and Binance, blockchain app publishers Animoca Brands and Dapper Labs, and trading firms Alameda Research and CMT emerged as some of the biggest backers of the year’s crypto startup boom (which we’ll get into in greater detail tomorrow).

Interestingly, it is also an area where corporates are willing to collaborate. Blockchain platform developer Solana teamed up with digital currency exchange FTX and VC firm Lightspeed Venture Partners on a $100m fund in November while Animoca Brands and Binance Smart Chain are each contributing half of a $200m vehicle which will fund gaming finance projects.

Enterprise software also saw several new figures emerge. Snowflake Ventures made a dozen investments over the course of 2021 while Twilio, HubSpot and Zoom all launched CVC vehicles in the second half of the year, backing a total of 40 deals between them this year.

Another busy area was online food delivery, with Delivery Hero leading the way in large-scale rounds for Gorillas, Glovo and Facily. Zomato went public in July, and by November it had committed a total of $175m to three India-based companies on the way to a targeted $1bn of CVC commitments by the end of 2023. It’s going to be interesting to see if the likes of Deliveroo and Instacart follow suit next year.


Continue reading Part Two of CVC in 2021: The Trends

Robert Lavine

Robert Lavine is special features editor for Global Venturing.