Google leads early stage venture investments

Universities will want to take note of which corporate venturing investors have been most heavily involved in supporting early stage start-ups and innovation, as revealed by Global Corporate Venturing’s analysis of 2013 deal data.

Google Ventures proved to be the leading, early stage corporate venturing investor in during 2013, according to Global Corporate Venturing’s recently published “2013: Full Year Data Analysis”. The report covers 1,068 investment deals worth $19.6bn and 98 exits worth $9.8bn, and shows that Google was most heavily involved in early stage rounds – seed funding and series A – while Intel led the way on series B, C and D rounds. Notably, media/internet companies were also involved more in early stage investments – Bertelsmann, CyberAgent and AOL/Crunchfund – while at the later stages, SAP was prominent. The top three in each round were:

Seed: Google, Bertelsmann and CyberAgent.

A: Google, Qualcomm and AOL.

B: Intel, IDG and Google.

C: Intel, Qualcomm and Comcast.

D: Intel, GE and SAP.

E & Later: SAP, GE and Intel.

Exits (including IPO): Intel and Google, AOL and Cisco.

In total, the report shows that the three most active corporate venturing investors, by number of investments, were Intel (146), Google (78) and Qualcomm (69). These ‘Big 3’ were followed by a large pack of corporate venturing investors, but with deal totals less than half that of Qualcomm. The three largest sectors for corporate venturing deals, counting both investments and exits, were IT (366), Health (189) and Consumer (172), while the three top countries for corporate venturing deals, in terms of target or portfolio company, were USA (766), Japan (48) and Germany (46).

What the “2013: Full Year Data Analysis” report does not fairly reflect, is the activity of incubators and accelerators, both existing and new. In 2013, Microsoft Ventures and Telefónica’s Wayra were amongst the most active, directly sponsored incubators/accelerators for early stage start-ups.

Also worth observing is which emerging, new sectors attracted corporate venturing investment in 2013, and which may be expected to do so in 2014. In no particular order, sectors or business clusters which have attracted investment were: cyber-security, data storage and networking, cloud infrastructure, advertising and marketing technology (including mobile and ‘clicks-for-bricks’ retail technology), e-commerce marketplaces and online platforms (including ‘curated’ marketplaces and home delivery), digital health and health records, wearable computers, databases and big data analytics, video and interactive media, SME enterprise technology tools, travel and transport online platforms, transport technology, education technology, mobile and tablet gaming, power storage and efficiency, retail finance technology, rare and orphan disease therapies, biotechnology, food and agricultural technology, smart home devices and the Internet of Things, solar energy, home/personal services platforms and technology, and social communication.

Some of these new sectors – such as cyber-security – reached a certain state of maturity in 2013, with a spate of IPOs, although cyber-security itself now encompasses a broad range of businesses and approaches. Other sectors saw an acceleration of deals going into the end of 2013 – almost a deal a day in advertising and marketing technology, including deals which did not have corporate venture backing – with clear winners yet to emerge.