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Global Corporate Venturing

Quarterly data analysis

Q3 Q4 2013

Q2 Q1

l most active l Sequoia busiest VC partner l Deals decline Q3 Q4 2013

Q2 Q1 Analysis Quarter shows deal decline

Quarterly activity by number of deals There were 222 in corporate venturing-backed companies worth $4bn in the first quarter. This compared Q1 Q2 Q3 Q4 2011 with 231 investments in the fourth quarter of 2012 worth $3.6bn, and 249 investments worth $5.2bn in the first quarter 2012 of 2012. 2013 There were 22 exits worth $1.4bn, compared with 34 exits worth $6.3bn in the fourth quarter of 2012 and 249 invest- 0 200 400 600 800 1000 1200 ments worth $5.1bn in the first quarter of 2011. Quarterly investment activity by value ($bn) Asian activity at 28 deals is approaching the 37 deals in Europe, although the US continues to be the main area of Q1 Q2 Q3 Q4 2011 activity with 146 deals. There were three deals in each of the 2012 Middle East, South America and eastern Europe. Information technology was the most active sector with 51 2013 deals, followed by consumer with 46. Healthcare and serv- 0 5 10 15 20 25 30 ices were next most active, with 35 and 34 deals respectively. Clean-tech and energy deals are languishing, with only nine Quarterly exit activity by number of deals deals tracked during the quarter. Q1 Q2 Q3 Q4 2011 Asian activity is particularly strong in the consumer sector, with 10 deals. Europe also had 10 consumer deals. In the 2012 media and services sectors Asia is ahead of Europe in terms of activity. North America was the most active location for all 2013 activity. Media investments were the most popular at seed 0 30 60 90 120 150 stage. Quarterly exit activity by value ($bn) The US was even more dominant in exit activity than in terms of investments, accounting for 82.6% of exits. The Q1 Q2 Q3 Q4 2011 most active sector for exits was IT. The most common type of deal was A round (46). There

Includes $18.4bn IPO 2012 were also 45 each of B rounds and individual stake pur- chases. There were 18 C rounds, 17 D rounds and 7 E 2013 rounds and beyond, as well as 14 seed deals. 0 5 10 15 20 25 30 35 40 Consumer and services activity was particularly marked at Deal data is global. It tracks all rounds where there are minority investments in entrepreneurial companies by corporations Exit data tracks money raised from the public markets, trade sales, and stake sales an early stage, making up many A and B rounds. n

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Global Corporate Venturing April 2013 9 Q3 Q4 2013

Q2 Q1 Analysis Global corporate venturing activity last quarter

Denmark 1 Finland 1 UK 9 Estonia 1 Canada 4 Ireland 1 Germany 13 France 3 Austria 2 Russia 3 US 143 Switzerland 4 Spain 1 Turkey 1 South Korea 1 Israel 3 China 6 Japan 9 Taiwan 2 India 8

Singapore 2 Brazil 3 Clean-tech Stake Consumer purchase Seed Undisclosed Health M&A Australia 1 E round Industrial and beyond IT A round Media D round Services C round Transport B round Utilities 360Buy in biggest deal

The largest deal of the quarter was the $700m round of also included firm Iconiq Capital, which funding for China-based e-commerce site manages money on behalf of social network Facebook’s 360Buy, as eye-catchingly large Asia deals continue to co-founder . A further $350m was raised be a staple of our coverage. This e-commerce company in debt from a syndicate including JPMorgan, Bank of secured quasi-corporate venturing backing – investors America Merrill Lynch, and SunTrust included corporate-backed Digital Sky Technologies (DST) Bank. The proceeds from the debt will also be used to buy and investment manager Tiger Global Management. shares from employees and shareholders as well as retire Other backers of the round were Ontario Teachers’ SurveyMonkey’s existing debt. Retirement Fund, a Canadian state-backed investment The third-largest deal was the $200m raised by Pinter- fund, along with new investor Kingdom Holdings, founded est, a US-based online scrapbooking website backed by by Saudi Arabia’s Prince Alwaleed Bin Talal Alsaud, Japan-based e-commerce company Rakuten, at a com- This round followed a $400m series D round in Decem- pany valuation of $2.5bn. Social media continues to be ber, which included Tiger Global Management. That round a source of eyecatching deals, with social messaging of financing valued the company, also known as Jingdong service reportedly brokering a deal for mutual fund Mall, at $7.3bn. 360Buy has now raised $2.3bn since manager BlackRock to buy up to $80m of shares from 2007. Earlier investors include Capital Today, Bull Capital, its employees at a $9bn valuation. If enough employees Pak-to Leung, DST and Tiger Fund. accept the tender offer to hit the $80m limit, BlackRock The next biggest round was the $444m raised by US- will own just less than 1% of Twitter, according to news based questionnaire company SurveyMonkey. Early provider Financial Times. investors sold stakes, secured a valuation of $1.35bn for a Hedge fund Valiant Capital Management, which has also consortium including search engine provider . backed and Evernote, led the latest round as a David Goldberg, chief executive of SurveyMonkey, and new investor. The consortium also included Rakuten and Tiger Global Management co-led the transaction, which venture captial firms Andreessen Horowitz, Bessemer

Global Corporate Venturing April 2013 10 Q3 Q4 2013

Q2 Q1 Analysis

Venture Partners and FirstMark Capital as well as angel LivingSocial, a US-based discount coupon provider backed investors. In May last year, Rakuten led a $100m invest- by online retailer Amazon, raised $110m from a group of exist- ment in Pinterest, according to a regulatory filing, as part ing investors. News provider Fortune said Amazon invested of a strategic partnership with Pinterest to help it expand in the latest round and refers readers to LivingSocial’s Dela- in Japan and Rakuten’s 17 other markets (see feature on ware filing with details on the round’s terms. consumer sector). Nest Labs, a US-based maker of thermostats, reportedly Other big deals included the A$170m ($180m) raised by raised $80m from a consortium led by Google Ventures at Mesoblast, an Australia-listed regenerative medicine com- an $800m valuation, according to news provider GigaOm. pany, in a private placement of shares including to “exist- On Deck, a US-based small business loans company, ing strategic investors”, and Partners Group, a Switzer- raised $42m in its series D round, to take its total since land-based private equity firm, paying $130m for 30% of launch to $80m, from a consortium including SAP Ven- Softonic, an online software guide to media content incu- tures, the corporate venturing unit of the Germany-based bated by Grupo Intercom, a Spain-based -focused software provider. conglomerate. Other deals not in the top 10 included Warby Parker, a Truphone, a UK-based mobile network backed by media spectacles retailer, which raised $41.5m from a consor- groups Independent News & Media and Hubert Burda tium including credit card company venturing unit Amex Digital Ventures, the venturing unit of the Germany-based Ventures, and Sungevity, a US-based residential solar media group, now spun off, raised £75m ($118m) primarily business that raised $40m in D round equity from back- from Roman Abramovich, owner of Russia-based oil major ers including home improvement retailer Lowe’s as part of Sibneft. $125m raised through equity and project financing. n Intel, Google most active

The two big corporate venturing units of Intel and Google Most active corporate venturers Q1 both had busy quarters, while German-based firms and Investments Exits financial institution-backed corporate venturing units were Intel 15 1 also busy. Google 12 3 Intel Capital, the corporate venturing unit of the US- Qualcomm 11 2 based chipmaker, was the most active unit, in line with its Norwest Venture Partners ( unit) 8 0 High-Tech Gruenderfonds 6 0 status as the largest corporate venturing unit globally, hav- Bertelsmann 5 0 ing invested more than $10bn in its history JPMorgan 4 1 Ten of Intel Capital’s deals were in technology, including SAP 4 1 participation in the $30m D round of US-based data analyt- AOL 4 0 ics company Guavus and the $20m round of semiconductor Samsung 4 0 4 0 company Invisage Technologies. Following a cross-sectoral Conde Nast 4 0 approach designed to fuel markets to strengthen demand Cisco 3 1 for semiconductors, the unit backed a typically varied range Paypal 3 1 of deals, including the latest round of Ireland-based wireless Correction: An earlier version of this table omitted Qualcomm network company Altobridge, the $5.8m B round for vacuum robot company Persimmon Technologies and the $15m B seed round of video chat company Rabbit, the $21.6m B round for social media management company Sprinklr. round of social media company NextDoor, as well as an Intel Capital also was alongside a number of corporates exit from social TV service Miso, which was sold to Dijit in the syndicate backing mobile banking and payment Media, a US-based maker of the NextGuide iPad applica- solutions company Mfoundry, which was sold to banking tion for television. and payments technology company Fidelity National Infor- Google itself took part in one of the largest corporate mation Services for $165m. venturing deals of the quarter, the $444m round raised by Intel Capital’s deals varied from early to late stage, with questionnaire company SurveyMonkey. two A rounds, four B rounds, three D rounds, five stake Google Ventures’ deals were also varied, including the purchases and one portfolio company acquisition. exit through an $80m from smart grid The next most active was Google Ventures, including networking company Silver Spring Networks. Other Google support for the $5.7m spin-out of About.me from AOL, the Ventures’ deals included the $80m B round for heating

Global Corporate Venturing April 2013 11 Q3 Q4 2013

Q2 Q1 Analysis company Nest, and an $8m round backing oncology data number of portfolio companies of feted Germany-based platform FlatIron Health – one of a number of deals the incubator Rocket Internet that JPMorgan backed last year. group has made backing healthcare data companies. US-based payments company PayPal’s deals included German firms are active, with the corporate venturing the Mfoundry sale mentioned above, the $21.5m B round units of Germany-based media company Bertelsmann, raised by bill payments company BillFloat Germany-based software company SAP and Germany- South Korea-based industrial conglomerate Samsung based corporate-backed state venture fund High-Tech was the only Asian corporate in the top 10 for activity, Gruenderfonds which was also the most active multicor- with deals including the $22.5m E round raised by online porate fund in the top 10. advertising company OpenX and the $31m round raised Of the most active companies, exit winners included US- by mobile security company Fixmo. based IT company Cisco, which was one of the corporates The corporate venturing unit of chipmaker Qualcomm’s backing Tensilica, which was sold for $380m to US-based deals included the $85m sale of UK-based location-aware chip design software manufacturer Cadence Design Sys- software company Arieso to JDSU, while it also backed tems (see report). the C round of media company Verve Mobile, and the Financial companies were active in the quarter. The $14m G round of US-based provider of online answers to busiest corporate venturing unit of a bank was Wells Far- questions company ChaCha, among other deals. go’s Norwest Venture Partners. Three of Norwest’s deals Media company Conde Nast continues to make a big were in healthcare, with it backing the $30m round of US- corporate venturing push into the consumer sector, includ- based ear, nose and throat treatment company Intersect, ing the $20m round raised by fashion company FarFetch the $11m round of India-based cancer detection company and the $4.4m series C extension raised by fashion hire Perfint Healthcare and the $4m round of India-based radi- company Rent the Runway, taking that round to $24.4m. ology diagnostics company Nueclear Healthcare. The Rent the Runway deal was also joined by financial The group’s largest investment tracked by Global Cor- services firm , which is also pushing in porate Venturing during the quarter was the $50m round the consumer sector, helping spectacles retailer Warby raised by FireEye, the US-based provider of cyber attack Parker raise $41.5m. protection, which was also joined by banks Goldman Technology company AOL’s deals in the quarter included Sachs and Bank – at the same time as Fire- AOL Ventures backing the $19m B round of big data com- Eye has been linked to an initial public offering. pany Sailthru, and the $12m round raised by the US-based JPMorgan, the next most active bank, was involved in mobile application problem solver Crittercism. consumer-based portfolio company Zalora raising $25m US-based entertainment company Comcast sealed from Tengelmann Ventures, the corporate venturing unit deals including the $35m round backing US-based home of the Germany-based corporate. Zalora was one of a renovation company Houzz. n Sequoia keeps busiest

Sequoia Capital was the venture Most active VCs Tutor­Vista also received backing capital firm (VC) most active along- from corporate venturing investor side corporates in the first quarter. with corporates in Q1 Manipal Education and Medical It was in the syndicate backing Investments Exits Group. In Nimbula, Sequoia was Xoom, which raised $101m in its Sequoia Capital 9 3 a syndicate partner of technology initial public offering, at a market Caufield & Byers 8 1 company VMWare, and the busi- capitalisation of $509m, as was Khosla Ventures 6 1 ness was sold to US-based tech- SVB Capital, the private equity Accel Partners 5 1 nology company Oracle. division of Silicon Valley Bank. First Round Capital 5 0 Sequoia was an investor in the Sequoia’s other two exits along- 500 Startups 5 0 $35m C round for US-based home Index Ventures 5 0 side corporates were India-based refurbishment company Houzz Lightspeed Venture Partners 4 3 education provider TutorVista DAG Ventures 4 2 alongside Comcast Ventures, the Global, and cloud infrastructure Bessemer Venture Partners 4 0 corporate venturing unit of the US- management company Nimbula. based entertainment business. TutorVista was entirely sold to Sequoia’s syndicate part- Sequoia also backed the $20m round for US-based ner, education company Pearson, for an undisclosed sum. social lending website Prosper, joining a syndicate with

Global Corporate Venturing April 2013 12 Q3 Q4 2013

Q2 Q1 Analysis financial company CompuCredit. In the $17.7m series C round of real-time security analytics business Click Security, Sequoia partnered Citi Ventures, the corpo- Corporate venturing rate venturing unit of the US-based bank. Three of Sequoia’s deals with corporates were finan- cial, although like many of the most active VCs, IT was its most active sector with corporates. participants near 1,000 Sequoia was closely followed in the most active cor- porate partner rankings by venture firm Kleiner Perkins The number of corporate Where corporate Caufield & Byers, which was one of the syndicate in venturing units, tracked US-based smart-grid company Silver Spring Networks, by Global Corporate Ven- venturing units are which raised $80.75m in its initial public offering. Kleiner turing, has now risen to based worldwide was alongside Japan-based technology group Hitachi, 971. Australia 10 US peer EMC and Google Ventures, the corporate ven- Perhaps most interest- Austria 3 turing unit of the search engine. ingly, the number of units Belgium 9 Kleiner was one of the backers of the $80m B round in China at 52 is now only Bermuda 1 raised by heating start-up Nest, alongside US-based tech- one shy of Germany at Brazil 3 nology company InterTrust and Google Ventures. Kleiner 53. Japan is second in Canada 25 was another member of the Houzz syndicate, mentioned terms of the number of Chile 1 above in respect of Sequoia, while it also invested in two units, with 87. China 52 companies that secured strategic backing, US and Can- This is symptomatic of Denmark 10 ada-based mobile risk management company Fixmo, and the wider trend of cor- Dubai 2 Puppet Labs, which received $30m from US-based tech- porate venturing in Asia Estonia 1 nology company VMWare in a strategic partnership. In catching up with devel- Finland 5 France 42 Fixmo, Kleiner is in a syndicate with Samsung Ventures, oped economies, which Germany 53 which invested an undisclosed sum as part of a strategic have generally invested Hong Kong 1 tie-up, and Motorola Solutions Venture Capital. in corporate venturing India 31 Khosla Ventures was the third most active VC with for longer. Last year Asia Ireland 6 corporates, and partnered US-based technology com- overtook Europe and the Israel 13 pany in the $75m round raised by Appnexus, US as the fastest grow- Italy 13 and SAP Ventures in the $42m series D round raised by ing region for the first Japan 87 On Deck, a US-based small business loans company. time, although so far in Korea 2 Accel Partners partnered Samsung Venture Invest- 2013 the trend has been Kuwait 3 ment Corporation and SAP Ventures in the $22.5m less pronounced. Luxembourg 1 E round raised by OpenX Software, a US-based provider As corporate ventur- Malaysia 3 Mexico 4 of advertising revenue products and services. Accel also ing has boomed, the Netherlands 16 invested in the $13.6m extension of US-based clothing most mature market, the New Zealand 2 retailer Bonobos’ latest $30m round, in which it invested US, has risen to nearly Norway 10 alongside retailer Nordstrom. It was also in the Prosper 400 units. The UK has Poland 1 syndicate mentioned in respect of Sequoia. 62 units, Germany has Qatar 1 In a telling sign of the growing importance of early- 53, France has 42, while Russia 13 stage firms, two of the most active firms with corpo- India has 31. Saudi Arabia 6 rates were First Round and 500 Startups, which are There were 21 new Singapore 5 best know for investing in A rounds and seed rounds entrants in 2013 – the South Africa 4 respectively. industry has welcomed South Korea 9 First Round was in the AppNexus and On Deck syn- at least 210 new entrants Spain 11 Sweden 7 dicates mentioned in respect of Khosla, as well as the since the beginning of Switzerland 25 OpenX round mentioned above. First Round was also 2010. Taiwan 18 a backer of US-based micro-credit provider BillFloat, The fastest-growing Thailand 2 which raised a $21m B round, in a syndicate alongside sector since the begin- Turkey 1 EBay’s payments subsidiary PayPal. ning of 2012 is media, UK 62 500 Startups was joined by Motorola Solutions Ven- followed by industrial. United Arab Emirates 1 ture Capital and Opt, a Japan-based digital advertising New entrants in IT have US 396 agency, backing Retailigence, a US-based local mar- dropped – it was the keting and e-commerce service, which raised $6.3m in most actively growing sector in 2010 and 2011. its series B round.

Global Corporate Venturing April 2013 13 Q3 Q4 2013

Q2 Q1 Analysis

Largest corporate venturing investments in Q1 Company Sector Round Round Venture participants size ($m) 360Buy Consumer E and beyond 700 Digital Sky Technologies, Tiger Global Management, Kingdom Holdings, Ontario Teachers’ Pension Plan Board, Capital Today, Bull Capital SurveyMonkey Media Stake purchase 444 Google, TPG, Tiger Global Management, Bain Capital Ventures, Social & Capital Partners, Iconiq Capital, Laurel Crown Partners, Spectrum Equity Investors Pinterest Media D 200 Rakuten Group, Andreessen Horowitz, Valiant Capital, Firstmark Capital, Bessemer, angels Mesoblast Health Stake purchase 150 Teva Pharmaceutical Industries, undisclosed strategic Softonic IT Stake purchase 130 Grupo Intercom, Partners Group, Digital River, Bonsai Venture Capital, Espiga Truphone Utilities Stake purchase 118 Independent News & Media, Hubert Burda Media, Roman Abramovich, Eden Ventures, Wellington Partners, Vollin Holdings LivingSocial Consumer Stake purchase 110 Amazon, T Rowe Price, Revolution, US Venture Partners, Institutional Venture Partners, Grotech Ventures Twitter Media E and beyond 80 BlackRock Private Equity Partners Nest Labs Clean-tech B 80 Google Ventures, Intertrust Technologies, Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, Shasta Ventures, Generation Investment Management On Deck Financial D 42 SAP Ventures, RRE Ventures, Institutional Venture Partners, Khosla services Ventures, Contour Venture Partners, SF Capital, Village Ventures, First Round Capital, Lighthouse Capital Partners

Largest corporate venturing exits in Q1 Company Sector Round Round Venture participants size ($m) Tensilica IT Exit 380 , Fujitsu, NTT, Matsushita, Foundation Capital, Meritech Capital, Oak Investment Partners, Worldview Technology Partners, Conexant Systems, Altera Mfoundry Financial Exit 165 Fidelity Information Services, PayPal, Motorola Mobility, NCR, services Mastercard, Intel, Apax, Ignition Partners Skyfire IT Exit 155 Verizon, Lightspeed Venture Partners, Matrix Partners, Trinity Ventures Marin Software IT IPO 108 SAP, DAG Ventures, Crosslink Capital, Benchmark, Triangle Peak Partners, Focus Ventures, Amicus Capital Xoom Financial IPO 101 SVB Capital, T Rowe Price, Sequoia, New Enterprise Associates, services Fidelity Ventures, DAG Ventures Arieso IT Exit 85 Qualcomm Ventures, Carbon Trust, Oxford Capital Partners, Add Partners, Top Technology Silver Spring Clean-tech IPO 80.8 Google, Hitachi, Northgate Capital, Kleiner Perkins Caufield & Byers, Networks Boldt, GSV Capital, Foundation Capital Kalobios Health IPO 70 Mitsubishi UFJ Capital, Genzyme Ventures, MPM Capital, Sofinnova Partners, Alloy Ventures, , GBS Venture Partners, Development Bank of Japan, 5AM Ventures, Bio*One Capital LipoScience Health IPO 45 GE Capital Equity, Agilent Technologies, Piper Jaffray, Invesco Private Capital Group, Pappas Ventures, SightLine Partners, Camden Partners Baxano Health Exit 23.6 Kaiser Permanente Ventures, Prospect Venture Partners, CMEA Capital, Affinity Capital Management, Three Arch Partners, Kearny Venture Partners

Global Corporate Venturing April 2013 14 Q3 Q4 2013

Q2 Q1 Analysis

500 Startups was also an investor in Life360, a US-based pany Opera Software for up to $155m. provider of safety applications, which raised an undisclosed DAG Ventures was a backer of Xoom, OpenX and Right- amount from Germany-based car maker BMW’s corpo- Scale, all mentioned above. It was also alongside SAP rate venturing unit, I Ventures, as well as in Samba Ads, a Ventures in the syndicate for US-based marketing soft- Brazil-based online video advertising network, which raised ware company Marin Software, which raised $108m in its $500,000 from four investors, including Brazil-based Grupo initial public offering. RBS’s holding company, E.Bricks Digital. DAG was also alongside Nextdoor, a US-based private Index Ventures was the only non-US firm in the top 10, social network for neighbourhoods, which raised $21.6m in its alongside corporates, reflecting its growing reputation as series B round from a consortium including Google Ventures. one of the hottest European venture firms. Index was in the Bessemer invested with Japan-based e-commerce com- OpenX syndicate and was a backer of the $20m round raised pany Rakuten in the $200m round raised by social network by fashion retailer FarFetch, which was led by publisher Pinterest. It was also a backer of Life360, mentioned above, Condé Nast International. Index was also in a syndicate as well as Intel Capital-backed Apperian and Discoverly, a alongside Presidio Ventures, the corporate venturing unit of US-based social enterprise tool developer, which raised Japan-based conglomerate Sumitomo, backing RightScale, $750,000 in its seed round from a consortium including a US-based provider of enterprise cloud management serv- enterprise software-as-a-service provider Salesforce. ices, which raised $15.6m in its series D round. Andreessen Horowitz was also a backer of Pinter- Lightspeed Venture Partners was in the syndicates back- est, and invested alongside the Junos Innovation Fund, ing Nest Labs, Bonobos, Click Security and TutorVista, all a venture fund run by the Juniper Venture Investments, mentioned above. It was also a backer of Verizon-backed the corporate venturing vehicle for the US based network Skyfire Labs, a US-based mobile video optimisation com- equipment company, in the $8m series A for cloud security pany, which was sold to Norway-based technology com- start-up Illumio. n Tensilica is lucrative exit

US-based chip design software a robust rebound in the public manufacturer Tensilica, backed markets. by Japan technology companies The second-biggest exit of the Fujitsu and NTT, and US-based quarter was the $165m sale of technology company Cisco, was Mfoundry, a mobile banking and the biggest sale of the quarter, in payment solutions provider for an exit to US-based chip design financial institutions and retail- software manufacturer Cadence ers, to Fidelity National Infor- Design Systems for $380m. mation Services (FIS), a bank- In 2010 Japan-based electron- ing and payments technologies ics company Fujitsu used its cor- company, which acquired the porate venturing fund to make remaining 78% stake it did not a strategic investment of undis- already own. Mfoundry’s back- closed size in Tensilica. The ers included corporates PayPal A Tensilica baseband engine previous year, Japan’s national and NCR Corp. phone operator NTT made a similar strategic investment The sale of Skyfire Labs, a US-based mobile video opti- through its Docomo Capital corporate venturing fund. misation company, for up to $155m,to Opera Software, a Other backers of the company included US-based logic Norway-based technology company spun out of Telenor device company Altera, semiconductor company Conex- in 1995, provided an exit for US-based telecommunica- ant Systems, Japan-based electronics company Pana- tions company Verizon. Skyfire had raised about $40m. In sonic (formerly Matsushita Electric Industrial) and Japan- January last year, Verizon’s corporate venturing unit led based technology company NEC. Skyfire’s $8m funding round. The biggest initial public offering (IPO) of the quarter was Xoom, a US-based money transfer service backed by the $108m raised by US-based marketing software com- SVB Capital, the corporate venturing unit of Silicon Val- pany Marin Software. The company’s backers included ley Bank, and Volition Capital (formerly Fidelity Ventures, SAP Ventures. Half the top 10 deals were IPOs, reflecting a corporate venturing division of financial services cor-

Global Corporate Venturing April 2013 15 Q3 Q4 2013

Q2 Q1 Analysis poration , before its spin-off) raised KaloBios Pharmaceuticals, a developer of monoclonal $101m in its Nasdaq flotation. antibody therapeutics for cancers and respiratory diseases Arieso, a UK-based provider of location-aware software backed by corporate venturing units Genzyme Ventures for mobile carriers backed by chip maker Qualcomm’s cor- and Mitsubishi UFJ Capital, raised around $70m in its IPO. porate venturing unit, was sold to JDSU, a Nasdaq-listed US-based medical diagnostics company LipoScience, networks company, for $85m. A report by news provider previously backed by corporates including , PE Hub said it was a 4.7-times return for investors. raised $45m in its IPO. One of the largest shareholders in Silver Spring Networks, a US-based smart grid network- LipoScience is Agilent Technologies, which holds 5.8%. ing company backed by Japan-based technology group Also sold was Baxano, a US-based developer of spinal Hitachi, US peer EMC and Google Ventures, the corpo- devices backed by healthcare provider Kaiser Perma- rate venturing unit of the search engine, sold 4.75 million nente’s corporate venturing unit. TranS1, a Nasdaq-listed shares at $17 each to raise $80.75m. medical device maker, is paying $23.6m. n

Corporate fundraising Corporate Amount raised ($m) Fund GE 150 pa GE Ventures Nokia 250 Third Nokia Growth Partners fund China Aerospace Science and Tech 158 Aerospace Hi-tech Venture Capital Fund Samsung 100 Catalyst Fund Perfect World 65 Undisclosed Fuji TV 17 Fuji Startup Ventures Mesa 10 Mesa+ Rakuten 10 Startup Strategic Fund New Jersey Health Foundation 5 Foundation Venture Capital Group Alchemy & Science 2 Boston Beer Company Twilio Undisclosed Twilio Fund Europe

Corporate-backed venture fund closes Amount raised ($m) Fund Main corporate backer(s) Galena Asset Management 275 Mining fund Trafigura Lux Capital 245 Lux Ventures III Undisclosed corporates Emerald Technology Ventures 130 Cleantech Fund III Evonik Industries, Mahle, Cofisa Delta Partners Capital 100 Emerging Markets NTT Docomo TMT Growth Fund II Ribbit Capital 100 First fund BBVA, Silicon Valley Bank Allos Ventures 40 Second fund Cintrifuse (corporate backed ) 4Di Capital Undisclosed Fund I E Oppenheimer & Son International Capnamic Undisclosed Undisclosed Dumont Schauberg Alliance Healthcare Ptnrs Mngmt Undisclosed Alliance Healthcare Linkage Ventures Investment Fund

Funds being raised with corporate backing Amount raising ($m) Fund Main corporate backer(s) SVB Capital 300 Strategic Investors Fund VI Silicon Valley Bank Sanderling Ventures 250 Sanderling VII GlaxoSmithKline Pereg Ventures 50 First fund Nielsen Incubate Fund 21 Second fund  DeNA Big Issue Invest 0.5 Spark Corporate Social Nominet Trust, Salesforce, Venturing Challenge Mitie, Unity Trust Bank, Merrill Lynch and Lloyds Development Capital Lool Ventures Undisclosed Undisclosed DLD (Hubert Burda digital division unit)

Global Corporate Venturing April 2013 16 Monthly analysis

These pages summarise last month’s deal activity with a corporate venturing involvement. For full coverage on each deal as well as all other news, visit www.globalcorporateventuring.com. To report a deal or add your data, email Toby Lewis at [email protected] March deals slow as Cyprus scares markets

Corporate venturing investments slowed in March by number and value as exits were boosted by three initial public offerings (IPOs). The slowdown in deal activity came as nerves appeared to creep back into wider market trading, as eurozone country Cyprus negotiated a bailout that involved haircuts for bank depositors. The jitters came even as the Dow Jones Industrial Average con- tinued to set record highs, suggesting many in the wider care companies Celgene and Novo. market were bet- The third-largest deal was South ting the resurfacing Africa-based media group Naspers’ $50m eurozone difficulties investment in Russia-based operator of online would be consequential. classified advertising Avito, as part of the group During the month, Global Corporate being merged with Slando and Naspers-owned OLX, Venturing tracked 62 investments worth $833.4m, com- valuing the combined company at $570m. pared with 80 investments worth $1.8bn in February and The most active sector was consumer, with 17 invest- 75 investments worth $1.7bn in March last year. ments, followed by health with 15, and services with 12. There were six exits and three IPOs during March worth Just 10 information technology deals meant that sector $898.4m, compared with seven exits and IPO in February was less active than usual. worth $364m and 75 exits worth $1.7bn in March last year. A rounds were the most common type of deal, at 15 The largest exit was the $380m sale of Tensilica, backed by (24%), followed by B rounds with 14 (21%), and stake pur- corporates including Japan technology companies Fujitsu chases with 12 (19%). As there were also six seed rounds, and NTT. Corporate-backed IPOs involved Marin Software, more than half the activity involved early-stage, suggest- Silver Spring Networks and Enanta Pharmaceuticals. ing either an increased risk appetite or an unwillingness to The largest investment of the month was the $150m deploy large sums. raised by Australia-listed regenerative medicine company, The US took more than two-thirds of activity, with 42 Mesoblast, from unnamed “existing strategic investors”. deals. The second most active region was the UK with 10 The second-largest deal was the $60m D round raised deals (10%). Russia had three, while Germany and Swit- by PTC Therapeutics, from a consortium including health- zerland had two each. n

Global Corporate Venturing April 2013 17 Monthly analysis The big deal Macmillan’s wind of change

This big deal analysis focuses on publisher Macmillan’s Veduca, a Brazil-based online video platform for educa- corporate venturing unit’s investment in two Brazil-based tional content, raised $740,000 in its seed round from a education technology companies, Veduca and Easyaula. consortium including Macmillan Digital Education, whose The deals bring to mind UK prime minister Harold Mac- parent has been active in the country since 1994. millan’s speech to South Africa’s parliament in 1960, when Matthias Ick, managing director of Macmillan Digital he said: “The wind of change is blowing through this con- Education, which was founded in 2012 as a UK-based tinent [Africa]. Whether we like it or not, this growth of subsidiary of Germany-based publisher Holtzbrinck, said: national consciousness is a political fact.” “This is a major step in our intention to provide a cata- The speech heralded the independence of British colo- lyst for the next phase of our ambitious plans in Brazil and nies, dependencies and dominions in Africa and elsewhere the wider region. Together with Veduca and Easyaula, we in the world that decade, but in a different context, Macmil- will support and enhance the development of technology lan’s words could be applied to the explosion of national driven-education in Brazil. Both brands will play an impor- consciousness concerning innovation and regional diversity. tant role in helping us reach our goal to support people in Or, as a corporate venturing head at a Japan Ven- their life-long learning journey.” ture Capital Association (JVCA) event hosted by the UK Veduca shows videos in their original English language embassy in Tokyo put it, referring to the local entrepre- format, subtitled in Portuguese, while Easyaula is an online neurial ecosystem: “The Silicon Valley model is not nec- educational marketplace that claims to makes it easy for essarily transferable to Japan. We need to find our path.” people to learn anything from anyone. (see Innovative region: Japan). Macmillan said it could help the companies internation- UK publisher Macmillan, owned by German publisher alise. This is part of the wave ot local-to-global entrepre- Holztbrinck, has invested in three technology-led corporate neurs that develop in one region but through the internet venturing and incubation businesses over the past two years can apply their models more globally, either as reverse – Macmillan Digital Education, which invests in and builds innovation into richer countries or as part of an emerging- consumer-focused educational services, such as Tutoria; to-emerging markets business model, perhaps best exem- Digital Science, which specialises in providing software solu- plified by South Africa-based media group Naspers’ corpo- tions for scientists since its launch in 2010 and has also made rate venturing unit MIH. corporate venturing investments in BioData, SureChem, This topic of regional innovation and globalisation will be a Labtiva, 1DegreeBio, Bioraft and Symplectic; and Macmillan key strand of discussion at the next Global Corporate Ven- New Ventures, which discovers and develops technologies turing Symposium in London in May, when Naspers’ Charles for educational development, such as I>clicker, Educational Searle will give a keynote address and we welcome a host Benchmarking and PrepU, and was launched in June. of industry leaders from around the world (see agenda). n Q&A with Matthias Ick, Macmillan Digital Education Has Macmillan published in Portu- almost 20 years. These two investments guese or are these deals an entry into constitute the entry of Macmillan Digital that market? Education into Brazil and we will focus on Macmillan has a long and rich history of further opportunities in new technology commitment to the teaching of English and service-driven areas of the education at all levels and has been active in Brazil market. since 1994. Through Macmillan Educa- tion, it has been giving special attention to Is it more about seeing great ed-tech producing teaching materials that reflect entrepreneurs in any space, backing the cultural conditions and country specific the ideas and maybe taking them more curriculum, providing teachers, students international through your network? and educational institutions a wide range of high-quality, Obviously having a great team is an important investment tailor-made materials in print and electronic format for criterion for us. Both Diego Álvarez [chief executive and

Global Corporate Venturing April 2013 18 Monthly analysis founder] of Easyaula, and Carlos Souza [co-founder of ence, education and scholarly businesses. These more Veduca in partnership with Andre Tachian] are among the established businesses have all built strong brands and great new wave of Brazilian ed-tech entrepreneurs devel- an enviable track record for editorial excellence by taking oping new platforms to make learning more accessible and a content-led, technology enabled approach. With our new more effective for Brazilians. Beyond funding we strive to digital businesses, we have started to play on the strengths facilitate the growth of our portfolio companies by leverag- we have in those markets to extend the brands we have ing our network and expertise. Macmillan’s global footprint into technological products and services. We have been can be of great help to internationalise successful services investing heavily in digital counterparts for each of these quicker. Both companies are currently laser-focused on areas with a brief to optimise, innovate and transform the the Brazilian market, but once they internationalise we will markets. It is the fusion of the disruptive technology start- fully support them. up businesses with the editorially-rich established players that enables Macmillan to evolve its overall business and Holtzbrinck seems to have multiple venturing units – fuel quicker access to new markets and new opportunities. Macmillan’s Digital Science division, Macmillan New Ventures – and yet it spun off Holtzbrinck Ventures at Do you connect to university venturing funds in this the headquarters. How do they fit together? area? Massive open online courses (Moocs) and Macmillan Digital Education’s investments are part of a higher education seem great areas for disruption. broader initiative to invest in start-up businesses within The Moocs currently raise a lot of attention, mainly driven Macmillan’s science and education division. Under its by impressive usage statistics. So it is being demonstrated chief executive Annette Thomas’s direction, the division that people are interested and actually see the benefits has invested in three technology-led start-up businesses of accessing even the highest-quality university courses over the past two years – Macmillan Digital Education, online. The potential to reach worldwide learners with a which invests in and builds consumer-focused educational single course is fascinating. We are following the market, services, Digital Science, which specialises in provid- and with Veduca we have already invested in one of the ing software solutions for scientists, and Macmillan New leading Moocs in Brazil. For universities, Moocs offer a Ventures, which discovers and develops innovative and great opportunity to increase their reach and it will be inter- proven technologies for educational development. We esting to see what models prove to be mutually beneficial have a long and rich heritage in providing content for sci- and sustainable. n

Global corporate venturing activity last month

UK 6 Germany 2 Russia 3 France 1 Switzerland 2

US 42 Japan 1 Israel 1

India 1

Singapore 1

Brazil 1 Clean-tech Stake Consumer purchase Seed Undisclosed Financial services E round M&A and beyond Health Australia 1 Industrial D round A round IT C round Media Services B round Transport Utilities Source: Global Corporate Venturing

Global Corporate Venturing April 2013 19 Global Corporate Venturing

Global Corporate Venturing’s Deal Database Need to know what deals your competitors or potential customers have done? Want to look at trends in a particular sector or geography for a presentation? Would you like to know who is co‑investing with whom?

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