Mission-Critical: How IT Rules the CVC World INSIDE H1 Reveals Most Active Investors Disruptive 50 Shows CVC Strength Contents

July-August 2020

Mission-critical: how IT rules the CVC world INSIDE H1 reveals most active investors Disruptive 50 shows CVC strength Contents

SECTOR REPORT US broadcaster CNBC created the Disruptor 50, highlighting the “private companies whose 33 IT breakthroughs are influencing business and · Continued growth in number market competition at an accelerated pace”. of deals and exits Underlying digitisation trends The startups on the list have corporate venturing · may be reinforced by the backing in more than 80% of cases. GCV tracks the pandemic most recent news stories about each one. Rise in funding initiatives and · many people moves

50 COMMENT 40 64 Covid-19: the retail 30 time machine 20 · Pandemic has sped up digital transformation 10 · Retail ecosystems benefit 0 consumer and vendors CVC VC PE Ana Maury Aguilar · Supply chains need to adapt

68 Independent VC versus SPECIAL REPORT corporate VC CVC share compared with IVC · “Deal sourcing is one of the share has risen to 25% 6 Disruptor 50 topics where IVC and CVC funds · More than 80% of this year’s list is CVC-backed · Main goal of CVCs is strategic differ widely” · CVC is working collaboratively in the ecosystem · IVCs may be able to capture Héctor Shibata · The companies have raised more than $74bn more value in downturns

REGULARS

4 Editorial 16 News 25 Analysis of… 85 Navigating the state · CVCs are vital to the ecosystem · Social media company seeks · Health IPOs · KfW bought into vaccine firm head of investments · Deals, exits and funding · Genetech · Political attention increased by initiatives are healthy · Alphabet backs black-led innovation’s success · Autonomous vehicle tech · A chance for venture to move businesses · State agencies can be useful · Vaccine innovation away from its procyclical · Chilean petroleum company part of the mix reputation sets up unit · Fintech

22 People · Moves at YJ, Verizon, SoftBank

2 Contents

FEATURES 87 Quarterly data report

· Total investment is up on Q1 IT 156 72 Innovative region: DACH · Year-on-year picture is less Health 153 · Exponential growth in heartening corporate venturing Financial 108 · Top deal is MGI Tech’s $1bn Industrial 81 · Robust startup ecosystem Services 76 development 100 Monthly data report · Strategic partnerships among · Deals up 15% in dollars, still diverse players down in numbers (y-o-y) · Comparable number of exits 83 University venturing $9.56bn vs same month last year · SETSquared’s success story Investment value in Q2 · More funding initiatives · Partnership has supported reported than in past months 4,000 entrepeneurs · Focusing on spinouts and spin-ins was crucial

Global Corporate Venturing Analytics: Kaloyan Andonov Reporter: Callum Cyrus Address: 3 Lower Thames Street London EC3R 6HE Email: [email protected] Email: [email protected]

Published by Mawsonia Ltd™, all rights reserved, Supplements: Liwen-Edison Fu Managing director: James Gunnell unauthorised copying and distribution prohibited.© 2020 Email: [email protected] Email: [email protected]

Editor-in-chief: James Mawson Global University Venturing: Thierry Heles Managing director for Asia: Tim Lafferty Email: jmawson@mawsoniacom Email: [email protected] Email: [email protected]

News editor: Rob Lavine Contributing editor: Tom Whitehouse Production editor: Julia Lee Email: [email protected] Email: [email protected] www.globalcorporateventuring.com

3 Global Corporate Venturing July-August 2020

Editorial Venturing is here to stay – and iterate > CVCs are vital to the ecosystem > Deals, exits and funding initiatives are healthy > A chance for venture to move away from its procyclical reputation

This year has seen a ringing The data support this. Deals are up 15% endorsement from the leaders of the in dollars year-on-year though they are venture industry of the importance of down in numbers. The number of exits, corporate venturing to the ecosystem. versus the same month last year, is Venture capital legends, such as Scott comparable and there are more funding Sandell, managing partner at NEA, and initiatives than in the past few months. Scott Kupor, partner at Andreessen James Mawson This period is more than a chance to Horowitz, described how they now Editor-in-chief reassure VCs and entrepreneurs that looked to work and invest with top this time, it really is different. It is also a corporate venturing capital units at the chance for the whole venture industry to GCVI Summit in January. This, however, step away from its reputation as a pro- was pre-downturn. cyclical part of financial services, that is, At June’s first GCV Digital Forum, senior one that invests more towards the top of corporate representatives reiterated the economic cycle than the bottom. their desire to stay the course and VC should prefer to do more at worse continue to support portfolio companies economic times because the numbers through the Covid-19 economic of entrepreneurs should increase as downturn. They also reiterated their traditional job opportunities decline and desire to find and lead new deals. valuations improve.

www.globalcorporateventuring.com 4 Global Corporate Venturing July-August 2020

Now is the chance to achieve this. But and the entrepreneurs. The benefits to to do so requires all parts to work more limited partners in terms of financial and closely together. strategic can then be more easily reaped and valued. Already, by copying corporate venture capital, VCs have experienced the benefits The source of the capital adjusts the mix of providing more value-added services, of requirements to be delivered back to such as professional human resources, the limited partners and hence the types business development and customer of entrepreneurs they support and how. targeting, to entrepreneurs. These These differences, however, are services lower loss rates and increase VCs’ relatively minor compared with the chances of raising their next funds. bigger questions a decade ago about It also creates bigger businesses. how disparate the top corporate, The 50 startups making broadcaster independent, government, angel and CNBC’s 2020 Disruptor list are “at family, or university venturing units were. the epicentre of a world changing in Now, the similarities are more apparent previously unimaginable ways, turning and the key differentiator is skill at ideas in cybersecurity, education, health finding and working with the best IT, logistics and delivery, fintech and entrepreneurs. The top investors agriculture into a new wave of billion- increasingly look and sound the same dollar businesses”. and this is likely to mean the best ones Thirty-six of the 50 disruptors are will increasingly want to work together. unicorns that have already reached This is why, at our GCV Digital Forum 2.0 or passed the $1bn valuation mark – on September 29, we are setting perhaps unsurprising given they have up the Global Innovation Venturing to collectively raised more than $74bn in bring together the top investors from VC. More than 40 of them are corporate- the GCV Leadership Society with their backed, which gave them access to these venture peers. tremendous sums of capital. The best entrepreneurs already benefit Scale has been achieved alongside from the network effects of investor greater professionalism that, as a service syndicates. Now investors can find their provider, venture investing is about own gathering place. supporting longer-term innovation

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Top 50 disruptors CVC dominates CNBC’s top 50 disruptors

> More than 80% of this year’s list is CVC-backed > CVC is working collaboratively in the ecosystem > The 50 companies have raised more than $74bn in VC

James Mawson In the eighth annual Disruptor 50 startups into a new wave of billion-dollar Editor-in-chief list, US-based broadcaster CNBC businesses. identified “private companies whose The 50 companies selected using the breakthroughs are influencing proprietary Disruptor 50 methodology business and market competition at have raised more than $74bn in venture an accelerated pace”. capital, according to data provider The group of academics who mainly PitchBook, and in aggregate have been helped select the 50 picked startups with valued at near-$277bn. corporate venturing backing in more than 80% of cases. Only eight of the 50 were backed by venture capital rather than corporate Though it used to have a reputation of venture capital, and only one was private being “dumb money” and being unable equity-backed. to access the top startups, the corporate venturing industry is now working GCV analysed the Disruptor 50 to show more collaboratively with other parts of our latest news coverage of these the investment ecosystem to develop innovative startups.

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Unlocking the lockdown’s biggest value

Analysis: Stripe gets paid $850m

1 Digital payment provider Stripe raised an extension to its Stripe series G round backed by Alphabet in late April.

Beating Bezos at his own online game?

Coupang cops another $2bn from SoftBank

2 SoftBank’s Vision Fund provided $1bn for the e-commerce marketplace at a $9bn valuation in November 2018, three Coupang years after a $1bn investment by its parent company.

The future of farming is carbon negative

Indigo Agriculture harvests $200m

3 FedEx contributed to a $175m convertible equity round for agricultural technology and services provider Indigo in January, Indigo Agriculture secured alongside $25m in debt financing.

Online ed’s biggest test begins

Coursera signs up for $103m series E module

4 Seek Group led a series E round in April 2019 that valued Coursera at more than $1bn, boosting the online education Coursera provider’s total funding to more than $313m.

No online sale left behind

Commonwealth Bank returns to Klarna with $200m

5 The payment and shopping app developer launched in Australia in January with the help of Commonwealth Bank of Klarna Australia, which raised its stake to 5.5%.

Precision medicine for the Covid crisis

Tempus successfully tempts Novo in $100m round

6 The pharmaceutical firm was among the investors in a series G round that valued the precision medicine technology Tempus provider at $5bn in March.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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Medicine takes flight autonomously

Zipline speeds up with $190m

7 Medical supplies delivery service Zipline revealed two funding rounds totalling $190m in May, one of which is a $70m series Zipline C that included existing backer GV.

The future of your financial future

SoFi sorts out another $500m

8 SoftBank and Renren-backed online financial services provider SoFi was valued at $4.8bn following a $500m round led by QIA SoFi in May.

Contactless health

Skin in the game for Plug and Play and Q Ventures Neteera Technologies 9 Neteera is funded by Plug and Play and Q Venture Partners, with $8.5m in total, according to Crunchbase. Its tech is used for non- invasive monitoring of human vital signs.

Indonesia’s original ridehail, growing up

Gojek carts away $1.2bn

10 Unnamed investors added $1.2bn in March to a round already featuring AIA, Mitsubishi, Visa, SCB, Astra International, Gojek Tencent, JD.com and Google that reportedly totals near $3bn.

Branchless banking

WeLab produces $156m result

11 Alibaba Hong Kong Entrepreneurs Fund was one of five returning backers to reinvest in the online lending platform as WeLab part of its series C round in December.

The most in-demand in on-demand

DoorDash chases $15bn valuation in next round

12 The SoftBank-backed food delivery app developer was reportedly close to raising new funding at a pre-money DoorDash valuation in excess of $15bn in June.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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The next big thing in medicine: housecalls?

Heal scores $20m from strategic investors Heal 13 House-calls-from-doctors provider Heal closed $20m in additional funding in May, bringing the company’s total capital raised to more than $69m.

A network key to the 5G future

Movandi waves hello to $27m

14 Movandi, which creates 5G millimeter wave networks, raised $27m in Series C funding in April to accelerate and extend the Movandi range of real world deployments. WRVI Capital led the round.

Closing the mortgage gap online

Corporates bet on Better in $160m series C

15 Ping An Global Voyager Fund and American Express Ventures were among the investors in a round the mortgage financing Better.com platform closed at a $600m valuation in August 2019.

Southeast Asia’s super app

Grab takes $856m amidst Gojek merger rumours

16 Reports in February suggested Grab, which raised $856m from strategic partners TIS and Mitsubishi UFJ Financial Group, Grab is in talks to merge with rival Gojek in a $23bn deal.

AI-ing the end of the insurance agent

Lemonade to pour itself on to public markets

17 SoftBank, Allianz, XL Innovate and GV are in line for exits after the digital insurance providerfiled for a $100m initial public Lemonade offering in June.

Replacing demographics with real driver data

Root Insurance raises $350m

18 Car insurance startup Root Insurance is set to raise $350m in a round that would take its valuation to $3.65bn. The Series E will Root Insurance be led by new investors Coatue Management and DST Global.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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Home-based health testing

Healthy.io sells Samsung on $60m series C

19 Existing investor Samsung Next returned for a $60m series C round in September as Healthy.io secured regulatory Healthy.io clearance for its app-based kidney disease test.

Technology tackling the high cost of health care

GoodRx valued at $2.8bn after PE investment

20 Silver Lake, the technology-focused private equity firm, has taken a stake in health-technology startup GoodRx valuing it at GoodRx about $2.8bn, according to people familiar with the matter.

Just the egg, no chicken

Just sets $200m funding course Eat JUST 21 Just, the Uni-President Enterprises-backed, plant-based food supplier, was seeking $200m in fresh funding primarily from Chinese investors in February 2019.

The convenience store gets more convenient

GoPuff gets $750m funding delivery

22 The online convenience store raised $750m in August 2019, in a round led by SoftBank Vision Fund, The Information goPuff reported. Other investors included Accel.

Building new credit history

Affirm looks to raise $1.5bn on $3bn valuation

23 Pymnts.com reported in September that New York VC firm Thrive Capital was at the helm of the financing and Spark Affirm Capital was participating.

A main street lending lifeline

Kabbage receives $250m SoftBank investment

24 Existing investor SoftBank agreed to invest $250m in the small-business lender in 2017, increasing its overall funding to Kabbage about $490m since 2009.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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No-fee banking

Chime checks in to $500m series E

25 Mobile bank operator Chime closed a $500m series E round in December at a $5.8bn valuation – an increase of $4.3bn in Chime nine months – backed by Access Industries.

Taking down the overdraft Goliath

Dave banks on Norwest to raise $50m

26 Norwest Venture Partners acquired a 5% stake in JPMorgan Chase and Chernin Group-backed digital banking service Dave provider Dave at a $1bn valuation in October.

Verification for a more virtual world

Trulioo authenticates series C funding

27 Citi Ventures, Santander InnoVentures and American Express Ventures chipped in for a $52.8m series C round revealed in Trulioo September with approximately $7.6m in follow-on funding.

A crypto answer to money transfer

Ripple wraps up $200m series C

28 SBI returned in December for a round that increased the valuation of the blockchain-focused money transfer platform Ripple to $10bn from a reported $355m three years ago.

Making microloans add up to a billion

Tala tallies up $110m

29 Alphabet-backed microfinance app developer Tala secured the series D funding in August 2019 at a reported $750m Tala valuation, with PayPal among the participants.

Riding a post-Covid pickup in China

SoftBank to settle $300m round for Didi Chuxing

30 In March, the ride hailing service was reportedly near to raising $300m in a round led by existing backer SoftBank that Didi Chuxing will follow $18.3bn in earlier financing.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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Cybercrime is up; so are defences

SentinelOne gets $200m present

31 Qualcomm Ventures contributed to a series E round in February that boosted the endpoint cybersecurity software SentinelOne provider’s post-money valuation to $1.1bn.

A smarter ultrasound

Fosun catches Butterfly in $250m series D Butterfly Network 32 Fosun Pharma contributed to a $250m series D round for medical device maker Butterfly Network in September 2018, valuing the company at $1.25bn.

Paying with a full deck of cards

Marqeta makes off with $150m

33 An undisclosed investor provided the funding at a $4.3bn valuation in May.The company has already raised nearly $370m Marqeta from backers including Commerzbank, Visa and CreditEase.

Ridding the world of rotten produce

New $250m round helps Apeel

34 Apeel is tackling the world’s wasted food problem with a $250 million round of new funding and a $1bn valuation, according Apeel to Crunchbase in May. GIC led the round.

Primary (smartphone) care

Corporates cater to K Health in $48m round

35 Anthem and existing investor Comcast Ventures took part in a round in March that reportedly boosted medical advice app K Health developer K Health’s overall funding to about $97m.

Data help for data nerds

Analysis: Databricks cements a $400m round

36 Big data platform Databricks raised $400m in October, reportedly at $6.2bn valuation, with the backing of Microsoft. Databricks Corporates have been investing heavily in big data tech.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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Building a bigger brain

C3.ai adds Rise Fund

C3.ai C3.ai‚ the AI and IoT software platform provider for digital 37 transformation‚ in January 2018 announced a round of financing by existing investors TPG Growth, Breyer Capital, Sutter Hill‚ Pat House and Thomas Siebel. The Rise Fund joined the round.

Amazon’s ant-size competition

Attabotics retrieves $25m in series B round

Honeywell and Comcast Ventures took part in the August 38 2019 round, boosting the total raised by the warehouse management system provider to nearly $33m. Coatue Management, Forerunner Ventures and Werklund Ventures’ Attabotics Growth Fund also took part in the round.

Biometric screening for a new world of hidden dangers

Clear scans $15m in new funding 39 Existing investor T Rowe Price provided $15m for biometric security technology provider Clear in April 2017, which received an undisclosed amount from Delta Air Lines in 2016 Clear for a 5% stake.

A data warehouse in the cloud

Snowflake to crystallise IPO plans

In June, Capital One and Salesforce-backed cloud database 40 provider Snowflake confidentially filed for an initial public offering that could value it at up to $20bn, according to Bloomberg. The company most recently secured $479m in a series G round co-led by Salesforce’s corporate venture Snowflake capital unit, Salesforce Ventures.

Your delayed destination

Airbnb adds $1bn in new round

41 Silver Lake and Sixth Street Partners supplied debt and equity financing for the Alphabet-backed online short-term Airbnb accommodation platform in April at a $26bn valuation.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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The universal language

Duolingo converses with CapitalG for $30m

42 Language teaching app Duolingo received series F funding from existing backer CapitalG in December and was valued at Duolingo $1.5bn.

A carbon-capture moonshot

LanzaJet takes off with $50m

43 Suncor, Mitsui and ANA provided equity funding for LanzaTech’s sustainable aviation fuel spinoff alongside a grant LanzaTech from the US government in June.

The world’s most advanced manufacturing

Gingko traces Illumina for $70m round

44 Illumina, General Atlantic and Viking Global Investors supplied $70m for Ginkgo Bioworks in May. The cell programming Ginkgo Bioworks technology provider that has now raised more than $789m.

Upskilling America

Guild Education studies $157m series D

45 Salesforce Ventures and Workday Ventures provided follow-on funding for edtech developer Guild Education in Guild Education Novemember, which has now raised more than $228m.

The new bull market-makers

Robinhood captures $280m series F

46 Robinhood fetched an $8.3bn valuation in May thanks to a $280m series F round featuring existing backers, though it Robinhood was unclear if Alphabet and Roc Nation were among them.

A monster trucking problem solved

Convoy carries $400m series D

47 CapitalG returned for the $400m series D in November that brought Convoy’s total funding to $668m, after the Alphabet Convoy subsidiary had previously led a $185m series C round.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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A makeover for the cosmetics industry

Beautycounter receives Mousse Partners cash

Beautycounter Beautycounter, which makes safer skin care and cleaner 48 cosmetics, announced that family office Mousse Partners Limited had made a strategic investment in January 2018. TPG Growth also participated in the round, having invested in the company in 2014.

Doesn’t seem so impossible anymore, does it?

Impossible Foods husbands $500m F round 49 The US-based plant-based meat producer backed by internet and technology conglomerate Alphabet, raised $500m in March – substantially more than the $300m to $400m it had Impossible Foods been targeting..

The robots are coming for your boring, repetitive job

UiPath heads to $568m series D

50 CapitalG once again backed automation software provider UiPath in May, as it closed its series D round at a $7bn UiPath valuation to take its total funding to nearly $1.1bn.

Corporate venture capital-backed Venture capital-backed Private equity-backed

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News Facebook starts corporate venturing > Social media company seeks head of investments > Alphabet backs black-led businesses > Chilean petroleum company sets up unit

US-based social media company developers of products that can support Facebook has begun setting up a carbon reductions. corporate venture capital (CVC) unit, The Climate Pledge Fund is targeting Axios reported, citing a job listing transportation, logistics, manufacturing, posted by the firm. materials, food and agriculture The employee will be head of technology developers as well as investments at Facebook’s New Product those that engage with clean power Experimentation subsidiary, which it production and storage and the circular formed to launch consumer-focused apps. economy. The fund will be partially managed by The vehicle is named after the Climate Shabih Rizvi, who spent two years as Pledge announced by Amazon in founding partner at Google’s artificial September. It hopes other companies intelligence (AI) fund, Gradient Ventures, that have signed the pledge, including before moving to a business development telecoms firm Verizon and consumer role at Google in April 2019. goods producer Reckitt Benckiser will contribute to the fund. Amazon assembles $2bn Climate Pledge Fund MassMutual amasses third fund E-commerce group Amazon launched MassMutual Ventures, the corporate a $2bn investment fund that will back venturing subsidiary of US-based

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insurance provider Massachusetts will facilitate their entry into the Latin Mutual Life Insurance, launched its third America market. It will invest roughly US fund in June with $100m in capital. $1m to $10m per deal across series A to C rounds and pursue follow-on funding Launched in 2014, MassMutual Ventures opportunities. invests in financial, cybersecurity and digital health technology developers as The fund has provided $30m for energy well as enterprise software providers, storage technology producer Stem, and participating in early and growth-stage $2.5m each for Spain-focused energy rounds. storage system operator Ampere Energy and Cargo, a ride hailing platform that The unit has so far invested in almost offers an in-car retail service. 40 companies and its portfolio includes equity trading platform IEX, cyber-risk management platform CyberGRX and data protection software producer Digital Guardian. It intends to back between 15 and 20 companies with the latest fund.

Alphabet announces $100m black- focused investment plans Internet and technology conglomerate Alphabet pledged to commit $100m Wind Ventures will back global energy, mobility to investing in black-led companies and retail tech developers and investment funds as well as organisations supporting black Talent agency links to NEA for entrepreneurs. Connect Ventures The commitment will include an US-based talent agency Creative Artists increased contribution to Plexo Capital, Agency (CAA) formed an investment the venture capital firm founded by Lo vehicle with VC firm New Enterprise Toney, formerly a partner at Alphabet Associates (NEA) that launched with corporate venturing unit GV, with the $100m in capital, according to the intent of funding companies with black Hollywood Reporter. or female founders. Connect Ventures will leverage the Alphabet also intends to provide non- existing relationships CAA has in the dilutive funding to black founders that sports and entertainment industries. The make up part of the Google for Startups companies plan to invest up to $400m network as part of the $100m pledge. through the venture, the Hollywood Reporter said.

Copec sets stage for corporate The fund will be run by Rick Yang, NEA’s venturing head of consumer investing, while CAA’s Chile-listed petroleum supplier end will be overseen by its new head of Compañía de Petróleos de Chile (Copec) consumer investments, Michael Blank. publicly launched a US-based CVC The agency already runs its own subsidiary called Wind Ventures. corporate venturing unit, CAA Ventures, Formed in late 2019, Wind Ventures which invests in online media, consumer is targeting global energy, mobility internet, gaming and digital hardware and retail technology developers, and product developers.

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Trip.com embarks on corporate commitment to a China-focused fund venturing targeting the energy transition. China-based online travel services Cathay Smart Energy Fund had already provider Trip.com has formed a CVC received backing from oil and gas vehicle, DaHe Fortune Cube reported, supplier Total’s Carbon Neutrality citing business data aggregator Ventures unit, shipping services firm Qichacha. CMA CGM, Hubei Provincial High Xiecheng Entrepreneurship Investment Technology Industry Investment Group Company is sized at RMB100m ($14.1m) and Wuhan Jingkai Industry Investment and will be overseen by Jie ‘Jay’ Shen, the Fund Management. Trip.com vice-president who heads its The fund was set up by investment investment department. manager Cathay Capital in 2018 and Founded in Hong Kong in 1999, Trip.com focuses on energy platforms, energy was acquired by China-based peer Ctrip storage, smart grid, hydrogen energy, (known in Chinese as Xiecheng) in 2017 clean transportation, renewable energy and has been the latter’s global portal. and low-carbon technologies. It also operates travel search engines The first investment to be made by Skyscanner and Qunar. Cathay Smart Energy Fund was in China-based industrial internet-of- BioGeneration Ventures bags things technology developer Allsense $119m fourth fund Technology. Netherlands-based, healthcare-focused VC firm BioGeneration Ventures closed its fourth fund having raised €105m ($119m) from limited partners including pharmaceutical firm Bristol Myers Squibb (BMS).

BMS and fellow existing backers Schroder Adveq and the European Investment Fund (EIF) joined new LPs including Industriens Pension and KfW Capital in the oversubscribed BGV IV. Air Liquide’s corporate venturing subsidiary has Founded in 2006, BioGeneration contributed to an energy transtion fund Ventures invests in seed and early-stage pharmaceutical developers. Axa takes wing for Fly Ventures’ second fund The firm now has more than €220m Germany-based VC firm Fly Ventures under management. It closed its third has closed a second fund backed fund at $95.5m in 2017, when Johnson & by insurance group Axa’s corporate Johnson Innovation – JJDC, the corporate venturing arm, Axa Venture Partners, at VC arm of medical products group €53m ($59.4m), according to Tech.eu. Johnson & Johnson, was also an investor. The fund will invest between $560,000 Aliad commits to Cathay Smart and $1.5m per deal. The firm generally Energy Fund focuses on seed-stage deals. Aliad, the corporate venturing subsidiary The European Union-owned European of France-based industrial gases provider Investment Fund. and KfW Capital, a Air Liquide Group, has made its first public VC vehicle formed by German

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state-run development bank KfW, were off its own balance sheet and through also among the fund’s LPs. Pfizer Ventures, the CVC subsidiary it established in 2004. Founded in 2016, Fly Ventures targets Europe-based enterprise and deep technology developers specialising in Kyowa Kirin commits to 4Bio areas such as insurance automation, Kyowa Kirin, a Japan-listed specialty cybersecurity, clinical trials optimisation pharmaceutical company, has committed and anti-money laundering technology. an undisclosed amount to 4Bio Capital’s second fund.

Real Tech goes local with latest fund The UK-based VC firm targets advanced Several corporates have become LPs medical therapies and had raised more in a fund being raised by Japan-based than $50m for the first close of its 4Bio investment firm Real Tech Holdings with Ventures II fund by September 2019. an ¥8bn ($74.3m) target, which has just It has set a $150m target for its final held a first close. close. Kyowa Kirin is the first strategic pharmaceutical investor in the vehicle. Real Tech Fund III Investment Business Limited Liability Partnership’s LPs include metal parts producer Kobayashi Industries, air conditioner manufacturer Daikin Industries, financial services companies Hamamatsu Iwata Shinkin Bank, Mizuho Bank, Senshu Ikeda Bank and Sumitomo Mitsui Banking Corporation, and brokerage SMBC Nikko Securities.

Real Tech Fund was formed in 2015 as a joint venture for biofuel supplier Euglena, research firm Leave a Nest and Garden product maker is seeking growth investment firm SMBC Nikko. Scotts Miracle-Gro plants $50m fund Pfizer to augment VC investments US-based garden and lawn product with $500m maker Scotts Miracle-Gro has formed a US-based pharmaceutical firm Pfizer $50m CVC vehicle called 1868 Ventures pledged to invest up to $500m in in partnership with corporate VC services biotech companies while also providing provider Touchdown Ventures. expertise, through a scheme dubbed Scotts Miracle-Gro oversees a range Pfizer Breakthrough Growth Initiative. of brands that offer lawncare and Pfizer intends to acquire minority gardening products such as fertiliser, soil stakes in publicly listed companies with and nutrients, pest and weed control, small to medium-sized market caps and equipment for indoor or hydroponic that are developing internal medicine, gardening. inflammation, immunology cancer The fund will be stage-agnostic but and rare disease drugs, vaccines and will generally make investments sized hospital-related products, that are at the between $250,000 and $2.5m for a first clinical stage. deal, with capital reserved for follow-on The company is already an active investments. It is prioritising portfolio investor in the healthcare VC space, both companies located in North America.

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Blue Like an Orange closes OLC’s core entertainment and resort $200m Fund management businesses, covering areas Luxembourg-based investment firm Blue such as human resources, children’s Like an Orange Sustainable Capital has lifestyle and education, smart city closed a Latin America-focused fund with development and sustainable energy. limited partners including insurers Axa, BNP Paribas Cardif, CNP Assurances and M12 embarks on Indian adventure SG Insurance at $200m. M12, the CVC subsidiary of US- Financial services firm HSBC, pension headquartered software provider fund MACSF and family offices for Microsoft, has opened an office in Ronald Cohen and Ray Chambers and Bengaluru, India, adding to locations in undisclosed investors are also LPs. the US, UK and Israel.

Founded in 2017, Blue Like an Orange Formed in 2016 as Microsoft Ventures, concentrates on mezzanine financing M12 generally invests from series A to C deals supporting the United Nations’ stage in disruptive enterprise software Sustainable Development Goals. developers in areas like applied artificial intelligence, business applications, The firm has already invested more than infrastructure and cybersecurity. $80m out of Latin America Fund I and concentrates on access to finance for the The unit’s India-based investments unbanked, infrastructure-as-a-service, already include predictive logistics agricultural, healthcare and education platform developer FarEye and technology. Innovaccer, a provider of healthcare data management software.

DIP recruits for 13th AI.Accelerator AI.Accelerator, an AI-focused incubator and accelerator operated by Japan-based human resources firm DIP Corporation, has selected six startups for its 13th cohort.

The finalists include AI training course producer Avilen, DeepEye Vision, an HSBC has invested in Blue Like an Orange ophthalmic diagnostic imaging service provider spun out of Jichi Medical Oriental Land aligns itself with University, and Cognirobo, the developer corporate venturing of a marketing data analysis system. Japan-based theme park and tourism site Each company will have the chance of operator Oriental Land Company (OLC) receiving between ¥5m ($45,000) and has formed a ¥3bn ($27.4m) corporate ¥100m ($915,000) in funding from DIP. venturing vehicle dubbed Oriental Land AI.Accelerator is accepting applications Innovations. for its next cohort until August 31.

Founded in 1960 by railway operator Keisei Group, OLC runs the Tokyo SoftBank promotes inclusion Disneyland and Tokyo DisneySea theme with $100m fund parks in Japan. Japan-headquartered telecoms and internet group SoftBank has formed a The fund will invest in developers of $100m fund that will invest in companies technologies and products related to

www.globalcorporateventuring.com 20 Global Corporate Venturing July-August 2020

led by entrepreneurs and founders who an innovation manager at industrial are people of colour, Axios reported. conglomerate Votorantim.

The Opportunity Growth Fund was announced by SoftBank chief operating Info Edge moves toward $100m fund officer Marcelo Claure in an internal India-based online classified listings letter that stated it will back “companies operator Info Edge is raising $100m for that use technology to disrupt traditional a dedicated CVC vehicle called Info Edge business models”. Venture Fund, Times of India reported.

The vehicle’s investments will be Info Edge and an undisclosed subsidiary supervised by managing partner Shu will provide Rs 350m ($46.2m) in capital Nyatta, who is already helping to manage for the vehicle and plan to source SoftBank’s Latin America Fund. the remainder from external limited partners. The corporate had originally targeted approximately $14m for the fund in January 2020.

Founded in 1995, Info Edge operates several classifieds online portals, such as job listings service Naukri, matrimony website Jeevansathi and real estate classifieds platform 99Acres.

Ultrapower charges up $19m fund

Felipe Steinbruch and Gabriela Toribio Ultrapower Fund, a CVC subsidiary of China-based telecoms and internet software provider Ultrapower Software, CSN sets up innovation fund closed its latest fund at RMB138m Brazil-based steel producer Companhia ($19.4m), DealStreetAsia reported. Siderúrgica Nacional has launched a R$30m ($5.6m) corporate venturing fund The fund has been backed by two called CSN Inova Ventures. undisclosed investment platforms closely connected to the city of Beijing’s CSN Inova Ventures will invest R$2m to municipal government, according to a R$5m in each portfolio company as part statement cited by DealStreetAsia. of a shift by the company to a “more environmental, social and economical Ultrapower Fund was formed in sustainable future”. 2017 in partnership with co-investors including Qianhai Wutong Mergers and The corporate founded its Inova Acquisitions Investment Fund. subsidiary in 2018 under Felipe Spiri and Felipe Steinbruch. It hired Gabriela Investment sectors include AI, big data, Toribio in October the same year to entertainment, education, online finance help its move into VC, from her role as and communication technology.

www.globalcorporateventuring.com 21 Global Corporate Venturing July-August 2020

People YJ Capital wangles new COO > Broughton and Ouimet-Storrs set up medical cannabis firm > Vision Fund to see 15% job cuts > Novo adds private equity

Internet company Yahoo Japan’s Mahn moves to Verizon Ventures corporate venture capital (CVC) US-listed telecommunications group arm, YJ Capital has promoted Hogil Verizon has hired Tammy Mahn as an Doh from partner to chief operating Israel-based managing director for officer. its corporate venturing arm, Verizon YJ Capital hired Doh in February after Ventures, the unit said. almost a decade at e-commerce firm Rakuten. The move comes as the unit bolsters its activities in Israel, having invested in He was a partner at its corporate internet-of-things technology startup venturing vehicle, Rakuten Ventures, from Wiliot and machine learning software 2015, helping manage the $85m Japan developer Iguazio earlier this year. Fund it launched in 2016. Mahn will join managing director Merav Doh’s deals at Rakuten Ventures Rotem Naaman, who was a GCV Rising included ride hailing service Gojek, Star in 2018, and senior associate Gidon digital marketing platform From Scratch, Azaryev, who came on board in February. office food delivery service Okan and MakeLeaps, the digital invoicing Verizon Ventures hired Mahn after three platform developer purchased by years at AgriNation VC, agrochemical stationery products supplier Ricoh in product producer Agrica’s early-stage late 2018. venture capital vehicle.

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Broughton and Ouimet-Storrs has been leveraging his connections set up Óskare Capital with Abu Dhabi sovereign wealth fund Mubadala Investment to help raise the Two of Europe’s most experienced second Vision Fund. venture investors have set up an investment firm called Óskare Capital Matsui has assumed a senior advisory to target medical cannabis product post to enhance Vision Fund’s developers from seed to patient stage. investment strategy, having concentrated on Asia-based financial, healthcare and Nicola Broughton and Alexandre logistics technology deals from SoftBank Ouimet-Storrs are co-founders and Investment Advisers’ Tokyo office. managing partners at Óskare Capital, which launched its first fund on June 11. Its first investment was in Octarine Novo adds private equity strategy Bio, a developer of cannabinoid and Søren Thinggaard Hansen has joined psilocybin derivatives. Denmark-based pharmaceutical firm Novo as a senior partner to set up a Ouimet-Storrs was managing director for private equity initiative to complement its Europe at Solvay Ventures, the $100m existing corporate venturing strategy. evergreen corporate venturing unit for France-based chemicals and materials Hansen had previously spent more producer Solvay. Broughton was principal than 17 years at local pension fund and head of universities at Mercia. Industriens Pension, mainly as head of private equity.

Vision Fund to see out 15% job cuts Novo already provides seed and VC Japan-headquartered internet and to development stage companies and telecommunications group SoftBank takes significant ownership positions plans to cut staff at SoftBank Investment in well-established companies within Advisers, the subsidiary that operates its life science through a public corporate Vision Fund, by 15%, Nikkei reported. venturing strategy.

The company had already lowered expectations for the second Vision Fund pre-coronavirus, and has begun moving some staff members to other parts of the SoftBank group, but the 15% figure is higher than the 10% cuts described by sources to Bloomberg in May.

SoftBank names two senior officers Japan-based internet and telecoms group SoftBank has assigned two former managing partners at its Vision Fund, Akshay Naheta and Kentaro Matsui, to senior roles, Bloomberg reported, citing sources closes to the matter. Max Clegg Naheta has taken a senior vice-president position to mitigate the vehicle’s investment losses, offering strategic Louis Dreyfus plants CVC initiative assistance to the management team. Netherlands-headquartered agriculture, Based in the United Arab Emirates, he food and transport conglomerate Louis

www.globalcorporateventuring.com 23 Global Corporate Venturing July-August 2020

Dreyfus Company (LDC) has named Equinor (then Statoil) hired Aamodt in Max Clegg as head of its newly formed 2008 and she held a series of project corporate venturing vehicle, LDC management and offshore operations Innovation. roles before joining ETV predecessor Statoil Technology Invest in 2017. Clegg joined Louis Dreyfus in 2012 after five years at power and industrial equipment producer General Electric’s Hicks departs from Dell financial services arm, GE Capital. He Technologies Capital held two North America-focused roles Creighton Hicks has left his partner role at from its New York office, initially as head Dell Technologies Capital, the corporate of corporate development and mergers venturing subsidiary of US-based and acquisitions, before shifting to head computing equipment provider Dell, to of food innovation in 2019. join VC firm LiveOak Venture Partners.

LDC Innovations has not disclosed its Hicks concentrated on cloud computing, fund size but will concentrate on food devops and cybersecurity technology and farming technology developers. deals.

At LiveOak, Hicks will be a principal and relocating from Silicon Valley to Austin, Texas. He will focus on deal sourcing and portfolio management for the firm, which typically leads seed-stage rounds for local IT and technology startups.

Feigenbaum finds senior adviser role at SGE Susquehanna Growth Equity (SGE), the growth equity firm sponsored by US-based quantitative trading and technology firm Susquehanna International Group, has hired Adam Feigenbaum as a senior adviser. Kristin Aamodt SGE provides funding for software, information services, internet and Aamodt to bid adieu to Equinor financial technology developers in Kristin Aamodt is set to leave her growth-stage rounds. It has backed 55 managing director position at Equinor companies including credit management Technology Ventures (ETV), a corporate platform developer Credit Karma venturing subsidiary of Norway-listed and accounting software producer energy supplier Equinor, next month. HighRadius.

Gareth Burns, managing director of the Feigenbaum spent almost 19 years at corporate’s clean energy fund, Equinor recruitment software provider iCIMS, Energy Ventures (previously Statoil most recently as chief customer officer, Energy Ventures), will oversee a recently and will lend his expertise in the human combined unit dubbed Equinor Ventures resources software sector. as vice-president.

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Analyses Legend Biotech raises $487m in IPO > Backers include Johnson & Johnson and Eli Lilly > Parent company GenScript retains 66% share > Life sciences IPOs peaked in 2018

Robert Lavine China-based cellular therapy The capital raised also included a full News editor developer Legend Biotech, a spin over-allotment option, exercised by off from biotech producer Genscript joint book-running managers Morgan Kaloyan Andonov Biotech, debuted on the public Stanley, JPMorgan and Jefferies. Analyst markets with its initial public offering at approximately $487m on the The parent company GenScript bought Nasdaq Global Select Market. an additional $23m of shares in a private placement; it has retained a 66% Its investors include pharmaceutical stake in Legend Biotech post-IPO, down firms Johnson & Johnson and Eli Lilly, from 76.9%. from which it raised a $160m pre-IPO round in April. Founded in 2014, Legend Biotech develops cell-based therapeutics to The offering comprised about 21.2 treat diseases including cancer and has million American depositary shares, drug candidates for haematological which represented two common malignancies and solid tumours in shares each. The shares were priced clinical testing from phase 1 to 3, plus at $23, above the $18 to $20 range the an HIV drug in preclinical phase. company had set. Legend Biotech’s shares closed at $37.50, giving it a Up to $185m of the IPO proceeds valuation of about $4.85bn. are expected to go into the clinical

www.globalcorporateventuring.com 25 Global Corporate Venturing July-August 2020

IPOs from corporate-backed health companies

$5,629m 40 36 $6,000m

35 $4,610m $5,000m

30 28 28 $4,000m 25 22 22 $3,000m 20 Dollars

Deal count $3,541m 15 14 $2,000m 10 $1,783m 10 $468m $2,092m 8 $1,525m $1,000m 5 $106m $1,202m 5 2 $560m 0 $0m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GCV Analytics

development of its lead candidate, is also true for corporate-backed life LCAR-B38M/JNJ-4528, which is being sciences enterprises. The number of developed in partnership with J&J’s such IPOs reached a record high of Janssen Biotech. 36 in 2018, when the total estimated capital in these transactions stood at Going public is an often-used $5.62bn. strategy by emerging pharmaceutical companies once they have reached We are yet to see if the Covid-19 crisis a certain level of development. This will spark more interest in such IPOs.

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MGI Tech raises $1bn

> IDG Capital and CPE Capital led the round > The company’s tech has been used for Covid-19 detection > Total estimated capital last year in gene tech was $3.17bn

Thierry Heles Spun off by China-based genomics used for the rapid detection of Covid-19. Reporter services provider BGI, gene MGI products cover genetic testing, sequencing technology developer MGI gene editing and synthesis, and include Kaloyan Andonov Tech raised a $1bn series B round. sequencing reagents, materials and Analyst biochemical reaction systems. Venture capital firm IDG Capital and private equity fund CPE Capital co-led the MGI forms part of the broader genetics round, which also featured investment tech space, which has enjoyed much bank China Renaissance’s New Economy attention from corporate venturers Fund and Goldstone Investment, among over the past decade. The number of many others. corporate-backed rounds in this space reached a peak of 55 in 2018 with a Founded in 2016, MGI develops gene record-high total estimated capital at sequencing systems for life sciences $3.91bn the same year. In 2019, there research, drug development, precision was only a slight decline – to 51 rounds medicine and agriculture. Applications and total estimated capital at $3.17bn, range from mass spectrometry which suggests valuations are holding up and medical imaging to laboratory and are likely to remain high through the automation. Its technology has been pandemic-induced economic downturn.

Corporate-backed deals in genetics tech and gene therapeutics

$3,912m 60 55 4000

55 50 51 3500 50 $3,169m

45 3000

40 38 2500 35 33 $2,449m $2,025m 30 2000 Dollars Deal count 27 25 25 1500 20 $1,426m 16 16 15 1000

10 $550m 9 $611m 500 5 $516m $418m $362m 0 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GCV Analytics

www.globalcorporateventuring.com 27 Global Corporate Venturing July-August 2020 Didi autonomous driving unit raises $500m > Unnamed subsidiary was backed by Vision Fund II > Didi can test tech in four locations > Estimated capital peaked in 2019, suggesting rising valuations

Robert Lavine China-based ride hailing service Didi The partnerships will focus on mass News editor Chuxing’s unnamed autonomous production of driverless vehicles which driving technology subsidiary raised would reduce the costs of Didi’s core Kaloyan Andonov more than $500m in a round led by business of ride hailing. Didi has been Analyst telecoms and internet conglomerate granted approval to test its technology in SoftBank’s Vision Fund II. three Chinese cities and California. The This was the software business’s first unit has signed partnerships with Didi’s round, after it was spun off in September auto repair and maintenance subsidiary 2019. Didi has reportedly been testing and its financial services platform. such technologies since 2016. The spinoff is part of the dynamic The funding will help expand R&D, autonomous driving tech space, which run additional tests and strike more has enjoyed a lot of attention from partnerships in the automotive corporate venture investors. Though industry. The news came a few weeks the number of corporate-backed deals after peer Waymo, backed by internet has fluctuated since 2014, the total conglomerate Alphabet, raised an estimated capital reached a peak at additional $750m, bringing its first $6.72bn in 2019, spread over 51 rounds, external round to a total of $3bn. which suggests rising valuations.

Corporate-backed rounds in autonomous vehicle tech

70 $6,718m 7000 65 63 6500

60 6000

55 5500 51 50 5000

45 4500 40 40 4000 34 35 3500

30 28 Deal count

3000 Dollars $2,964m 25 2500 21 20 $1,699m 2000 15 8 1500

10 1000 $1,041m $14m $873m 5 500 $56m 0 0 2014 2015 2016 2017 2018 2019 2020 Source: GCV Analytics

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Rising interest in vaccine innovation > CureVac backed by German development bank > Vaxcyte raised $250m in IPO > Life sciences remains very strong in 2020

Robert Lavine Two stories in mid-June stood out, Founded in 2000, CureVac develops News editor given the ongoing Covid-19 pandemic. messenger RNA (mRNA)-based drugs CureVac, a Germany-based RNA but its technology could also influence Kaloyan Andonov therapy developer previously backed development of a vaccine for Covid-19. Analyst by pharmaceutical firm Eli Lilly, raised The company boasts two candidates €300m ($339m) from the German in phase 1 clinical trials, each targeting government-owned development bank forms of cancer. However, it recently KfW. The transaction gave KfW a 23% announced it would concentrate on stake and came after the company developing a coronavirus vaccine. took a $90m loan from the European The second story was US-based vaccine Investment Bank in March. developer Vaxcyte’s $250m initial public

Corporate-backed deals in life sciences

2020 Q1 Q2 65 $2,957m 63 $3,000m

60 $2,500m $1,988m $1,840m 55 $2,000m Dollars

Deal count $1,500m 50 49 $1,616m 48 $1,000m 45 45 $1,116m $500m 40 40 $0m January February March April May

Source: GCV Analytics

www.globalcorporateventuring.com 29 Global Corporate Venturing July-August 2020

offering (IPO) on the Nasdaq Global synthesis platform partially based on Select Market, which gave an exit to technology licensed from Sutro. Its lead pharmaceutical firm Roche. Vaxcyte candidate VAX-24 is expected to enter issued more than 15.6 million shares, clinical trials and the IPO proceeds will pricing them at $16.00 each, after having also fund the expansion of Vaxcyte’s set a range of $14 to $16 for 14 million manufacturing resources. shares. The shares rose to $28.52 on the first day of trading. The company will Vaxcyte and CureVac are companies combine money it raised in March with from the broader life sciences space, the IPO proceeds and use it to further which has seen a lot of corporate clinical development of its lead drug interest over the past decade. It has candidate to combat pneumococcus, the not dissipated in the first five months of bacteria that causes pneumonia. 2020 with at least 40 deals each month and total estimated capital in rounds of Spun off by biopharmaceutical company no less than $1bn. This interest is likely Sutro Biopharma in 2013 and previously to continue during the pandemic and in known as SutroVax, Vaxcyte is developing the post-pandemic world if there are low vaccines using its cell-free protein interest rates.

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Mastercard buys Finicity for $825m > Credit scoring service Experian exited > Transaction includes $160m earn-out > Fintech has enjoyed uninterrupted growth since 2014

Robert Lavine Payment services firm Mastercard credit scores. Mastercard is planning News editor agreed to acquire US-based financial to integrate the product into its open data provider Finicity in an $825m banking offering. Kaloyan Andonov acquisition deal that provided credit Founded in 2000, Finicity has Analyst scoring service Experian with an exit. developed a digital budgeting platform The transaction includes $160m in earn- which provides data to help users outs for shareholders, depending on the manage their finances more effectively. company’s post-acquisition performance. It also features financial wellness Finicity’s technology powers Experian tools and application programming Boost, which allows customers to interfaces, or APIs, that allow connect utility bill payments to their businesses to build their own financial online bank accounts and improve data apps.

Corporate-backed deals in fintech

$14,644m 500 466 15K

14K 450 $12,553m 13K 392 400 $12,224m 12K 11K 350 $10,828m 318 10K 300 9K

8K 250 226 7K 175 $6,687m 200 181 6K

$5,193m 5K 150 119 4K 100 3K

$2,549m 2K 50 1K 0 0K 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 Source: GCV Analytics

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The company is part of the broader $14.64bn last year, clearly suggesting a fintech space which has enjoyed much rise in valuations. attention from corporate venture investors. Given the extensive investing in this space over the past half-decade, it is no surprise The number of corporate-backed deals we are beginning to see multimillion dollar in financial technology enterprises has exits. Fintech startups Plaid and Credit experienced uninterrupted growth from Karma were acquired in multimillion 2014 onwards, from 119 to 466 by 2019. dollar transactions by payment services The totals of estimated capital deployed Visa and accounting software developer also increased from $2.55bn in 2014 to Intuit, respectively, earlier this year.

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Sector report: IT IT sector keeps digitising the globe > Continued growth in number of deals and exits > Underlying digitisation trends may be reinforced by the pandemic > Rise in funding initiatives and many people moves

Kaloyan Andonov Innovation in IT today goes beyond the Reporter and analyst sector itself, with substantial spillover The GCV Analytics definition of the effects across virtually all other IT sector encompasses general Liwen-Edison Fu sectors. Whether it is smart homes, artificial intelligence applications, Supplements editor smart cities, smart factories, the big data and analytics, virtual and Internet of Things, connected vehicles augmented reality technologies, or software optimised with artificial semiconductors and microchips, intelligence (AI) and machine learning cybersecurity, enterprise and (ML), digitisation and its disruptive other software as well as other IT potential seem omnipresent. businesses. At the core of digitisation lies datafication and the rise of big data, as the ever- data analytics market was estimated at smarter internet-connected devices we $37.34bn globally in 2018 and forecast use generate enormous streams of data. to reach $105bn by 2027 at a compound Harnessing the potential and unlocking actual growth rate of 12.3%. big data, to extract relevant information and insights has been one of the major The expected growth will be driven more challenges. broadly by increasing volumes of data and the adoption of big data tools. The According to a 2020 report by authors also note that the complexity ResearchAndMarkets.com, the big and sheer quantity of data is clearly

www.globalcorporateventuring.com 33 Global Corporate Venturing July-August 2020

powered by mobile data traffic, traffic, spending on big data analytics was cloud-computing traffic and the adoption estimated at more than $180bn in 2019. of IoT and AI solutions by both consumers In 2020, 90% of surveyed business and businesses, noting that data are professionals said data and analytics ballooning exponentially with over 2.5 were key to their organisation’s digital quintillion bytes generated every day. transformation.

Big data tools are no longer just fancy Handling massive big data streams new technology but are becoming is unthinkable without the power of mission-critical for big businesses and AI, which is the other major factor in enterprises. According to a survey cited IT innovation globally. The media first by the report, the number of firms popularised buzzwords like “artificial investing more than $50m in big data intelligence”, “machine learning” and and AI tools rose from 27% to 33.9% “deep learning” (DL) a few years ago between 2018 and 2019 alone. Global and they have become part of everyday

Sector specialists knowledge in various sectors including Francis Ho and Shankar Chandran semiconductors, optics, networking are senior vice-presidents, managing and storage. directors and co-heads of Samsung Ho earned a PhD Catalyst Fund (SCF), a $500m in physics from evergreen corporate venturing for Stanford University, electronics manufacturer Samsung. where he was a SCF backs new data economy and National Science strategic areas on behalf of Samsung’s Foundation Francis Ho mobile, device and consumer Graduate Research electronics divisions. The technologies fellow, and in question include artificial holds seven US intelligence (AI), automated mobility, patents relating digital health, security and cloud to semiconductor infrastructure. technologies. Chandran had SCF’s recent investments included Shankar Chandran digital insurance provider Wefox been a technology Group in December last year, quantum investor for 15 computing technology developer years before Samsung. He began IonQ two months before, as well as his VC journey as a founding partner smart driving technology developer at venture firm Panorama Capital, Commsignia in August 2019. having also held multiple engineering, business development and In addition, SCF exited AI processor management roles at semiconductor developer Habana Labs, whose manufacturing technology provider acquisition by chipmaker Intel was Applied Materials and received eight announced in December 2019 for patents as the primary inventor. approximately $2bn. Chandran holds an MBA from Ho’s experience in venture capital, University of Pennsylvania’s Wharton business development, strategy School and a master of science in consulting, marketing and engineering materials science from Arizona State is combined with his broad operating University.

www.globalcorporateventuring.com 34 Global Corporate Venturing July-August 2020

business vocabulary. AI refers to any 26% boost in gross domestic product for instances of a machine performing tasks local economies. characteristic of human intelligence – from recognising objects and images Most interesting and controversial are through speaking languages to problem questions on AI side-effects on the solving. Machine learning is a specific economy and, particularly, on human kind of AI where a machine learns to labour. While we still appear to be perform a task without having been a long way from a robot-dominated explicitly programmed to do so. Deep planet, AI is set to drastically augment learning, in turn, is an approach to ML, human productivity in the next decades. inspired by the functioning of neural However, much of this will likely be networks in the human brain. accompanied by Schumpeterian “creative destruction”, need for reskilling of the Natural language processing deals with labour force and, naturally, feelings of extracting or generating meaning and fear and rejection. According to a survey intent from texts in a natural, readable cited in the 2019 Global Human Capital and grammatically correct form. Trends by Deloitte, 38% of respondents “Computer vision”, another branch of expected technology to eliminate jobs AI, is similar, but from visual elements, at their organisations within the next whether characters in text documents or three years, while only 13% thought faces and objects from images. automation would “eliminate a significant number of positions”. AI and ML are already yielding measurable results for businesses. Even studies from a few years ago, like the “Covid-19 showed people 2018 State of AI report by consulting and auditing firm Deloitte found nearly that while technology can 83% of organisations were seeing either augment and supplement “moderate” or “substantial” benefits from work, it does not replace cognitive technologies. For companies across sectors, the median return on what is needed from investment from cognitive technologies, humans” was 17% in 2017-18. The respondents Deloitte also reported that AI’s greatest benefits were enhancing current products, The impact of Covid-19 may be the optimising internal operations and catalyst for a more peaceful transition of making better decisions. the labour force to an AI-powered future. More recent reports suggest slight According to the 2020 Global Human retrenchment, such as the 2020 AI Capital Trends by Deloitte, the health predictions by consulting firm PwC. The crisis may have given a glimpse of the primary reason for it is “the need to way forward: “Covid-19 showed people focus on fundamentals before enlarging that while technology can augment and AI projects”. However, the consultancy supplement work, it does not replace does note that 90% of American what is needed from humans. The health executives “believe that AI offers more crisis gave people a greater appreciation opportunities than risks, and nearly half for the fact that humans and technology are expecting AI to disrupt either their are more powerful together than either geographical markets, the sectors in can be on their own. Consider how which they operate or both.” PwC also telemedicine, manufacturing, education, estimates the potential contribution of and even grocery delivery drew on the AI to the global economy by 2030 to be power of integrated human-machine $15.7 trillion, which would lead to a up to teams during the crisis.”

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Sector specialist technology provider Quinn Li has been overseeing Affirmed Networks Qualcomm Ventures, US-listed for $1.35bn. chipmaker Qualcomm’s corporate In addition, venturing arm, since 2016. Qualcomm exited In November 2018, he was promoted radio frequency from vice-president to senior VP for (RF) technology provider Cavendish the corporate. Kinetics in an acquisition of undisclosed size by RF equipment Li has cemented his reputation as a producer Qorvo in October 2019, leader in the venture community with a which came after cloud services string of deals and initiatives. The unit provider Cloudflare went public the made two China-based investments month before in a $525m initial public in 2020, backing healthy food supplier offering. and lifestyle service Boohee and electronic display technology provider Li joined Qualcomm Ventures in Yunyinggu. It also added US-based 2005 after roles at IBM, Broadcom artificial intelligence robotics technology and Lucent following completion developer Brain Corp and medical of his electrical engineering PhD at assessment technology developer Tyto Washington University in St Louis. He Care to its portfolio. said some of the biggest challenges he has had to overcome along the Qualcomm Ventures also scored way have involved finding the balance multiple exits in the past year, most between strategic and financial recently software provider Microsoft objectives while building the right team announced in March 2020 its with sufficiently diverse experience to intention to purchase mobile network expand investments into new areas.

While the successful combining of million and 160 million women worldwide humans and machines to battle a global may need to transition between crisis is a positive, there remains be a occupations by 2030 as clerical work, still need for workforces to improve their overwhelmingly done by women, is an skills. In 2019 survey from Deloitte, 84% area especially susceptible to automation of respondents thought automation (McKinsey Global Institute); automation is would require reskilling and were expected to displace 75 million jobs but increasing investment in retraining. generate 133 million new ones worldwide by 2022 (World Economic Forum). In 2019, Amazon announced that it would Despite the potential social impact, spend $700m to retrain about 100,000 with the strong tailwinds for AI, it is workers in the US by 2025, helping them perfectly conceivable it will continue to move into more highly skilled jobs. At the open opportunities for many emerging time, the New York Times observed that businesses, as it has during the latter Amazon was acknowledging “adances in part of the last decade. automation technology will handle many tasks now done by people”. And there are Digitisation inevitably brings significant different estimates of the potential impact digital threats that are addressed of AI: up to 20 million manufacturing by the cybersecurity sub-sector. Its jobs worldwide may be lost to robots by market growth has been driven by the 2030 (Oxford Economics); between 40 adoption of digital technologies across

www.globalcorporateventuring.com 36 Global Corporate Venturing July-August 2020

a wide range of industries as well as the would be impossible without cloud increased use of internet-connected computing and cloud infrastructure. mobile technologies by consumers in the Many data-driven and data-dependent past decade. In parallel, cyber-attacks businesses have either moved have also become more sophisticated. operations completely to the cloud or As analyst Steve Duplessie, founder of reduced their operational expenses on Enterprise Strategy Group, once said: private data centres. “Cybersecurity is a magnificent market because the problem can never be The 2020 State of the Cloud Survey, solved entirely. Fix one hole, the bad conducted by tech asset management guys find another. It is a ping-pong solution provider Flexera, found that match for hackers.” “enterprises continue to embrace multi- cloud and hybrid cloud strategies and This is likely to hold true even more in are already using more than two public the post-pandemic world, with more and two private clouds on average.” It people expected to work remotely. also points out that 93% of companies According to research by Centrify, 71% have a multi-cloud strategy and 87% of UK-based business decision makers have a hybrid cloud strategy. believe the shift to remote working has increased the likelihood of cyber-attacks. The Flexera survey also found that cloud spending will increase: “Respondents expect to increase cloud spend by almost 50% this year, but they still struggle to forecast spend accurately as they significantly exceed their cloud budgets. As a result, optimising existing cloud use remains at the top of companies’ 2020 priority list for the fourth year in a row, followed by migrating more workloads to the cloud. A majority of enterprises expect to increase cloud usage due to Covid-19.” Cybersecurity is becoming increasingly important While business operations migrate to the cloud, individual consumers According to estimates cited by Forbes are moving to a new space, enabled magazine, the global cybersecurity by virtual reality (VR) and augmented market was estimated at $173bn in 2020 reality (AR) technologies. It is unclear and expected to reach $270bn in the at present whether and to what extent next five to six years, noting that “77% the two technologies may converge or of cybersecurity spending will be for diverge in the process of becoming more externally managed security services”. marketable. According to a report by According to Forrester Research, research firm IDTechEx, the combined enterprises are expected to deploy markets of VR, AR and mixed reality (MR) $12.6bn on cloud security tools by 2023, are growing, and the three together were up from $5.6bn in 2018. Morgan Stanley expected to reach beyond $30bn by Research expects global IT security 2030. expenditures to reach $128bn, with endpoint security tools being 24% of all According to the latest 2020 Augmented cybersecurity spending. and Virtual Reality survey of consulting firm Perkins Coie, boom times may be With its burgeoning data and connectivity ahead for the industry, with nearly 200 of everything, today’s digitised world professionals representing startups,

www.globalcorporateventuring.com 37 Global Corporate Venturing July-August 2020

enterprise technology firms and computing power for all these investors all expressing strong optimism. developments in the sector. Before the The report notes: “Immersive gaming Covid-19 crisis, worldwide semiconductor is set to continue growing, but other, revenue had declined 12.2% in 2019 broader uses are too – meaning there to $418bn, according to consultancy can be no doubt that the market for XR International Data Corporation (IDC), technologies is growing and maturing at attributable to US-China trade tensions a rapid pace. The advent of smart city which grounded semiconductor initiatives by governments and business, demand. IDC noted: “Higher levels of and technology advocates around the inventory in specific areas like mobile world are also leading the charge for phones and cloud infrastructure brought increased XR adoption and market pricing pressure and negatively impacted growth. The survey results show that semiconductor sales. Driving the North America and Asia are ahead of the downturn were declines of 37.3% and pack in pioneering those initiatives and 27.7% in the DRAM and NAND markets, that city size is not the only factor driving respectively, after more than two years leadership in the area.” of strong growth.”

On the hardware side, it is chips and After the pandemic broke out, market semiconductors that enable sufficient research firm Gartner forecast that

Sector specialist Before joining M12, Nagraj Kashyap, corporate vice- Kashyap had been president of software producer at semiconductor Microsoft, leads its investment unit, technology M12, as global head. producer Qualcomm from M12 has already backed more than 1989 to 2014. 80 startups in North America, Israel, He joined Qualcomm’s corporate Europe, Australia and India, including venturing arm, Qualcomm Ventures, customer service software provider in 2003, where he oversaw the Directly, on-demand workplace training North America ventures team until provider GO1.com, artificial intelligence- 2007 when he was appointed senior equipped consultancy service provider vice-president and head of global FortressIQ and Onfido, a facial venturing. biometrics software developer. Kashyap began his career as a In addition, M12 invested in FarEye, software engineer at Nortel, Motorola the operator of a predictive logistics and 3Com/US Robotics before moving software platform, online fraud to management consulting firm PRTM, prevention technology provider Arkose now part of PricewaterhouseCoopers. Labs and digital wallet developer Bakkt. Kashyap earned an MBA from the Kashyap has been involved in VC, Northwestern University’s JL Kellogg software engineering, business Graduate School of Management, a development and management for master of science in computer science more than two decades, and is an from University of Texas at Austin and active mentor and thought-leader in a bachelor of engineering in computer the ecosystem. science from University of Mysore.

www.globalcorporateventuring.com 38 Global Corporate Venturing July-August 2020

due to its impact on semiconductor them (273) took place in the US, while supply and demand, global revenues 110 were hosted in Japan, 76 in China would decline 0.9% in 2020. Richard and 36 in India. Gordon, research practice vice-president at Gartner, said: “The wide spread of The majority of those commitments Covid-19 across the world and the (250) went to emerging enterprises resulting strong actions by governments from the same sector, mostly enterprise to contain the spread will have a far software, cybersecurity, big data analytics more severe impact on demand than and AI technologies. The remainder initially predicted…This year’s forecast went into companies developing other could have been worse, but growth in technologies in synergy with IT sector memory could prevent a steep decline.” incumbents: 106 deals in the services The non-memory segment is expected to sector (mostly human resources tech decline by 6.1%, while memory will grow and edtech), life sciences (mostly by 13.9%. healthcare IT and pharmaceuticals) and financial services (payment tech, Edge computing is another growth sector insurance tech and alternative lenders). which has been driven by digitisation and the rise of IoT. It is defined as a The co-investments of IT corporates distributed form of computing which show the broad variety of investment brings computer data storage closer to interests of the sector’s incumbents. The the location where needed. Computation commitments range from data services is performed, mostly or entirely, on and analytics (Trifacta, Portworx, Weka. distributed device nodes. According to a io) and AI and ML enterprise solutions report by ResearchAndMarkets.com, the (4Paradigm) through semiconductor global market size is anticipated to reach tech (Inrpria) and quantum computing $43.4bn by 2027, a CAGR of 37.4% over (IonQ) to 3D printing (Desktop Metal), the forecast period. We therefore expect IoT networks (FogHorn Systems) to HR to see more corporate-backed deals in services software (One Visa). this area. On a calendar year-on-year basis, total For the period between June 2019 and capital raised in corporate-backed May 2020, we reported 660 venturing rounds went down from $39.68bn in rounds involving corporate investors 2018 to $34.93bn in 2019, representing from the IT sector. More than a third of a 12% decrease. The deal count,

Global view of past year’s deals

Total: 660 Sector Consumer Energy 11 2 1 Financial Health 273 10 Industrial 7 3 76 110 IT 2 30 Media 36 Services 3 5 Telecoms 2 Transport 11 1 5 4 5 6 2

Source: GCV Analytics

www.globalcorporateventuring.com 39 Global Corporate Venturing July-August 2020

Investments of IT corporate venturers by sector

300

250 250

200

150

106 100 70 56 50 46 45 41 31 7 6 2 0 IT Services Media Health Financial Industrial Consumer Transport Energy TelecomsUnknown

Source: GCV Analytics

however, grew, by 12%, from 592 deals $18.86bn in 2018 to $22.21bn last year, in 2018 to the 665 tracked by the end of suggesting that valuations of emerging last year. tech enterprises were clearly on the rise.

The leading corporate investors Deals from the IT sector in terms of largest number of deals were diversified Corporates from the IT sector invested internet conglomerate Alphabet, in large multimillion-dollar rounds, raised internet company Tencent, cloud-based by enterprises from a variety of sectors enterprise software provider Salesforce, including services, transport, fintech and and electronics manufacturer Samsung. consumer. Five of the top 10 deals stood The list of IT corporates committing above the $1bn mark. capital in the largest rounds was headed Tencent invested $2bn to lead a $3bn by also by Tencent, Alphabet and series F round for China-based short- software developer Microsoft. form video streaming platform Kuaishou. The most active corporate venturing Private equity firms Boyu Capital and investors in the emerging IT businesses Yunfeng Capital, venture capital firm were Alphabet, chipmaker Intel and Sequoia Capital and Singaporean Salesforce. government-owned investment firm Temasek also participated, which The emerging IT businesses in the will reportedly value the company at portfolios of corporate venturers came approximately $28.6bn. Founded in from data tech (NS1, Sight Machine, Data 2011, Kuaishou has created an online Robot), cybersecurity (Spark Cognition, platform where users can upload, watch CyberGRX) through imagine processing and share short-form videos. Its biggest (Orbital Insights) to semiconductor competitor is TikTok, which is owned by technologies (Wiliot). digital media company ByteDance. The series F round was intended to be the Overall, corporate investments in last Kuaishou raise before launching an emerging IT-focused enterprises went up initial public offering. from 552 rounds in 2018 to 641 by the end of 2019, suggesting a 16% increase. China-based real estate platform The estimated total dollars in those operator Beike Zhaofang (also known rounds also grew by nearly 18% from as Ke.com) received roughly $2.41bn

www.globalcorporateventuring.com 40 Global Corporate Venturing July-August 2020

in a series D-plus round, featuring Magna International, car retailer telecoms and internet conglomerate AutoNation, which invested $50m, and SoftBank, which contributed $1bn, as venture firm Andreessen Horowitz. The well as Tencent. Other participants capital was the first external financing to included real estate platform hedge be raised by Waymo, which is working on fund manager Hillhouse Capital and VCl a unified autonomous vehicle that will firm Sequoia Capital China. The round combine internally developed technology reportedly valued Beike at slightly more in areas like cameras and lidar sensors than $14bn. Launched in 2017 by Lianjia, with versions of traditional automotive Beike has developed an online platform systems covering functions like brakes which provides users with access to and steering. The company was originally apartments for rent that span almost developed internally at Alphabet 100 Chinese cities. The platform uses (then Google) through its moonshot 3D modelling technology to enhance the technology development subsidiary, online viewing experience and is looking Google X, before becoming a standalone to build a 200 million-strong customer business in 2016. base spanning 300 Chinese cities. It also offers services such as interior Microsoft invested $1bn in US-based AI decoration, property management and research technology provider OpenAI in real estate financing. a bid to enhance its own work on artificial general intelligence (AGI) technology. Alphabet was among the investors that Founded in 2015 and overseen by a non- provided $2.25bn in funding for its US- profit organisation, OpenAI is working based autonomous driving technology on research that is intended to harness spinoff, Waymo. Silver Lake, Canada AI in responsible ways. The company Pension Plan Investment Board and is most focused on AGI, which could Mubadala Investment Company co- combine extremely high-level knowledge led the round, which also featured of many fields to devise solutions to automotive component manufacturer complex problems. Microsoft intends

Co-investments of IT sector venturers

Source: GCV Analytics

www.globalcorporateventuring.com 41 Global Corporate Venturing July-August 2020

Historical view of deals by IT corporates

$34,929m $39,678m 700 665 665 $40,000m $33,769m $32,057m 600 592 592 $29,248m 536 502 $30,000m 500

$19,042m

400 Dollars 354 Deal count 296 $20,000m 297 300 258 $15,941m 200 $10,000m $4,718m 100 $6,066m 0 $4,434m $0m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: GCV Analytics

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport to leverage the partnership to enhance for the company while TIS invested its cloud computing platform, Azure, $150m. News of the round came as making it better equipped for use in Grab was reported to be in talks to supercomputing and large-scale AI merge with Southeast Asia’s other large systems, and allowing it to create and ride hailing service, Gojek, in a deal that deploy more advanced AI models. would value the joint company at $23bn. Grab runs an on-demand transport Tencent co-led a $1bn series G round service spanning 339 cities across eight with investment management firm Southeast Asian countries, offering food Hillhouse Capital in China-based and package delivery, as well as payment online education platform Yuanfudao. services, lending, wealth management Private equity firm Boyu Capital and and insurance through the Grab Financial VC group IDG Capital also participated. Group subsidiary it launched in 2018. The funding was reportedly raised at a $7.8bn valuation. Tencent was a US-based digital payment tech provider returning investor. The Series G boosted Stripe increased the size of its series Yuanfudao’s overall funding to about G round to $850m after it scored $1.54bn. The company plans to channel an additional $600m from a host of the funding into improving the user investors featuring GV, the corporate experience, while ramping up R&D on AI. venturing unit of Alphabet. Remaining investors included VC firms Andreessen Spun out of social media platform Fenbi Horowitz, General Catalyst and Sequoia in 2014, Yuanfudao provides app- Capital – all of which had already taken based tutoring services that include part in its first $250m close in September live courses, homework help and mock last year. The funding was reportedly exam problems, covering primary and provided at the same $35bn pre-money secondary school age. Parents can also valuation and it is meant to support use track their child’s learning. growth in the company’s operations as Singapore-headquartered on-demand it deals with large amounts of offline ride provider Grab secured $856m commerce migrating online due to the in funding from IT services provider Covid-19 pandemic. TIS Intec’s TIS subsidiary and financial services firm Mitsubishi UFJ Financial Founded in 2010, Stripe has developed Group (MUFG). MUFG provided $706m a mobile platform that enables online

www.globalcorporateventuring.com 42 Global Corporate Venturing July-August 2020

merchants to accept payments areas. It will be electric-powered and is and oversee their businesses more expected to be able to travel some 240 effectively by providing assistance with kilometres on a single charge. functions such as fraud detection, revenue management and international India-based business e-commerce expansion. marketplace Udaan secured $585m in a series D round featuring Tencent and Automotive manufacturer Toyota Motor financial services firm Citi. Altimeter Corporation led a $590m series C round Capital, Footpath Ventures, Hillhouse for US-based airborne taxi developer Capital, GGV Capital, Lightspeed Venture Joby Aviation with an investment sized Partners and DST Global also took at $394m. The round also featured part in the round, which valued the Toyota’s strategic investment vehicle, company somewhere between $2.3bn Toyota AI Ventures, as well as Intel to $2.7bn, a person familiar with the Capital and JetBlue Technology Ventures, matter told TechCrunch. Citi invested investing on behalf of Intel and airline through its Citi Ventures unit. Udaan operator JetBlue respectively. Asset operates an e-commerce platform that manager Sparx Group, investment connects a network of about 25,000 firm Capricorn Investment Group, VC large wholesalers and traders to a firm AME Cloud Ventures, investment customer base of about 3 million smaller management firm Baillie Gifford and businesses, such as restaurants, farmers family office Global Oryx filled out the or local shops, facilitating the distribution round’s participants. Joby is working of a wide range of consumer goods. on a five-seat vertical take-off and Buyers and sellers can also access landing vehicle that will be able to carry credit and working capital through the passengers short distances in urban platform, and Udaan runs a supply chain

Top IT investors

By number of deals Alphabet 109 Tencent 15 63 Salesforce 49 Samsung 46 Intel 36 Microsoft 28 Qualcomm 25 Itochu 22 Dell 18 Bloomberg 17

By dollars Tencent $14,112m Sector Consumer Alphabet $7,630m Energy Financial Microsoft $2,703m Health Industrial Salesforce $2,583m IT Intel Media $1,965m Services Qualcomm $1,252m Telecoms Transport Samsung $1,154m TIS Intec Group $856m Itochu $781m Kuaishou $764m Source: GCV Analytics

www.globalcorporateventuring.com 43 Global Corporate Venturing July-August 2020

Top investors in IT

By number of deals Alphabet 44 Intel 24 Salesforce 24 Dell 17 Goldman Sachs 16 Samsung 16 NTT Docomo 15 SoftBank 15 Microsoft 13 Tencent 11

By dollars Tencent $4,122m Microsoft $1,854m Alphabet $1,505m Salesforce $1,460m Goldman Sachs $1,299m SoftBank $1,246m Intel $1,015m Kuaishou $734m Cisco Systems $729m Hewlett-Packard $509m Source: GCV Analytics

network that supports delivery. The on tutors and interactive content such series D cash will allow both services to as games to teach children English. be strengthened as it adds more product The funding will allow VIPKid to drive categories to its offering. content and technology development and recruitment, as well as improve China-based online tutoring platform operational and organisational VIPKid closed a series E round led by efficiencies. Tencent that was reportedly worth as much as $500m. Tencent was thought There were other deals in IT enterprises to have committed $150m to the round, backed by corporates from outside the although the corporate had briefly sector. withdrawn its support previously. VIPKid was reportedly targeting a $4.5bn US-based data analysis software provider valuation for the round but did not Snowflake secured $479m in a series G confirm any financial terms. round co-led by Salesforce’s corporate venturing arm, Salesforce Ventures, and Founded in 2013, VIPKid maintains an investment firm Dragoneer. The round online education portal that enables was backed by Altimeter Capital, Redpoint Chinese pupils to take English lessons Ventures, Sequoia Capital, Iconiq Capital, with tutors in North America through Madrona Venture Group and Sutter Hill one-on-one video chats. The service Ventures. Founded in 2012, Snowflake had grown to 700,000 students and has created a cloud-based platform 90,000 teachers. VIPKid also operates that allows users to search for data Lingo Bus, which runs immersive online from their own internal applications and courses for children to learn Mandarin cloud services providers. It also enables Chinese, and SayABC, which relies both users to create their own data exchange,

www.globalcorporateventuring.com 44 Global Corporate Venturing July-August 2020

allowing them to securely share data partners. It sells online education with others. Salesforce invested through products but still generates most of its a strategic partnership that will allow revenue from advertising. The series Snowflake’s users, which include Capital F proceeds will help Zhihu expand its One, JetBlue, Sainsbury’s and Adobe, to online ecosystem with help from Baidu access Salesforce data automatically on and Kuaishou, while it continues to the platform. develop its technology. It has now raised more than $890m. Livestreaming platform developer Kuaishou has led a $434m series F round US-based data analytics software for China-based online question-and- producer Databricks completed a $400m answer service Zhihu. Internet groups series F round, which included Microsoft, Baidu and Tencent also contributed a returning corporate investor. The to the round along with private equity round reportedly valued it at $6.2bn firm Capital Today. The transaction and was led by VC firm Andreessen reportedly valued the company at Horowitz. It also featured venture firms almost $3.5bn. Founded in 2011, Zhihu Alkeon Capital Management, Coatue runs an online platform where users Management, Dragoneer Investment can source answers to questions from Group, Geodesic Capital, Green Bay an online community made up of 220 Ventures, New Enterprise Associates million registered users. The company (NEA) and Tiger Global Management, also hosts forums, an online publishing among others. service and livestreamed Q&A sessions The new funding will permit the from verified experts and business company to scale R&D activities and

Corporate co-investments in IT sector

Source: GCV Analytics

www.globalcorporateventuring.com 45 Global Corporate Venturing July-August 2020

IT sector deals by subsector $22,214m 700 641 22K 650

600 552 98 20K

550 $18,861m 18K 502 74 500 442 $15,547m 92 458 51 16K 450 94 $13,516m 48 14K 400 382 101 94 84 12K Deal count 350 82 Dollars 95 287 68 61 $11,095m 300 95 10K $9,078m 85 76 83 64 $9,411m 250 31 8K 83 37 202 34 200 76 79 167 42 49 6K 77 150 129 35 34 38 4K 100 40 $3,592m 193 149 110 2K 50 $2,273m 97 93 82 95 $1,753m 56 60 0 46 0K 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Artifical intelligence Big data & analytics Cybersecurity Enterprise software

Internet of things (software) Semiconductors and chips VR and AR technology Other (IT) Source: GCV Analytics

accelerate its international expansion. Venture Partners, Accel, Base Partners, Databricks intends to invest €100m Geodesic Capital and Social Capital also ($111m) into its Netherlands-based contributed to the round, which the European Development Center. company said valued it at almost $3bn. Founded in 2013, Databricks has Founded in 2012, Netskope has built a developed a big data analytics platform platform called Netskope Security Cloud based on Apache Spark which enables that offers visibility of, and protection corporate clients to connect their data from, security threats across cloud science and engineering teams so they services, apps and websites in real time. can prepare data more thoroughly for The round comes after a year when the analytics and processing on a large company opened a new head office and scale. The company boasts more than satellite offices across the US, France, 2,000 corporate customers and claims Brazil and Japan while entering new its annual recurring revenue is higher markets including Brazil, Australia, Italy, than $100m. It released a version of Spain, Germany, Singapore and Mexico. the product customised for Microsoft’s Azure cloud computing platform in Tencent co-led a $300m series E round late 2017 in collaboration with the for China-based big data software corporate. provider MiningLamp. The round was co- led by Singaporean government-owned Netskope, a US-based cloud investment firm Temasek and also cybersecurity software provider backed featured video streaming app developer by computing technology producer Kuaishou and undisclosed additional Dell, completed a $340m funding round investors. MiningLamp produces big data led by VC firm Sequoia Capital’s Global mining technology that sources large Equities unit. It also featured Sapphire volumes of raw data and uses artificial Ventures, the venture firm spun off intelligence to produce information from software producer SAP. Canada from it that can be used by customers Pension Plan Investment Board, Iconiq in government and a range of private Capital, PSP Investments, Lightspeed sector industries. The company will put

www.globalcorporateventuring.com 46 Global Corporate Venturing July-August 2020

Top 10 deals by IT corporate investors June 2019-May 2020

Top investments in emerging IT enterprises June 2019-May 2020

the funding into growing its business featured SoftBank Investment Advisers, in addition to R&D and increasing the division of SoftBank that manages headcount. It also intends to create a its $98.6bn Vision Fund and investment smart marketing platform. banking firm Goldman Sachs. Founded in 2013, Automation Anywhere has created Salesforce led a $290m series B round an intelligent automation platform that for US-based robotic process automation enables organisations to automate some (RPA) technology producer Automation repetitive or manual processes using Anywhere through its Salesforce software bots. The product combines Ventures subsidiary. The round valued RPA with analytics tools, and AI and ML Automation Anywhere at $6.8bn and also technology. The company has also built

www.globalcorporateventuring.com 47 Global Corporate Venturing July-August 2020

a version tailored for Salesforce users products which can be used in public called Automation Anywhere Salesforce safety and urban management. The Connector. company targets governmental and private business customers. Online insurer ZhongAn Online put in $145m and property manager GitLab, a US-based software Sinolink Worldwide invested $139m. development platform backed by The round raised RMB1.9bn ($285m) Alphabet, closed a $268m series E and means ZhongAn Online will round co-led by investment bank continue to hold a 51% stake in the Goldman Sachs and multi-family office business, with Sinolink retaining the Iconiq Capital. Y Combinator took part other 49%. ZhongAn Technology was in the round through its Continuity launched in 2017 to focus on the Fund and was joined by Adage Capital development of blockchain, AI, big data Management, Alkeon Capital, Altimeter and cloud computing technology in Capital, Coatue Management, D1 Capital the financial services space. In addition Partners, Franklin Templeton, Light Street to bolstering development, the new Capital, Tiger Global Management and capital will be used to fund investments Two Sigma Ventures. Founded in 2014, and strengthen cooperation with GitLab provides a development and international partners. operations platform that supports the entire lifecycle of software development China-based internet-of-things (IoT) from creating, verifying, packaging and technology developer Terminus releasing to monitoring and configuring Technologies raised RMB2bn ($283m) code. The platform is used by more than in a series C1 round, which featured 100,000 clients, and GitLab plans to use three corporate investors, including the series E capital to further develop e-commerce firm JD.com, property- the product and to drive recruitment focused conglomerate Wanda Group and across its product, marketing, sales and voice recognition technology producer administrative teams. iFlytek. The round was led by asset manager China Everbright and backed by undisclosed additional investors. Exits Founded in 2015 and incubated by Corporate venturers from the IT sector China Everbright, Terminus Technologies completed 91 exits between June 2019 develops AI-enabled industrial IoT and May 2020 – 72 acquisitions, 14 initial

Global view of exits

Total: 91 Sector Consumer Energy Financial Health 66 Industrial 3 IT 1 4 Media Services 4 3 Telecoms 2 Transport

Source: GCV Analytics

www.globalcorporateventuring.com 48 Global Corporate Venturing July-August 2020

Historical view of exits of IT corporate venturers

$51,364m $52,231m 102 100 $50,000m 91 91 87

80 $40,000m 73 72 71 64

60 $30,000m Dollars

Deal count $23,958m 46 $20,444m $31,423m 40 37 $20,000m $22,004m

$3,003m $15,207m 20 $12,514m $13,154m $10,000m

0 $0m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

public offerings (IPOs), four mergers and Online food delivery service Delivery one stake sale. Hero agreed to buy South Korea-based counterpart Woowa Brothers in a $4bn Accounting and tax preparation software deal that will allow internet companies provider Intuit agreed to purchase Naver and CyberAgent to exit. Woowa US-based credit management platform Brothers has built an app-based food developer Credit Karma for $7.1bn ordering service that was responsible in cash and stock, giving Alphabet an for 365 million orders in the year ending exit. The conglomerate first backed September 2019. It has more than Credit Karma via its CapitalG venturing 110,000 restaurant partners and made subsidiary in an $85m series C round in approximately $275m in revenue in 2014. The transaction involves almost 2018. Delivery Hero intends to expand its $1bn in equity awards which will be Korean activities through the acquisition issued in the next three years. The and access areas where Woowa Brothers price of the acquisition nearly doubled is active, such as cloud kitchens and the $4bn valuation, at which the Credit adjacent on-demand services. Karma raised its last round sized at $500m in 2018. The acquisition would be Alphabet agreed to pay $2.6bn to acquire the largest in Intuit’s 37-year history. Looker, a US-based data analytics technology provider backed by CapitalG, Founded in 2007, Credit Karma has the corporate venturing unit formerly developed which allows its users to get known as Google Capital. Looker has free access to their credit scores once built a platform that can take business a week and online identity status in intelligence data from a range of sources addition to filing their taxes and finding and use a proprietary data modelling credit card and consumer loan deals. code language to unify it, allowing The platform has attracted 100 million it to be used in other applications, users, 90 million of whom are from analysed together more thoroughly the United States. Its business model and more easily shared. The company’s is based on referral fees it charges technology will be added to Google’s businesses for financial products and cloud computing services provider, services it recommends to its users.

www.globalcorporateventuring.com 49 Global Corporate Venturing July-August 2020

Google Cloud, expanding the breadth will retain an adviser position both at of its business analytics capabilities and Habana and Intel in general. enabling users to quantify data from different sources using the same metrics. Salesforce agreed to acquire one of its portfolio companies, US-based customer Intel acquired one of its portfolio relationship management (CRM) software companies, Israel-based deep learning provider Vlocity, for $1.33bn in cash. The technology provider Habana Labs, transaction will include the company for $2bn. Founded in 2016, Habana assuming unvested equity awards held develops artificial intelligence processors by the latter’s employees. The price was that enhance the performance of described as net of the value of shares models constructed to train AI systems. currently owned by Salesforce. The It launched its second processor, the acquisition is expected to close in 2021 scalable Gaudi system, in June this and professional services firm Accenture year. Navin Shenoy, general manager of and insurance provider New York Life Intel’s Data Platforms Group, said: “This will also exit. Founded in 2014, Vlocity acquisition advances our AI strategy, has created a range of CRM apps that which is to provide customers with fit on top of the Salesforce platform but solutions to fit every performance need which are tailored for specific industries – from the intelligent edge to the data such as communications, media and centre.” The company will continue to entertainment, energy and utilities, operate independently, but as a division healthcare and insurance, as well as of Intel. Its chairman, Avigdor Willenz, government work.

Exits by IT corporate investors June 2019- May 2020

Source: GCV Analytics

www.globalcorporateventuring.com 50 Global Corporate Venturing July-August 2020

Top exits from IT enterprises, June 2019-May 2020

Source: GCV Analytics

Private equity firm Hellman & Friedman devices, smart televisions or full-scale agreed to acquire a majority stake industrial or building systems. VC fund in Checkmarx, a US-based software Iris Capital and assorted angel investors security technology provider backed provided approximately $1.1m for Armis by Salesforce, at a $1.15bn valuation. in 2017 before the company added Founded in 2006, Checkmarx has $6.7m from VC firm Elaïa Partners developed a platform that reduces and unnamed existing backers. The and fixed vulnerabilities in software company subsequently raised $30m applications during development in an April 2018 series B round co-led process. It can be deployed on premises, by VC fund Red Dot Capital Partners in the cloud or in hybrid environments and Bain Capital Ventures, the VC arm and is used by more than 1,400 of private equity firm Bain Capital, and customers across 70 countries. backed by VC firms Tenaya Capital and Sequoia Capital. CapitalG, Alphabet’s growth equity arm, agreed to provide $100m as part of App delivery services provider F5 a $1.1bn acquisition of France-based Networks agreed to acquire US-based cybersecurity software provider Armis anti-fraud technology developer Shape by growth equity firm Insight Partners. Security in a $1bn deal that will enable Insight Partners will put up the majority corporates Alphabet, Hewlett Packard of the cash for the transaction, with Enterprise (HPE), JetBlue and SingTel “rollover” from undisclosed existing to exit. Shape’s software uses artificial investors. Armis produces security intelligence, machine learning and software for enterprises operating IoT analytics helps to protect businesses or unmanaged devices, such as mobile from online attacks and fraud instituted

www.globalcorporateventuring.com 51 Global Corporate Venturing July-August 2020

through bots capable of bypassing which can modulate gene expression. conventional barriers. They are intended to complement Alkermes’ range of treatments for central Networking equipment manufacturer nervous system diseases. Cisco agreed to acquire ThousandEyes, a US-based network management GCV also reported several exits of software provider backed by Alphabet emerging IT-related enterprises that and Salesforce. The price was reported to involved corporate investors from be approximately $1bn. Founded in 2010, different sectors. ThousandEyes provides cloud analytics software that collects data from a range CrowdStrike, the US-based endpoint of access points, such as data centres and protection software provider backed consumer devices, to identify potential by Alphabet, cloud services provider sources of disruption and ensure RackSpace and telecoms company websites, applications and services are Telstra, raised $612m when it went delivered optimally. Cisco will integrate public. The company issued 18 million the company’s technology into its new shares on the Nasdaq Global Select Networking Services division and expects Market priced at $34 each, higher than the combined capabilities to help clients the $28 to $33 range it had set. Those accelerate their digital transformation. terms had been increased from $19 to $23. The IPO valued CrowdStrike at approximately $6.82bn. Founded in 2011, CrowdStrike has built an AI- equipped, cloud-based cybersecurity platform that detects and prevents cyber-attacks at the endpoint, on laptops and desktops as well as servers and connected devices. The company’s net loss increased slightly to $140m in the year running up to the end of January 2019, but it more than doubled revenue to almost $250m over the same time.

ThousandEyes’ path visualisation tool Banking software producer Temenos agreed to pay at least $559m to acquire Kony, a US-based mobile banking Biopharmaceutical company Alkermes software developer backed by telecom agreed to acquire US-based neurological firms SoftBank and Telstra. The deal disease drug developer Rodin consisted of $559m upfront and a Therapeutics for up to $950m, enabling $21m earn-out. Founded in 2008, Kony medical group Johnson & Johnson operates a cloud-based platform that and Alphabet to exit. The transaction allows enterprise clients to develop comprised $100m in cash upfront and up and deploy applications that enable to $850m in milestone payments related customers to signing up for accounts, to regulatory and clinical progress and accessing loans and making payments pre-set sales levels. Rodin is developing quickly and efficiently at any time of day. treatments for neurodegenerative The company’s offering includes Kony diseases like Alzheimer’s disease, Lewy Quantum, an app development tool for body dementia, Huntington’s disease and financial services providers that requires frontotemporal dementia as well as sickle minimal coding. Temenos bought Kony in cell disease and cancer. The company’s a bid to bolster its scale and capabilities small molecule therapeutics will rely on in the US and accelerate Temenos targeting selected protein complexes Infinity, a digital front-office product that

www.globalcorporateventuring.com 52 Global Corporate Venturing July-August 2020

is already used by more than 500 clients investing in the IT sector secured over in the financial services sector. $12bn in capital via 37 funding initiatives, which included 28 VC funds, four new Scout RFP, a US-based developer of CVC subsidiaries, two accelerators and a sourcing platform for businesses, one other initiative. agreed to a $540m acquisition by one of its existing investors, enterprise On a calendar year-to-year basis, the software producer Workday. The all-cash number of funding initiatives in the IT transaction will allow Salesforce Ventures sector went up slightly from 69 in 2018 and GV, the corporate venturing divisions to 72 last year, though significantly for Salesforce and Alphabet, to exit. The down from the peak of 148 2016. The deal is expected to close by the end total estimated capital also increased of January 2020, subject to customary – it stood at $16 bn by the end of closing conditions. Founded in 2014, last year, from the $9.78bn in 2018. Scout runs a cloud-based platform for This substantial increase in the totals, procurement staff to manage sourcing however, is a bit of an illusion because of and supplier engagement, collaborate an outlier-sized fund in 2019 (the $8.5bn with relevant parties and handle a TA XIII fund which has tech among its pipeline of projects. Employees will join sectors). Workday, which expects the platform to complement its Workday Procurement China-based internet and gaming group and Workday Inventory. Beijing Kunlun Technology established a RMB3bn ($424m) VC fund with investment manager Beijing Huayu Funds Tianhong. The two are the cornerstone For the period between June 2020 and investors for Kunlun (Beijing) Internet May 2020, corporate venturers and Intelligent Industry Investment Fund

IT funding initiatives

160 148 144 140 22 21 120 110 32 25 11 101 100 12 12 23 14 80 13 69 72 12 13 60 12 Number of initiatives 40 79 73 60 59 51 20 44 16 0 140K $123,507m 120K

100K

80K

60K $118,969m

40K

Amount raised ($m) $25,657m $16,072m 20K $13,456m $12,006m $9,779m $22,471m 0K $1,617m 2014 2015 2016 2017 2018 2019 2020

Accelerator CVC Unit Incubator Other VC fund Source: GCV Analytics

www.globalcorporateventuring.com 53 Global Corporate Venturing July-August 2020

Top IT funding initiatives, June 2019-May 2020

Source: GCV Analytics

and will each provide RMB1bn. A Kunlun producer Zeiss are limited partners in subsidiary known as Xinyu Shijie Wuji the new fund, as are private equity firm Investment Management is chipping in HarbourVest Partners and investment RMB10m and will be general partner. manager Neuberger Berman. The new Founded in 2008, Kunlun specialises in fund will invest at growth stage, providing mobile and web browser-based games $5m to $50m in funding to enterprise but its subsidiaries include Opera, the software developers operating in areas mobile browser it acquired in 2016. The like 5G technology, the internet of company bought gay hook-up app Grindr things, cloud and network infrastructure, the same year and agreed a $608m deal artificial intelligence, cybersecurity and to sell it earlier, representing a four times marketing. It will also back other funds. return. The fund is targeting developers of internet and artificial intelligence Singapore-based VC firm Vertex technology but Kunlun has not disclosed Ventures closed its Vertex Growth more details. Fund at $290m with backing from LPs including computer touchpad DTCP, the investment arm of Germany- manufacturer Elan Microelectronics. The based telecoms firm Deutsche Telekom fund surpassed its original $250m target formerly known as Deutsche Telekom and was also backed by Vertex’s state- Capital Partners, secured external owned parent firm, Temasek, as well as investors for its $350m fund. The unnamed institutional investors, family corporate launched the first fund in 2014 offices and funds from Southeast Asia as a successor to T-Venture, which had and Taiwan. been its corporate venture capital (CVC) arm since 1998. The parent company Founded in 2015, Vertex now has a supplied $140m at the time, meaning the total of six independently-run VC funds total it provided across various funds was spanning Southeast Asia, China, India the $620m. South Korea-based telecoms US and Israel. It has about $3bn in assets firm SK Telecom and optical systems under management and has invested

www.globalcorporateventuring.com 54 Global Corporate Venturing July-August 2020

in more than 200 companies. Vertex new LPs like brewery owner Bitburger, Growth Fund invests $10m to $15m cleaning device provider Kärcher and per company and largely takes part in a shoe retailer Deichmann. Founded in company’s third or fourth funding round, 1999, E.ventures invests in financial though it has the mandate to provide and software-as-a-service technology $3m to $4m in earlier-stage deals developers, using proprietary technology through affiliate vehicles, according to to assess possible targets as well as Vertex Venture Holdings chief executive consumer. It maintains offices in Europe Chua Kee Lock. The vehicle has a global and the US and has partners located in remit but is focused on high-growth China, Japan and Brazil. The new funds areas in specific markets, such as will both look to provide between $1.5m cybersecurity in Israel or consumer- and $10m for each deal in which they related technologies in China and participate, seeking out companies from Southeast Asia. pre-series A to series B stage. E.ventures now has a total of $1.6bn under UK-based investment firm Ahren management. Innovation Capital closed its inaugural vehicle at more than £200m ($253m) from LPs including consumer goods conglomerate Unilever, insurance firm Aviva and broadcaster Sky. The LP list also featured diversified holding group Wittington Investments, undisclosed US families, and individual investors including André Desmarais, Carlos Rodriguez-Pastor and the eight scientists who co-founded the vehicle. The fund had reached a $129m first close in Brewery owner Bitburger invested in September 2018. E.ventures’ fund Founded in 2017, Ahren Innovation Singapore-based VC firm Jungle Ventures Capital focuses on technologies covering closed its latest fund at $240m, securing the human brain and artificial intelligence, the capital from limited partners genetics and biotechnology, space and including Cisco Investments, a subsidiary robotics, and energy and environmental of Cisco Systems. Bualuang Ventures, technologies. The firm both invests in and the CVC arm of Bangkok Bank, is also helps build companies, offering access an LP, as are Temasek, the World Bank’s to the expertise of its founding science International Finance Corporation, partners. It is in particular seeking out development finance institutions DEG opportunities that take a multidisciplinary and FMO, and Kuok Khoon Hong, approach to tackle challenges. chief executive of agribusiness Wilmar A host of corporate LPs have contributed International. Jungle Ventures III is the to two funds launched by Germany-based firm’s third Southeast Asian fund, and VC firm E.ventures that totalled $400m. the close includes $40m from separately The vehicles in question were a $225m managed account commitments. It fund that invests in the US out of an office will focus on digital consumer brands, in San Francisco, and a $175m Europe- enterprise software and local developers oriented fund based in Berlin. Existing of technology that can be scaled backers including mail-order retailer Otto worldwide. Group, supermarket chain Lidl, packaged DG Daiwa Ventures, the VC fund formed food producer Dr Oetker and automotive by internet company Digital Garage manufacturer Porsche were joined by

www.globalcorporateventuring.com 55 Global Corporate Venturing July-August 2020

and investment bank Daiwa Securities, is intended to invest in 15 to 25 India- launched a ¥20bn ($188m) investment focused VC funds, with the resulting fund. DG Lab Fund II will target companies capital eventually boosting sectors across the world that are developing such as the internet-of-things, artificial next-generation technologies and will intelligence, business-to-business work with DG Lab, the fund’s open software and robotics technology. innovation research and development unit, on selecting portfolio companies. US-based financial technology provider The fund’s main areas of interest are FIS announced a $150m commitment blockchain, artificial intelligence, virtual to CVC subsidiary FIS Ventures. The and augmented reality, security and $150m represents a target level for the health-based biotechnology. The capital unit’s investment over the next three allocation is expected to last 10 years. years, and its priority areas include Digital Garage and Daiwa are the general distributed ledger technology, financial partners while 10 to 20 limited partners, inclusion, artificial intelligence and including telecommunications firm KDDI, machine learning, data and analytics, e-commerce company Kakaku, insurer security, privacy, digital enablement and Sompo Japan Nipponkoa and financial automation. The announcement marked services firm Sumitomo Mitsui Trust, will the official launch of FIS Ventures, contribute approximately $4.7m to $19m though the company revealed in January each. 2020 that the unit would be overseeing the fifth iteration of its FIS Fintech Accelerator. FIS Ventures’ first deal was in the $35m series B round closed by Africa-focused payment technology provider Flutterwave. The unit also participated in a $6m series A for distributed ledger technology developer Billon Group.

University backing

Automotive manufacturer Suzuki invested in DG By the end of 2019, there were 114 Daiwa Ventures’ fund rounds raised by university spinouts, down 16% from 135 the previous year. Investment manager Reliance Nippon The level of estimated total capital Life Asset Management (RNAM) will deployed in 2019 stood at $2.19bn, up manage a $187m fund of funds backed 61% from the $1.36bn in 2018. by several Japan and India-based Most notably in 2019, there was a mega- corporates. The LPs for the vehicle, Indo- acquisition of a company that traces Japan Emerging Technology & Innovation, its origins to academia. Tableau, a US- include insurance firm Nippon Life, based data visualisation and analytics automotive manufacturer Suzuki, spinout of Stanford University, agreed financial services firm Mizuho Bank to an acquisition by enterprise software and state-owned financial institution producer Salesforce for $15.7bn. Tableau Development Bank of Japan. RNAM had a $10.79bn market cap when the is promoted by Japan-based Nippon deal was signed. Trading of the stock had Life and Reliance Capital, the financial been halted in light of the acquisition services arm of India-headquartered news. Founded in 2003, Tableau Software conglomerate Reliance Group. It holds has developed data visualisation 85.8% of the fund’s share capital. Indo- technology capable of extracting data Japan Emerging Technology & Innovation from a wide range of sources, including

www.globalcorporateventuring.com 56 Global Corporate Venturing July-August 2020

Deals in IT university spinouts

$2,194m

$1,615m

$1,364m

$1,094m $1,108m $1,010m

$810m

$311m

2013 2014 2015 2016 2017 2018 2019 2020

135

114

89 89 79 80

57 53

2013 2014 2015 2016 2017 2018 2019 2020

Source: GCV Analytics

relational databases, spreadsheets and Internet Investment Fund. Spun out of cloud databases, in order to generate Chinese Academy of Sciences in 2015, graphs. The company’s underlying CloudWalk produces facial recognition technology, VizQL, was developed at software and hardware that is used Stanford University’s Department of by police departments in more than Computer Science between 1999 and 30 provinces across China as well as 2002 by Pat Hanrahan with Chris Stolte financial services, aviation and security and Christian Chabot. companies nationally.

China-based facial recognition SambaNova Systems, a US-based technology developer CloudWalk artificial intelligence system developer obtained RMB1.8bn ($254m) in a co-founded by Stanford University funding round backed by Haier Financial faculty, received $250m in series C Holdings, a unit of home appliances funding led by funds and accounts manufacturer Haier. A range of national managed by investment firm BlackRock. and municipal government-owned Intel Capital and GV, respective entities also contributed, including subsidiaries of Intel and Alphabet, also investment company Guosheng Group, took part in the round, as did VC firms financial services firms Nansha Financial Walden International, WRVI Capital and Holding and Industrial and Commercial Redline Capital. SambaNova was formed Bank of China, as well as the China to bring cutting-edge AI technology to

www.globalcorporateventuring.com 57 Global Corporate Venturing July-August 2020

products that can be used by a wider to address innovation and investment range of organisations. Its lead product challenges in meaningful ways and is an optimisable platform that combines mentor the next generation of leaders. hardware and software to run compute Sessions had spent more than a decade and data-intensive applications across a being responsible for portfolio business range of systems. The company’s co- development, marketing, press relations, founders include Stanford University events and information services professors Kunle Olukotun, and operations for Intel Capital. Christopher Ré. Microsoft appointed Brandon Middaugh to manage the $1bn Climate Innovation People Fund it had announced. Microsoft Keith Larson, vice-president and pledged $1bn for the vehicle as part of a managing director of Intel Capital, retired wider goal to achieve carbon neutrality in April. Larson, who had spent nearly by 2030, and to remove the equivalent 23 years at the unit, was one of five of the excess carbon it has emitted voting executives on the investment since its launch by 2050. The fund will committee responsible for approving all invest in developers of carbon reduction its investments. Larson cited a focus on and removal technology, though the sustainability along with its parent’s size corporate – which already owns VC and strength as the reasons Intel Capital unit M12 – has not revealed details of a was able to create a long-term strategy. timeframe nor the range of its portfolio. That approach has helped Intel nearly Middaugh will manage the fund and quadruple its annual revenue from about investment strategy, having spent four $20bn in 1996 to $70.8bn in 2018. years at Microsoft as a senior program manager, leading its distributed energy Lee Sessions, former managing strategy as part of the company’s energy director for global corporate venture and sustainability activities. relationships at Intel Capital, joined Global GCV as its first executive-in- Ram Jambunathan was promoted to residence. The position will involve head of corporate strategy at Germany- advancing corporate venturing and based software provider SAP. The innovation (CV&I) industry growth and promotion allowed him to retain his success. Sessions was a founding role as managing director for corporate member of the GCV Leadership Society venturing unit SAP.iO, responsible for Advisory Board in 2016 to bring together investing in and accelerating early-stage influential corporate venture investors external startup innovation.

IT sector power ranking 0 . 4 5 8 . 8 7 5

80.0 . 1 7 1 . 2 7 . . 9 7 6 5 5 60.0 5 4 8 . . n d e x I 7 6 4 4 2 2 . .

40.0 2 1 3 1 4 5 9 2 ...... 1 1 P o w e r 1 9 5 6 4 9 9 4 3 3 2 1 2 2 2 1 1 Median 2 28.6 t 3 3 n . e . t a 8 n 7 n 1 r p l i s y 1 m e t e t g 20.0 c e f t s r t - d m J a e n t n U n r t o n A g I m b s o y w e p r o o u s u n e a s f l c o o e u e o c e l O o h P a c k a l n w l e i v e o m l e k a h n e c h r r S i c r t u M e I o n t G S y s t P a 0.0 A l p T S a M I S a I Q S A D e C y b C i s c o K a H o Y a S t T N i h G H e 1 2 3 4 5 6 7 8 9 1 0 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0

Source: GCV Analytics

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Shinji Asada moved on from his position Matthew Olton left his role as senior as head of Salesforce Ventures Japan, vice-president of corporate development a CVCsubsidiary of Salesforce, to for US-based cybersecurity technology co-found venture firm One Capital. supplier Symantec. He has been Recipient of a GCV Emerging Leaders appointed senior vice-president of award in 2020, Asada’s role at Salesforce strategy and corporate development involved sourcing new deals, conducting at Tenable, and his responsibilities will due diligence and providing thought include addressing security technology leadership in portfolio companies’ board issues to help customers manage meetings. Asada began his career at cybersecurity risk. Symantec hired Olton trading group Itochu where he spent in April 2018 and he conducted mergers more than a decade in different roles and acquisitions and corporate venturing from new business development and deals during his time at the company. mergers and acquisitions to system integration and software-as-a-service sales, before joining CVC unit Itochu Technology Ventures in 2012.

İskender Dirik, the chief executive of Microsoft’s continental Europe scaleup accelerator, joined Samsung’s corporate venturing unit, Samsung Next, as managing director. Still based in Berlin, Dirik said he would help to define its focus areas for Europe. Dirik had previously been MD for Bauer Venture Partners, the €100m ($110m) CVCl fund for Bauer Media, a media company focusing on magazine publishing and radio broadcasting. At Samsung Next, Dirik will Rob Salvagno join Europe-based colleagues including Nick Migam in Berlin and Mario Branciforti and Christina Bechhold Russ in London. Rob Salvagno left his position as head Barrett Parkman joined Samsung’s US- of networking equipment manufacturer based Catalyst Fund as director of its Cisco’s corporate venturing subsidiary, startup and VC ecosystem. Catalyst is Cisco Investments, to join private Samsung Electronics’ $500m evergreen equity firm KKR. Salvagno had worked multi-stage CVC fund investing globally in for Cisco for over two decades from the data economy and core technologies late 1999, managing VC and mergers in new Samsung business areas. The and acquisitions deals on its behalf, company has other corporate venturing and held the role of head of corporate units, including Samsung Next and development alongside his leadership Samsung Venture investment Company. of Cisco Investments. The post involved Parkman had been a partner at GWC overseeing the launch of Cisco-sponsored Innovator Fund, an early-stage VC fund VC firm Decibel in April 2019 and the that primarily invests in AI and data- acquisition of cybersecurity technology centric startups in the US, China, Israel, producer Sentryo two months later. Other and India and where he led 19 of its 31 key deals during Salvagno’s time included investments, including Tapzo (acquired the purchases of AppDynamics for $3.7bn by Amazon) and FriendlyData (acquired in 2017 and Duo Security for $2.3bn the by Service Now). following year.

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Cathy Gao left Axa Venture Partners, a January 2019 that during his time at Intel corporate venturing vehicle for insurance Capital he participated in deals totalling and financial services group Axa, to more than $200m and sat on the boards become a vice-president at Sapphire of portfolio companies Cloudian – also Ventures, the VC firm backed by software part of NTT Docomo Ventures’ portfolio – producer SAP. Gao will focus on the LeapMind, Gengo and Fileforce. enterprise software, security and vertical software segments. She had been an Rashmi Gopinath left her managing investor at Axa Venture Partners since director role at M12, Microsoft’s January 2017, covering deal spaces such corporate venturing arm, and joined as enterprise software, internet, digital VC firm B Capital Group as a general health and financial technology. Before partner. Gopinath began her corporate joining Axa, Gao worked in business venturing career at Intel Capital, operations and strategy for financial chipmaker Intel’s investment vehicle. services firm Gusto between for roughly She spent two years there from 2011 18 months to the end of 2016. Gao focusing on cloud infrastructure, began her career in 2010 as a merger cybersecurity and enterprise software and acquisition analyst for private equity deals. The nascent M12 (then known as firm Blackstone Group, before leaving in Microsoft Ventures) brought Gopinath 2012 to join the team at growth equity on board in 2016 and she was tasked firm TA Associates. with investing in companies in similar domains, such as cloud-based data Weeks after leaving Alphabet’s GV unit, platforms CloudLanes, Frame and Vineeta Agarwala became one of the Paxata, all of which were later acquired. investors overseeing a $750m fund for Global Corporate Venturing ranked US-based VC firm Andreessen Horowitz. Gopinath sixth in 2017’s Rising Stars list Agarwala’s departure was officially before she was promoted to managing announced after more than four years director at M12. She partnered unit in GV’s life sciences team overseeing head Nagraj Kashyap in early 2019 to life sciences-related investments in back India-based startups including areas such as genomic data and health healthcare data platform Innovaccer. technology. Andreessen Horowitz revealed Bio Fund III in a blog post co- authored by Agarwala and fellow general partners Jorge Conde, Vijay Pande and Julie Yoo. It will focus on the intersection of software and healthcare and follows the $200m Bio Fund in 2015 and its $450m successor in 2017.

Ken Asada, managing director at NTT Docomo Ventures, the corporate venturing unit owned by Japan-based mobile network operator NTT Docomo, left the company ahead of his move to Salesforce Ventures. Asada had spent less than a year at NDV, having joined in January from Intel Capital, the investment Rashmi Gopinath arm of semiconductor producer Intel. Asada had been promoted to investment director during a stint of nearly eight SoftBank Investment Advisers (SBIA), years at Intel Capital. He told GCV in which manages Japan-headquartered

www.globalcorporateventuring.com 60 Global Corporate Venturing July-August 2020

SoftBank’s Vision Fund, hired Vikas Vin (Praveen) Lingathoti, former regional Agnihotri as an India-based operating head of venture investments at Cisco in partner. Agnihotri joined Google in the UK and California since 2015, joined 2011 as an India-based director before university-focused Cambridge Innovation being promoted to managing director of Capital (CIC) as a partner specialising sales at Google India seven years later. in software investments. At CIC, which He was made interim head of Google has raised £275m ($300m) since India in April 2019. SBIA manages Vision 2013, Lingathoti will make early-stage Fund, which closed its first fund at investments in enterprise and deep-tech $98.6bn and which is currently raising its companies affiliated with the University second vehicle. Vision Fund appointed of Cambridge and the local ecosystem. Sumer Juneja as an India-based partner At Cisco, his fund commitments in late 2018 and its local portfolio included Idinvest, Partech Ventures companies include Delhivery, FirstCry, and Evolution Equity Partners, while his Grofers, Lenskart, Ola, Oyo, Paytm and board observer roles included Sweden- PolicyBazaar. based BehavioSec, UK-based companies Panaseer and Adbrain, Spain-based Intel hired Lisa Coca as a managing Worldsensing and France-based Intersec director and entrepreneur in residence. Group. Before joining Cisco, Lingathoti Coca came from industrial and power had been an investment director at SK technology conglomerate GE, where she Telecom Innopartners, a fund providing had held a variety of managerial roles up to $1m in seed capital for disruptive for nearly two decades at its GE Capital startups in enterprise technologies. Real Estate division and GE Ventures, the company’s corporate venturing Pratima Aiyagari left Cisco Investments arm. Coca had most recently been a and taken up a UK-based investment managing director of enterprise software director role at VC firm Paladin Capital at GE Ventures for seven years from Group. Cisco recruited Aiyagari in 2011, 2012, investing in enterprise technology hiring her as a UK-based domain lead for developers on behalf of the unit, her Europe for its corporate development deals including rounds for Catalant division, where she oversaw venture Technologies, Octiv and Zinc. In addition, investments and mergers and Coca headed GE Ventures’ Edge initiative, acquisitions transactions. Aiyagari which helped portfolio companies access focused on artificial intelligence, machine GE’s network, know-how and resources learning and enterprise collaboration to build and grow their projects. deals for Cisco Investments, taking board observer positions at companies including AImotive, BehavioSec and Evrythng. The move came after former unit head Rob Salvagno’s departure. He was succeeded by Derek Idemoto, senior vice-president of corporate development and head of Cisco Investments, Cisco confirmed to GCV.

Jason Ball has moved from a UK-based managing director role at Qualcomm’s corporate venturing unit, Qualcomm Ventures, to become a partner at consumer-focused VC firm GR Capital. Ball spent more than 11 years at Qualcomm Vin Lingathoti Ventures, focusing on augmented and

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virtual reality, mobility, artificial intelligence Capital (CAC), to join Indonesia-based and internet-of-things investments. investment firm Kinesys Group. Vanada Deals led by Ball include rounds for co-founded the Indonesian office video advertising management platform of CAC, then known as CyberAgent Videoplaza, online radio service We7 and Ventures, as part of a two-year stint network-on-chip technology provider as an investment manager from 2011, Arteris, all of which were later acquired. before being promoted to vice-president. GR Capital is a late-stage investor with a He was appointed executive director in portfolio that includes Deliveroo, Glovo, 2016 to focus on business-to-business, Lime and Wefox. Ball joined the firm at e-commerce and financial technology the same time as Gopinath Selveswaran, developers. Vanada’s investments previously director of investor relations at included online payment platform VC firm Balderton Capital, as it expands operator Coda Payments and consumer from its Ukrainian venture roots. and industrial products marketplace Ralali, and he took board seats at Julia Ognieva, founder of social network portfolio companies such as news operator Facebook’s first in-house aggregation app developer Kurio and startup initiative, joined financial e-commerce marketplace Tokopedia. services platform Intuit to manage external partnerships for its Quickbooks application. The move comes after Ognieva spent more than five years as a strategic product partnerships, platform and augmented reality executive for Facebook, setting up LDN_LAB in November 2018 as an in-house startup program at the company’s UK office.

Decibel, the US-based VC firm backed by Cisco, hired Richard Sherman as an adviser. Sherman was a founding contributor to digital media platform The Players’ Tribune and an investor and adviser for sports drink supplier BA Sports Nutrition, but is best known for his career as a Super Bowl-winning Sridhar Ramaswamy cornerback for American football franchise the San Francisco 49ers. GV hired Sridhar Ramaswamy as an Cisco launched Decibel in April 2019 entrepreneur-in-residence to explore and it focuses on North America-based the oncology ecosystem. Ramaswamy enterprise technology developers, moved from US-based cancer investing at seed to series A stage. It is treatment developer Tesaro, where headed by founding partner Jon Sakoda, he had been senior vice-president previously a partner at VC firm New and head of research and early Enterprise Associates. Decibel has tasked development since 2017. Ramaswamy Sherman with advising its portfolio was an oncologist dedicated to breast companies, leveraging his professional cancer, gastrointestinal cancer and athletic leadership to help them build leukaemia care for nearly two decades their teams. at Massachusetts General Hospital. He Steven Vanada left Japan-based internet will leverage his medical background to company CyberAgent’s corporate identify biotechnology, healthcare and venturing subsidiary, CyberAgent life sciences investment opportunities.

www.globalcorporateventuring.com 62 Global Corporate Venturing July-August 2020

Salesforce Ventures hired Takuya graduates, customer data management Hosomura as a Japan-based principal. platform Shoffr, was acquired by peer Hosomura was previously at e-commerce Affle in March 2019, enabling Rakuten firm Rakuten where he had spent nearly to exit. six years. The company hired him for its marketing division in 2014 and he joined Priyanka Mitra joined M12, the CVC investment subsidiary Rakuten Capital subsidiary of Microsoft, following two years later. His senior manager turnover in its team. Mitra had role at Rakuten Capital from 2017 previously been at VC firm Tola Capital involved Hosomura investing in startups since November 2018 after nearly two and building strategic partnerships years working in corporate venturing between portfolio companies and the as an associate at Kaiser Permanente, unit’s parent. It backed companies the largest integrated healthcare including Glovo, PremFina, Maxi Mobility provider in the US. The move followed and Simplesurance during his time. the departures from M12 of Rashmi Hosomura also supported seed-stage Gopinath and Ronan Kennedy to startups through Rakuten’s Singapore- BCG-backed VC firm B Capital Group, based accelerator scheme, Rakuten in addition to that of managing director Accelerator, Powered by Techstars, Lisa Nelson, a founding member of which was formed in 2017. One of its its team.

www.globalcorporateventuring.com 63 Global Corporate Venturing July-August 2020

Comment Covid-19: the retail time machine > Pandemic has sped up digital transformation > Retail ecosystems benefit consumer and vendors > Supply chains need to adapt

Héctor Shibata In 1895, HG Wells initiated the digital transformation for companies. Director of imagery of “The Time Machine” and Leaders across all industries are looking investments and the ability to travel into the future. to not only survive but adapt to new portfolio, AC Ventures Though the idea of time travel is market dynamics. Retail is a prime far from novel nowadays, reality example of this matter. Ana Maury Aguilar is much more shocking. Covid-19 Investment specialist, is the name of the retail time AC Ventures Consumers and market drivers machine. It has changed consumers’ priorities, consumption patterns Consumer confidence is one of the and accelerated the adoption of most relevant aspects that drives retail. technology. There is lot of uncertainty regarding the duration of the pandemic, the economic Digital capability investments have been downturn and changes in consumption companies’ priority for some time now. patterns. General consumer sentiment is In April 2019, a survey by BCG indicated uncertainty about the future, in greater that 50% of respondents considered proportion in geographies where social investments in digital capabilities to be distance measures remain strict. a top priority. Only one year later, amid the pandemic, the number jumped to The current health and economic 75%. Evidently, the current situation has situation have resulted in a redistribution established a sense of urgency regarding of consumer spending and decreases in

www.globalcorporateventuring.com 64 Global Corporate Venturing July-August 2020

spending power. Consumers’ priorities Retail ecosystems not only attract a have shifted towards basic commodities, large customer base, but also give such as personal care products and retailers access to a large set of groceries. At the same time, the new competences, from advanced data social reality of “life-at-home” has analytics to cloud services, providing driven consumers’ purchases towards them with a capital-light alternative streaming entertainment, e-sports and to building their own capabilities. online shopping for home improvement Through increased collaboration with items, among other things. technology and analytics companies, these ecosystems make data the main The new reality competitive advantage for achieving a one-to-one customisation that enriches consumer experiences. In this way, these Online retail ecosystems ecosystems become hubs for continuous 1 A 2018 publication by Bain Capital, learning and examination. entitled “The Future of Retailing: The Asian Ecosystem”, presents the creation Publications that have emerged as a of retail ecosystems as the driving force result of the current situation support that has led China and South Korea to several key points. One of the key become retail powerhouses. elements is the need of retailers to scale using technology with little use of assets These ecosystems are characterised and strategic partners. A second element by the creation of omnichannel considers the consumer as the center models (offline-to-online) that combine of every business decision. The third several consumer services, such as contemplates the creation of continuous e-commerce, automated customer processes of experimentation and services, entertainment and payments collaborative learning. into a single platform. In a nutshell, retail ecosystems are a one stop-shop for A simple example about the creation consumers that could include all-in-one of retail ecosystems in present times is solutions to other vendors providing the case of Today Bread in the UK. The access to both consumers and services. bakery has turned its small confectionery

Online retail ecosystems

Source: Bain Capital, adapted by GCV. Icons: Freepik, Eucalyp, Catkuro, Dmitri13, all for flaticon.com

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into a production and delivery center for their supply chains to become more bread, and more recently, home bakery resilient post-coronavirus, and some kits. Also, it has created an online store manufacturing should also move closer and enabled payments using Stripe, a to home in order to gain better control strategic partner. Through Stripe, the of supply chains”. business is able to build an online store, and gain access to a number of other On local production, in a study benefits such as advanced sales analytics conducted by the Coldiretti association and financial products (that is, loans). in Italy, 82% of respondents expressed a preference for products with national Another example of retail ecosystems, origin certification in response to explored in Bain’s article, are Amazon the current contingency. On micro and Alibaba’s ecosystems that provide distribution, Bed, Bath and Beyond has access across consumer-to-consumer converted 25% of its stores in the US and business-to-business marketplaces; and Canada into dark stores that will financial services and payments; micro-distribute their online sales within logistics; cloud computing, and brick- the main cities. and-mortar stores.

Other retail models 2 Apart from retail ecosystems, Bain’s research elaborates on additional retail models. Some companies may strive to access absolute scale as well as increase their local market share leadership. On the other hand, some companies may implement brick-and-mortar models in attempts to reach consumers. Smaller companies with low bandwidth may resort to partnering with other companies to solve strategic challenges for them. Some companies lack access to absolute scale but have strong local leadership positions. Ana Maury Aguilar

Back to local and micro Though several experts declare that fulfillment 3 consumers will return to physical store The new concept of “life-at-home” has shopping post-contingency, the truth created the need to reduce time and is that Covid has shifted consumers’ distances when it comes to shopping priorities towards additional convenience and product delivery. and more importantly security, Carrefour has an agreement with Uber maintaining the need for local purchases Eats in Paris to deliver orders in less than in all categories, but especially in 30 minutes. This results in the creation of recurrent basic consumer products. local economies focused on production and distribution in high density areas. Smooth retail execution Stephen Kaufman, senior lecturer of 4 The current pandemic has business administration at Harvard impacted retail and its operations. First, Business School, says “businesses e-commerce and online grocery has are likely to diversify and broaden increased significantly, supported on

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the back end by automation and mobile > Node operations: key physical flow payments, and will continue to adjust as capabilities that ensure competitive cost the new reality comes in place. structures and reliable quality while managing complexity As the customer journey evolves and safety becomes a top priority for > Transportation and Logistic Service consumers, stores will have to adapt Provider management: key physical flow its operations accordingly. CB Insights capabilities that provide reliable, fast discusses some aspects that will impact service to all customers where it matters, store execution in the short term, which while ensuring competitive transport costs. include: remote store service to minimise time in store, smarter and contactless > Network and ecosystem of the future: shelf monitoring, self-cleaning tools to the supply chain’s backbone - provides keep surfaces clean, virtual try-on to required speed and flexibility, leveraging minimise contact with the clothing and information, and partner assets and items, and contactless checkouts. capabilities

Digital innovation in Adapting to 2020 retail 5 supply chain In summary, retail is evolving at a fast Supply chain will combine best practices speed. Based on Bain’s report, some and digital innovation to adapt and imperatives for retailers are: respond to the new reality. Based on > Strengthen your differentiation today McKinsey, a few elements that the supply and prepare for a more innovative chain of the future should consider are: future. > Customer-centric supply chain > Obsess over customers and their strategy: meet customers’ needs along experiences. any channel > Find the fuel for technology > Digitisation and process automation: investments. key technology enabler that uses available omnichannel data, analytics and > Use data to automate more decisions. supply chain systems along the end-to- Speed up innovation. end value chain- and includes ecosystem > partners Unlike in Wells’s book, organisations are not simple observers of future > Operating model and change times. They are actors, who despite management: key organisational the many challenges, make decisions enabler for the company and its people of continuous innovation, creating – captures supply chain potential and working ecosystems that drive the delivers exceptional customer value economy at the micro and macro levels. > Planning, information and flow: key Although the trends resulting from information flow capabilities that access the present crisis will remain for some the right products in the right place at time, consumer priorities will continue the right time – real-time – to deliver to change, and market conditions will according to customer expectations adapt to “new normals”.

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Independent VC versus corporate VC > CVC share compared with IVC share has risen to 25% > Main goal of CVCs is strategic > IVCs may be able to capture more value in downturns

Héctor Shibata Who does not know companies like Jungle Ventures, among others, provide Director of Uber, Airbnb, Wize or WeWork today? high-yield, high-risk financing by investments and What is one of the elements that all of purchasing a stake in companies through portfolio, AC Ventures them have in common? They all raised equity or equity-linked securities, that venture capital at the beginning is – convertible notes (CN), Simple of their operations. This type of Agreement for Future Equity (SAFE) and financing allowed them to grow at so on) Participants include independent times when perhaps no one else was VC funds and corporate venture capital willing to invest in them. funds (CVC). VC refers, as Paul Gompers and Independent venture capital (IVC) funds Josh Lerner explain, to an important are organisations formed by general intermediary in financial markets, partners (GPs) who manage the fund providing capital to firms that may and raise third-party capital to invest, otherwise have difficulty attracting funds. rendering to a predefined investment Capital is usually directed to new and thesis. Some examples are Battery in the small projects or companies with great US, Blume in India, Vertex in Israel and growth potential, but a very high level of Monashees in Brazil. uncertainty and risk. When it comes to CVC, funds are vehicles VC firms, such as Sequoia, Andreessen constituted by a corporation with the Horowitz, Accel, Kaszek, Hanaco or purpose of investing (mainly in startups,

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although they can also invest in IVCs) ensuring their relevance in the market as a defined amount of capital with the an ongoing business. purpose of generating financial and, above all, strategic benefits for the Hence, while CVC funds seek financial organisation. Some examples are GV returns, their main goal differs in that in the US, Samsung Ventures in Korea, the purpose of the fund is to create Mitsui Global Investments in Japan, strategic returns for the organisation. Scotia in Canada and others. These returns can come in various ways, such as knowledge, innovation, new The concept of CVC funding is far from technologies, development of capabilities new, dating back to the 1960s with and among others. companies such as Dow, DuPont, Exxon and GE, among others. In recent years, Investment horizon however, the importance of CVC funds has increased significantly. According The typical investment horizon of an to CBInsights, CVC-backed deals and IVC fund is 10 years (closed-end), it can funding reached a record high in 2019, be extended for additional years with growing at 8% year-over-year to 3,234 the authorisation of the LP, per the deals worth a total of $57.1bn. Their guidelines established in the limited share with respect to IVC investments in partnership agreement. CVC funds, on startups has increased from 19% in 2014 the other hand, are usually open-ended, to 25% in 2019. meaning they do not have a fixed term.

While both IVC and CVC funds are focused on value creation, they differ in several aspects when it comes to the objective, structure and operation of the funds. Some key differences between an IVC fund and a CVC fund are:

Objective The main objective of IVC funds is to maximise financial investment returns as a portfolio and satisfy investors (mainly VC funds have 10-year horizons while CVCs can external limited partners or “LPs”). go on into the distance Hence, their area of focus is to optimise and grow companies they invest in with Measurement of performance and the purpose of achieving an exit (that value added is – an initial public offering or M&A GPs are under pressure to generate transaction) for the firms at the highest financial returns, otherwise the value possible. probability that the GP will be able to raise a subsequent fund is low. The objective for CVC funds, on the other Therefore, financial return is the main hand, goes further than financial returns. aspect in consideration when it comes This goes back to the motivation behind to measuring performance. When it the creation of a CVC fund. Business comes to the value added of an IVC dynamics and the degree of innovation fund, this involves differentiation vis-à-vis have accelerated exponentially, which competition on investment track record, has driven several traditional corporates industry expertise, network, timely to allocating capital towards creating execution and reputation. a CVC fund that can assist them in the objective of being at the forefront and When it comes to CVCs, financial

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returns are not the only indicator of CVC funds enjoy significant advantages fund performance. Measuring strategic in the due diligence process within their returns can be less straightforward than industry domain relative to IVC funds measuring financial returns. To measure because of their ability to leverage the strategic impact CVCs have on the corporate and industry knowledge, organisation, management resort to technical expertise and extensive a number of different indicators such networks. as measuring the impact of having startups as suppliers, the number of Fund structure pilots or programs they implement with startups, partnerships and others. When The structure of an IVC fund is usually it comes to the value added of the fund, external, defined by the relationship this involves the CVC’s experience in between the GP and LP. The GP the industry, its geographic impact, its manages the fund and the LP provides networks and brand recognition. the capital required for the investments. Typically, the fund is established in jurisdictions with tax advantages for investors.

In the case of CVCs, the structure can be external or internal.

“An external structure allows more consistent investment management and greater financial autonomy with more accountability for investment performance. With internal CVC Héctor Shibata practices, corporate sponsors fund investments off their balance sheets on a deal-by-deal basis. This structure Deal sourcing and diligence has drawbacks and benefits. Such a Deal sourcing is one of the topics practice exposes the CVC program where IVC and CVC funds differ widely, to more uncertainty and fluctuations mainly attributed to their distinct based on corporate operating budgets backgrounds. CVC funds are often able and business cycles because corporate to access a generous source of pipeline sponsors typically invest in startups in their respective industry through from discretionary resources. Although their extensive business networks and this practice tightly ties internal CVCs to strategic partnerships. IVCs, on the other evolving corporate priorities and gives hand, usually rely on the team’s personal companies more funding flexibility, networks (principally the GPs’) as their it also undermines the consistency main source of pipeline. required to support investments through When it comes to performing due economic cycles” (Asel, Park & Velamuri). diligence on an investment opportunity, In economic downturns, IVC funds may CVC programs usually engage business be able to capture more value, especially units and other stakeholders in their if they have significant dry powder to industry network. While IVC funds deploy to take advantage on market perform due diligence internally, they opportunities. sometimes outsource certain elements such as the legal or technological part. Fund management incentives According to Paul Asel, Haemin Dennis Usually, IVC managers receive greater Park and Ramakrishna Velamuri, financial incentives. Typically, a GP

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gets an annual management fee and startup before a CVC fund does and may a profit share (carried interest) if add value by assisting the startups in the the fund accomplishes [its] financial capital raising process, team building, return [targets]. In the case of CVCs, operations, commercial development, compensation typically is composed by a and governance. In the case of CVCs, salary and bonus structure. they may also add value to startups the same way as IVC funds and in other numerous ways in addition to capital Final considerations for startups funding, such as the endorsement Both successful IVC and CVC funds must from a reputable corporate investor, develop mutually beneficial relationships partnerships in various forms, large with startups. The entrepreneur should and diverse networks, and pools of consider the value added by each of knowledge. As William Sahlman from them, as well as future strategic and exit Harvard Business School said “from alternatives. whom you raise capital is often more Typically, an IVC fund will invest in a important than the terms”.

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Innovative region report: DACH A DACH for capital

> Exponential growth in corporate venturing > Robust startup ecosystem development > Strategic partnerships among diverse players

Liwen-Edison Fu Germany (Deutschland), Austria and in Germany the strongest ecosystem Supplements editor Switzerland (Confœderatio Helvetica) of CVC units in most industry sectors make up the DACH economic region, such as automotive, chemistry, pharma, which has a unique innovation software, energy and finance. landscape ranging from the “This distinguishes Germany from entrepreneurial hub of the German Austria and Switzerland, because of its capital of Berlin to the Swiss city of strong industrial history. Nearly every Zug, nicknamed Crypto Valley. big company has a CVC subsidiary – The DACH venture capital ecosystem Germany has 81 CVC units, Switzerland recorded €7.5bn ($8.4bn) of deal value 15 and Austria two. These units are distributed across more than 700 working closely together, across transactions last year, according to data industry and the value chain, so provider PitchBook’s Venture Ecosystem that startups can benefit from the FactBook. Corporate venturers ecosystem. These networks are actively contributed to more than 200 deals managed by the government, for whose volume stood at €4.6bn ($5.2bn). example, through the HTGF [public- Bernhard Mohr, managing director private VC investment firm High-Tech of Evonik Venture Capital (EVC), Gründerfonds]. the corporate venture capital (CVC) “With their global reach, the German division of the Germany-listed CVC units also connect startups globally speciality chemicals provider, told and open the global market for their Global Corporate Venturing: “We see

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Corporate-backed deal count by country

Germany Switzerland

50 46 81 80 83 80 71 10 40 37 7 60 60 13 14 20 30 12 16 30 6 43 13 24 5 15 10 14 21 Deal count 40 11 12 12 20 7 11 28 10 31 16 16 27 13 12 7 21 9 9 7 20 11 9 9 10 12 10 9 6 10 10 7 4 7 6 8 0 10 9 9 0 5 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Austria 6 Markus Moor, a partner at Emerald 6 1 Technology Ventures, a Switzerland- 1 based clean technology-focused venture 4 firm with over 20 corporate limited 3 3 3 3

Deal count partners (LPs), said: “Despite its small 2 1 1 3 2 2 2 size, Switzerland has two universities 3 1 1 1 1 1 1 in the global top 20 university ranking 0 1 1 1 1 1 1 1 1 and both are regarded as some of 2012 2013 2014 2015 2016 2017 2018 2019 2020 the strongest technical universities.

Consumer Financial Industrial Media Telecoms They have been an excellent source Energy Health IT Services Transport of innovation and showed a steadily Source: GCV Analytics increasing number of spinouts over the last two decades.” portfolio companies. With subsidiaries in the Silicon Valley, German CVC Jelena Markovic, a senior associate units connect their business with the at BayWa RE Energy Ventures, the strong VC network. Silicon Valley-based corporate VC vehicle for BayWa CVC units are mainly in software and Renewable Energy, Germany-based commercial services.” trading conglomerate BayWa Group’s clean energy subsidiary, commented Dominique Mégret, head of Swisscom compared with Silicon Valley, DACH Ventures, the majority Swiss state-owned region’s ticket, round and fund sizes are telecoms firm’s corporate venturing arm, significantly smaller. explained that although its home is a small country, it is highly diverse and She added: “Furthermore, company packs substantial world-class capabilities. valuations are a lot lower as well as the number of unicorns in the region. Mégret added: “The few universities we Another distinguishing factor is the have are among the best in the world and heavy focus on facts and figures and many multinational corporations (MNCs) due diligence of German VCs, and the operate global research and development exit scenario is less oriented towards an (R&D) centres here to benefit from that. initial public offering. That density of know-how is what sets Switzerland apart not only from Germany “Concerning the pitching process, the and Austria but in some ways also from startups in Germany usually have less Silicon Valley. However, the latter has a variety of term sheets to choose from and domestic market with plenty of room for are the ones who apply. Nevertheless, companies to reach global scale, unlike high potential startups will always have a Switzerland.” number of investors to choose from.

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“Germany is the biggest magnet for tech Germany-headquartered energy utilities talent in the DACH region, making it a company, noted: “In the DACH region, more effective startup environment than only the size of the German market leads Austria and Switzerland. The German VC to valuation differences.” He added that ecosystem is the biggest in the DACH many DACH-based fund managers have region, which adds to its attractiveness been implementing ideas learned from for startups as well. Silicon Valley.

“Most of the funding is invested in Berlin Matthias Engel, managing director for and Munich, with a focus on series A and Innogy Ventures, a strategic investment B. Also, as Germany has broad traditional vehicle for the Germany-listed utility industries with a high potential for Eon’s renewable energy subsidiary, disruption, it is offering additional said: “Germany is certainly by far the structural opportunities to startups.” biggest economy [in DACH]. Most large corporates are active in CVC and The German Startup Association, understand this as an essential part headed by Christian Miele, a Berlin- of innovation. Though some larger based partner at US-headquartered VC corporates in other DACH regions are firm E.Ventures, has developed multiple also active in CVC, it is less common. measures that will optimise the country’s “Germany is interesting for investors startup ecosystem. For example, the and founders for a number of reasons. association helped push through a €2bn Top-class engineering and business ($2.2bn) startup subsidy scheme backed universities provide a constant flow of by the federal government to help talent. This being paired with access to entrepreneurs survive the pandemic. globally leading industrial corporations, Pillar 1, sponsored by state-owned some of them being blue-chip development bank KfW, would help companies and some of them being finance larger startups with VC support hidden champions from the so-called while smaller startups without private Mittelstand (medium-sized businesses). capital backing could take advantage “Another reason is access to seed and of Pillar 2, earmarked through local earlier-stage capital. There is quite development entities helped by the an amount of public capital available federal government. to support entrepreneurs but also Crispin Leick, managing director of EnBW institutional funds for earlier-stage New Ventures, the CVC outfit for the companies. Growth money is however

Historical view of exits across the region

$2,866m $3,000m 16 15 14 $2,216m 14 $2,500m 12 12 $1,723m $2,000m 10 Dollars $1,500m Deal count 8 7 7 6 6 $1,000m 5 5 $512m 4 $939m 4 4 $802m $500m 2 $450m $289m $268m $0m 0 $56m 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

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(from left): TV Tower in Berlin, St Charles’s Church in Vienna and Lake Geneva

scarce, which will make it attractive an unmatched quantity and variety for investors from abroad to come to of hidden champions – world leaders Germany. There is just not as much in industry and manufacturing that competition among investors like in dominate their respective sectors. “The Silicon Valley and hence investors deep and dispersed technological know- will benefit from lower valuations of how and capacity for innovation within companies.” the Mittelstand is often underestimated,” he added. Sean Wright, Germany-based managing director of Stanley Ventures, US- “The mix of renowned technical headquartered hardware product maker universities including Technical Stanley Black & Decker’s corporate University of Munich, Karlsruhe Institute venturing group, added: “There is of Technology and RWTH Aachen significantly more startup activity in University, business schools such as EBS, Germany [than in Switzerland and HHL and WHU, research institutions Austria]. We have however invested like Fraunhofer and Helmholtz, as well in one company in Switzerland [while] as MNCs play a key role in fostering Austria tends to have a bit less startup innovation and collaborative approaches activity in our impression. through strategic partnerships, VC, incubators or accelerators. Hence, “The German ecosystem is also unique Germany has an excellent point of compared with the US. Germany is a lot departure for successful co-development smaller than the US, but you tend to find and moonshots – for intrapreneurs and a lot of good hardware startups here due entrepreneurs alike.” to the strong engineering culture.” Paolo Bavaj, head of corporate venturing Tobias Gutmann, assistant professor of adhesive technologies at Henkel of product innovation at Germany- Ventures, the Germany-based adhesives, based EBS Business School who leads cosmetics and laundry product the Siemens Product Innovation Lab, manufacturer’s CVC arm, concurred explained that Germany profits from that Germany has several remarkable

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Companies with types of innovation vehicle

20 19%

17% 17%

15 13%

6% 5

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Incubators Partnership units Corporate venture capital Accelerators Innovation/digital labs

Source: BCG. 570 corporates in Q3 2018. Multiple vehicles of the same kind are counted as one. Figures included shared vehicles.

technical universities and strong Bavaj’s observation echoed the sentiment manufacturing industries. “This means expressed by Philipp Thurn und Taxis, that startups have the market always chief executive and founder of Constantia close by if they develop a new material or New Business, the Austria-based technology,” he argued. industrial conglomerate’s corporate venturing fund, who told GCV last year: “Germany also has a unique structure “The teams that we come across are with the Mittelstand companies, who act usually very good on the technical side, sometimes as technology providers and with highly-qualified engineers, but often sometimes as smaller customers, who miss the commercial skillset that should are quickly willing to try new stuff. This is come with it. This has to do with the very interesting for startups in order to European and German DNA [as opposed get initial feedback before they can scale to the US one]. with the larger companies. “It is a cultural thing – we like to build “The other side of the coin is that things, but we do not like to sell things, the excellent technical universities as that bears a somewhat negative in Germany do not really encourage connotation for young engineers. We students to become a founder. Too need to change that image culturally, as often entrepreneurship is not part a good business founder is also a good of the academic curriculum. Another salesman.” unfortunate circumstance is that there is by far not enough money and risk-taking That said, Berlin is regarded as the symbol behaviour in Germany to sufficiently of German innovation and its startup support early-stage startups. scene, according to EBS’s Gutmann. “Indeed, it is a good case study for “All in all, there are very unique aspects illustrating the ecosystem’s development. in Germany where one can build on, but While the innovation ecosystem has there is certainly also significant room been widely dominated by a few players for improvement.”

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like [e-commerce holding group] Rocket were not satisfied with their cooperation Internet, it has become way more and impact generated. This put pressure dispersed, in terms of industries and on corporate venturing units, mostly geography,” he pointed out. from the C-level executives – a trend that has been accelerated during the “The times of e-commerce and copycats Covid-19 pandemic as corporates try to are long gone and Germany has very navigate through the health crisis. strong local ecosystems in different regions including Munich, Ruhr and “Post-Covid-19, however, corporate Leipzig, which are becoming more and venturing units will play an even more more connected through different important role as before – they will government programs such as De:Hub, become an essential contributor to topic-specific initiatives like AppliedAI and the new CEO agenda and will help re- conferences such as Bits & Pretzels.” imagine growth.

“Key questions will then be how to Increased CVC activities in the region allocate capital to different innovation Michael Brigl, Munich-based managing activities encompassing incremental and director and senior partner at consulting disruptive spectrums; how to leverage firm Boston Consulting Group (BCG), said: M&A more aggressively; how to set “In recent years, we observed a steep the innovation agenda to support the increase of innovation vehicles – such as growth ambition; and how to leverage CVCs – in DACH. Most of the companies innovation vehicles, including CVCs, to (65%, according to BCG’s DACH-focused realise the agenda.” study conducted in 2019) actively EVC’s Mohr also observed an upsurge partnered startups and, thus, leveraged of CVCs in the DACH region in recent their tech as a vital source of innovation. years, which has led to good networking “Despite this development, many opportunities among CVCs and startups. startups (55%) and corporates (45%) “Open innovation is an important

Top investors in the region

By number of deals Georg von Holtzbrinck 23 56 Swisscom 19 52 Tengelmann 19 39 Boehringer Ingelheim 21 22 RedAlpine 7 21 NRW Bank 14 19 RWE Innogy 8 16 Commerzbank 6 15 Vorwerk 8 14 Zürcher Kantonalbank 7 14

By dollars SoftBank $2,259m Sector Georg von Holtzbrinck Consumer $1,452m Energy Dexxon Pharma $1,100m Financial Tengelmann Health $965m Industrial United Internet $679m IT Ferring Media $570m Services Tencent $500m Telecoms Goldman Sachs $490m Transport Utilities AstraZeneca $461m Novartis $437m Source: GCV Analytics

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component of companies’ innovation “In terms of specific technologies, strategies in most industries,” he blockchain has cooled down pretty much continued. over the last years and the excitement has not yet come back. Artificial “This has no impact on our investment intelligence and machine learning are approach but, overall, the willingness in still very hot topics in Germany across the business units to work with startups all sectors and get a lot of attention as has increased. A large number of CVC they are regarded as foundational for an units makes it possible to support economy in the future to be successful.” investments across value chains through co-investments with CVC units from other industries.”

EnBW New Ventures’ Leick agreed that the ecosystem in the region has developed considerably, in terms of the number of corporate players, funding amounts and types of investors. “Today, it is possible to build consortiums that truly make a startup stronger by taking on different parts of the needs, for example, [by combining international expansion] and industrial sector insights,” he pointed out.

“We, therefore, spend more time in setting up the right mix and balance in a Matthias Engel consortium than 10 years ago. Especially because the CVC community has grown, While Engel does not perceive a specific today we only work with CVC setups that sector sticking out from a German follow the same basic beliefs as ours.” perspective, he appreciates Berlin is In the past few years, Innogy Ventures’ known for its e-commerce and financial Engel noticed an inflow of talent from technology scene and Munich remains a abroad, especially Eastern European, and hotspot for enterprise software and tech. more mature service providers. “A few “Especially for us as an energy company, years ago, it was not so easy to find a law but also for other industries, climate firm that could deal with the specifics of change has become an ever more investment agreements or virtual stock important topic over the last years. It is fair option plans for startups in Berlin. It is a to assume that this will affect investment commodity today.” strategies for CVCs,” Engel added. As for investment trends, the number- “Decarbonisation and digitisation are one topic in Germany is digitisation, said two trends that in my way go hand-in- Engel. “Even for some larger companies, hand. Paired with sustainability, these Covid-19 has been a wake-up call in that three will form the basis for a number of respect. So in my view, a lot of attention investment strategies to be formulated to CVCs will go in that direction. Needless right now and in the future. Covid-19 has to say that the public sector lags behind tremendously accelerated this thinking in lightyears and that we can expect strong Germany.” demand for digitisation in that sector as well, offering opportunities for investors Henkel Ventures’ Bavaj, however, said and entrepreneurs.” he has not seen the same level of

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Innovation vehicles types by company

Average number of unique vehicle types

3.03 2.00 1.00 0.99 0.85 0.63 0.40 0.13

Number of unique innovation vehicle types (%)

1 3 100 5 2 5 2 9 14 8 5 18 13 20 15 25 16 80 8 12 4 10 20 27 15 3 60 25 30 26

23 74 2 40 74 57 1 20 35 55 44 46 20

0 13 10 3 0 DAX SMI MDAX Family-owned ATX-listed TECDAX SDAX PE-owned

Average revenue of corporate (€bn)

50 47 40 30 23 20 10 10 6 4 2 2 2 0 DAX SMI MDAX Family-owned ATX-listed TECDAX SDAX PE-owned

Source: BCG, Q4 2018. Types of vehicle: innovation or digital lab, corporate venture capital, incubator, accelerator and partnership unit.

development with material science in over the past three years has shown a Germany, acknowledging that most huge potential for collaboration, [which] disruptive advancements in the region we have done over the past three are related to digital innovation and years through Elevator Lab. We have business models. conducted about 25 pilot projects in 10 countries that resulted in partnerships Case in point is Austria-based financial where real value was created. services firm Raiffeisen Bank International (RBI)’s strategic investment subsidiary, “I think this is where the future is heading Elevator Ventures. The unit appointed to – RBI can offer its network, experience Maximilian Schausberger, formerly and know-how, and build a point of head of partnerships at RBI’s technology contact for external partners. collaboration program, Elevator Lab, in recent weeks as managing director in a “The whole bank is developing in this bid to ramp up its fintech focus. direction, and the infrastructure is being developed. Our business models of Schausberger told Der Brutkasten: “The the future – technology like blockchain, journey between RBI and fintech startups open APIs [application programming

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interfaces, or open banking]. Fintech ecosystem and the resulting topics are not seen as something opportunities for corporates, BayWa separate now but are more involved RE Energy Ventures was established as and included in a broader strategy of the CVC of BayWa RE in 2018. From our partnerships.” perspective, corporate venturing does not always have to be strategic, but can also Regarding Switzerland, Swisscom be financially driven and act as a source Ventures’ Mégret said historically – and for market knowledge and trend scouting. even today to some extent – the country has been underfunded with VC money. “Due to its structural advantages, “There was about $2.3bn VC funding Germany produces highly innovative invested in Switzerland in 2019, which hardware and software startups. only represents about 5% of domestic Nevertheless, the industries mostly R&D spending,” he continued. represented in the startup ecosystem are IT, food and consumer goods. “Other, more mature ecosystems such Therefore, as a cleantech investor, our as the US and Israel, see VC investment investment scope expands beyond volumes at 15% to 25% of their Germany to Europe and Israel.” corresponding domestic R&D, at similar relative R&D spending levels.

“Switzerland has already evolved a lot and we are starting to see much more high-quality later-stage investment opportunities nowadays, so as an investor, we are trying to maintain our leading position for those stages.”

In the energy sector, Innogy Ventures’ Engel said he has not come across many CVCs from Austria or Switzerland making investments. “I am aware however of some energy companies in Austria that are planning to set up CVCs,” he added.

“Across all industries, my impression is that most large corporates and blue- Michael Brigl chip companies in Switzerland have a CVC and that it is much less common for Stanley Ventures’ Wright holds the large corporates in Austria. Depending same view that the German innovation on the economic development post- ecosystem is growing fast and becoming Covid-19, we might see a certain demand more important, saying: “There is a reason in Austria to catch up.” why we have an office here in Germany – it allows us to tap into the local innovation Concerning Germany’s startup scene, ecosystem for deals, and also serves as a BayWa RE Energy Ventures’ Markovic good central base within Europe.” noted that some of the driving factors of its growth have been university programs supporting students’ entrepreneurial Ecosystem collaboration projects, as well as a stronger VC Emerald has maintained its geographic ecosystem and traditional industries’ focus on Europe and North America increased appetite for innovation. since it was founded in 2000, according to Moor, who added: “Over the last two She explained: “Out of this growing decades, the DACH region has seen a

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steady increase of CVC activities with they fit our investment focus,” most major industrial corporations she added. having a CVC practice. We have co- invested over this duration with many BCG has supported various CVC units and are fortunate to have multiple close – in DACH and beyond – to navigate relationships with numerous of those as through the crisis through its corporate LPs and partners in our fund. venturing and incubation subsidiary, BCG Digital Ventures, and its VC affiliate B “Besides its venture funds, Emerald Capital, Brigl said. also manages the Technology Fund, a Switzerland-focused loan guarantee “We helped to refine innovation and program sponsored by the Swiss corporate venturing strategies to government to support startups and prepare for a rebound or drove the small and medium-sized enterprises. acceleration of venturing activities, for Under this program, we had the instance, expanding portfolios and opportunity to support close to 100 building up new ecosystems,” he added. companies in their growth ambitions.” “At the same time, we have closely worked Henkel Ventures is also working with together with the government and other funds such as HTGF, its CVC peers, associations to help the ecosystem to incubators, accelerators and universities navigate through the crisis and to win the to identify disruptive technology that future. For example, we supported the would strategically fit Henkel, according German Startup Association to prepare a to Bavaj. study on employee stock options which outlines key measures to reinforce the German startup ecosystem.”

“CVCs can provide a While EnBW New Ventures does not diligent view on the work directly with the government, it has technology and market and partnerships in place with early-stage investors with government backing, VCs can provide that pure according to Leick. “We have some links ‘ruthless’ investor view” with universities based on personal Matthias Engel relationships and try to engage from time to time to convince students to join “We maintain very close relationships the VC industry,” he added. and are very open to having “When it comes to CVCs and VCs, we collaborations with startups from these know the ones that are active in the organisations, even if there is no room smart infrastructure space and exchange for us to invest,” Bavaj said. “Our main on a regular base with them to discuss objective is to identify exciting new investment trends or common interests technologies and materials for Henkel in order to prepare to invite them into through collaborations.” deals based on such knowledge.

Markovic said BayWa RE Energy Ventures “It is great to work with players that are stays in touch with its VC and CVC peers in the field for 20 years, but we also through events and regular calls to enjoy working with fresh minds who are exchange dealflow, inside or outside of managing their first funds. After all, it is the DACH region. “We also visit a lot of exciting to discuss how to support the pitching events hosted by accelerators entrepreneurs to build a successful and or universities to get to know promising sustainable company with products that companies at an early stage, and to keep bring our three core targets together: in contact until they are in a stage where people, planet and profit.”

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Stanley Ventures works closely with co- CVC and VC investors across DACH, investors and deal sourcing entities in Mégret said. “Those relationships are, first DACH in the same way its international of all, an excellent source of dealflow, but team members do in other geographies. we also like to take advantage of them Wright said: “There is a strong ecosystem to make referrals for local companies we of early-stage founder support networks like, but just do not fit our criteria yet. and plenty of co-investors [in DACH].” Swisscom is engaged with various local startup programs and our team is closely EVC also teams up with many CVC involved in some of those as well. units on co-investments and dealflow. “Cooperation with incubators and “We also collaborate with our universities universities was intensively cultivated – ETH Zurich and EPFL Lausanne – even before the CVC unit was founded through their innovation transfer units in 2012, but strengthened since then,” and try to represent the interests of our Mohr said. local entrepreneurs as best as we can when we meet with public officials.” “Institutions such as HTGF, the European Innovation Council, the European Innogy Ventures’ Engel concluded: Investment Bank, the Federal Ministry of “Collaboration is essential these days and Education and Research and the Federal will become even more important in the Ministry of Economic Affairs and Energy future. The great challenges societies have made a significant contribution to face – climate change, waste of resources the development of the ecosystem.” – and the massive transformation EBS’s Gutmann agreed that CVCs rarely of industries – for example, energy, work alone. “In fact, many companies automobile and banking – cannot be possess an arsenal of ‘innovation achieved in silos or by single companies weapons’ from which CVCs can draw, or sectors alone. Partnerships and screen and source,” he said. “Even more alliances will need to be formed. so, many companies collaborate beyond organisational boundaries through joint “We are very open if it comes to startup programs – such as Startup collaboration with CVCs even if they Autobahn – or syndicate investments. come from competing corporates or Universities and their entrepreneurial funds. Same is true for teaming up with activities are, of course, also a major other VCs. I even see a true mutual vehicle to connect to innovative students benefit by collaborating and jointly and researchers.” investing by VCs and CVCs. CVCs can provide a diligent view on the technology The Swisscom Ventures team also and market and VCs can provide that maintains close relationships with many pure ‘ruthless’ investor view.”

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Global University Venturing SETsquared: a global leader continues to charge ahead

> Partnership has supported 4,000 entrepeneurs > Focusing on spinouts and spin-ins was crucial > Its knowledge exchange elements are worth replicating

Thierry Heles The world’s number one university Simon Bond, the partnership’s Editor, Global incubator has been making a big innovation director, and his team make University Venturing impact since 2002, having supported it look deceptively easy. That is, at least more than 4,000 entrepreneurs in part, thanks to the model on which that have raised more than $2.2bn SETsquared was built. Bond told sister between them. publication Global University Venturing SETsquared, the enterprise partnership that the incubator was a response to between the UK-based universities the government’s ambition to create of Bath, Bristol, Exeter, Southampton universities in the UK that did what and Surrey, has always thought big. policymakers thought was going on Launched in 2002, it has held the top in the US. In particular, they were spot as the best university business drawn to the Massachusetts Institute incubator in research firm UBI Global’s of Technology (MIT) and Stanford international ranking since 2015. Even University models. before becoming the number one The universities were looking to operate globally, it was already the leading a network of incubators on a single incubator in Europe. brand with a common structure, Bond

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explained. “Some of that was to do system that is filled with risk-taking with cost-saving,” he acknowledged, investors, visionary chief executives and “but more importantly, they thought it people who want to work for them. would give them the scale to make a real presence. That has really borne fruit Building SETsquared as a partnership with the subsequent developments of between different universities SETsquared.” circumvented the challenge that a small city like Bath – whose population stood The “fantastic” decision they made, Bond at an estimated 192,000 in 2018 – does continued, was that SETsquared would not have the resources of a city like focus on spinouts and spin-ins. “That has Boston – which counted an estimated allowed SETsquared to scale up, long 692,000 residents last year. before terms like knowledge exchange had been established,” he said. But “string together five universities that have more than £2bn of income each year, thousands of students and a seven- digit population,” Bond said, “it is still not quite Boston but you are approaching it”.

He cautioned that the SETsquared model was easy to misunderstand: “I do see, particularly within the European context and our heavy state way of doing things, that when people try to replicate our model, they misunderstand it as a closed system, a one-way conduit that takes research from labs through a tech transfer office and throws it out into the entrepreneurial classes.

“We do real labour. If you wanted to Simon Bond emulate the success of SETsquared, it is built on knowledge exchange and genuinely open, on equal terms The idea came from a trip by the with entrepreneurs coming out of the foundation team to the US where they universities, wanting to work with the visited ecosystems such as those in universities or just wanting to work with Boston and across California. each other. That is the element worthy of “It is often forgotten that tech transfer replicating.” office funding is pretty light in the US,” Bond said. “They get it over the wall and into the ecosystem as quickly as possible. For more on SETSquared, see MIT’s university business incubation Global University Venturing’s capabilities are fairly modest compared full article here. with this superstructure, this external

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Global Impact Venturing Navigating big government > German development bank bought into Covid-19 vaccine firm > Political attention increased by innovation’s success > State agencies can be useful part of the mix

James Mawson The traditional way to think of local developer working on messenger Editor-in-chief supporting entrepreneurs has been RNA (mRNA)-based drugs and whose to look at their five primary needs: technology could also influence access to capital, finding customers, development of a vaccine for Covid-19. product and service development, The transaction will give KfW a stake hiring people and, eventually, an exit. sized at about 23% and it comes after Increasingly, however, a sixth factor the company agreed a $90m loan from is coming into play: navigating big the European Investment Bank in March government. this year, when it announced it would concentrate efforts on developing a From a reflexive position across much coronavirus vaccine and following press of the western world of privatisation and reports the American government had letting markets decide since the days of tried to invest and relocate the company Ronald Reagan and Margaret Thatcher to the US. has come a counterblast from the east that industrial strategies, state bailouts The geopolitical tensions bubbling away and national champions are important. are seen across almost all technologies as innovation becomes a defining Last month, German government- route to national prosperity. Whether owned development bank KfW agreed this requires state management and to invest €300m ($339m) in CureVac, the direction is another matter.

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Inclusion of state agencies is a useful that authorities would wish to avoid part of the mix – CureVac has corporate, but deeper reflection on the causes of family and VC backers after spinning out the actions almost always reveals an from university two decades ago – but underlying reason that can be better just as with other strategic investors, the treated rather than a blanket ban, in focus on supporting the entrepreneurs the same way corporate venturers have is the starting point for governments, learned to avoid asking for rights of first whether they eventually move abroad, refusal and other limitations. sell to another business, list in another jurisdiction or supply products to the It is good to see governments stepping higher bidder. in to impact the great challenges of our time and increasingly joining in with It might be frustrating for countries at other venture investors in syndicates – the individual level if decisions are made if responsibly handled.

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Quarterly data report Lockdown does not stop CVC in Q2 > Total investment is up on Q1 > Year-on-year picture is less heartening > Top deal is MGI Tech’s $1bn

Kaloyan Andonov Amid the Covid-19 pandemic and an Comparing Q2 2020 with the previous Reporter almost worldwide lockdown, most quarter, there is a slight decrease in deal people spent much of the second count, down 6% from 810. Estimated total quarter at home. That does not mean, investment, however, went up slightly by however, that everyone stopped about 4% from $24.69bn. working or the world came to a halt – If we look at the results on a half-year and venture investing is no exception. basis, H1 of 2020 registered 1,572 deals In this odd, locked-down second with an estimated capital deployed of quarter, GCV Analytics tracked 762 $50.38bn. These figures show a 5% drop funding rounds involving corporate in the deal count and a 21% reduction venturers, representing a nearly 11% in the estimated total dollars in rounds drop from the 855 rounds recorded from the same period in 2019, which in Q2 2019. The estimated total registered 1,656 rounds and $64.14bn. investment dollars stood at $25.69bn, down 14% from the $29.92bn recorded Emerging enterprises from the IT, during the same period last year. health and fintech sectors proved the The US hosted the largest number of most attractive for corporate venturers, funding rounds (279), while Japan came accounting for more than 100 deals in second with 135 deals, and China each. The top funding rounds by size third with 72 deals. were raised mostly by IT companies.

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Global view of deals

Total: 762 Sector Consumer 4 Energy 16 3 1 Financial 41 1 Health 279 Industrial 11 3 135 IT 9 72 Media 26 6 36 Services 1 2 2 2 Telecoms Transport 3 25 Utilities 1 1 9 1 8 4

Source: GCV Analytics

Historical view of deals

$42,463m 855 862 801 810 $40,000m 800 $34,215m 762 719

$30,000m 600 $25,692m $29,923m $29,550m

$24,691m Dollars Deal count 400 $20,000m

200 $10,000m

0 $0m Q1 Q2 Q3 Q4 Q1 Q2 2019 2020

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

Number of deals by sector Q2 2020

Health

Financial

Industrial

Services

Consumer

Media

Transport

Energy

Telecoms

0 20 40 60 80 100 120 140 160 180

Source: GCV Analytics

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Deals heatmap Financial Services IT Health Media Industrial Services Consumer Telecoms Transport Energy

Asia 106 66 21 64 37 47 41 24 13 5

North America 88 71 73 26 39 19 15 21 14 19

Europe 43 9 16 15 16 8 4 6 2 6

Middle East 10 8 1 2 10 1 6 3 1

South America 3 1 2 4

Africa 2 2 1 2 1 1

Australia/NZ 3 2 1 1 3 1

Eastern Europe 1

Source: GCV Analytics

Top investors By number of deals Alphabet 13 32 SoftBank 5 21 Salesforce 6 15 Mizuho Financial 5 14 Microsoft 5 10 Tencent 3 9 SBI Group 5 8 Goldman Sachs 3 7 Intel 6 7 Samsung 2 7 By dollars Alphabet Sector $3,009m Consumer SoftBank $2,401m Energy Financial Legend Holdings $662m Health Industrial Salesforce $633m IT Illumina Media $630m Services Tencent $557m Telecoms Transport Microsoft $554m Utilities Sompo Holdings $500m SDIC $496m Cisco Systems $480m Source: GCV Analytics

The most active corporate investors, in Salesforce. The list of corporate venturers turn, came from the financial services, IT involved in the largest deals by size was and health sectors. headed also by Alphabet, SoftBank and conglomerate Legend Holdings. The leading investors by number of deals were diversified internet conglomerate The lockdown measures across the globe Alphabet, telecoms firm SoftBank and and the looming economic downturn cloud enterprise software provider benefited some emerging businesses

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while threatening the existence of (under $10m), medium ($11-$99m) and others. Many corporate venturers who large (over $100m) deals. In Q1 and Q2, participated in our first GCV Digital the relative share of the three types Forum reported that they had first remained fairly stable and roughly in line looked to recapitalise existing portfolio with previous years. companies and then explore new investment opportunities. Most of the corporate investors taking minority stakes during the second GCV Analytics estimates suggest that quarter were investors that had done at between March and May roughly one in least one previous deal (76%). However, every four deals was a follow-on, with the one out of every four (26%) corporates other three new investments (or at least was disclosing its first minority stake the first round with disclosed corporate deal, even in this quarter. There appears backing). The latter should be taken with to be a trend of newcomers to venturing a grain of salt, because venture investors – whether having a specific venturing tend to remain discreet about much of unit or not – comprising roughly a fifth their investment activity. to a fourth of all corporate investors, Another interesting indicator to look from 2018 onwards. In previous years, at are the relative proportions of small the proportion of first-time corporate

First-time vs follow-on investors

Q1 Q2 100.0% 19% 21% 27% 24% 24% 80.0% 29%

60.0% 81% 76% 76% 79% 40.0% 73% 71%

20.0%

0.0% January February March April May June

Follow-ons New investment Source: GCV Analytics

Corporate-backed deals by size

100.0%

32% 35% 36% 37% 39% 80.0% 40% 42% 42% 42% 43%

60.0%

54% 40.0% 53% 51% 48% 51% 47% 51% 48% 48% 45% 20.0% 13% 12% 12% 14% 11% 12% 0.0% 11% 10% 10% 10% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020

Round size Less than $10m $10m-$99m $100m and larger Source: GCV Analytics

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First-time vs returning investors

800

177 187 181 121 133 143 600 140 134 102 63 89 52 49 74 400 597 611 549 540 553 589 569 580 582 464 468 491 478 200 451 No of corporate investors

0 1 10% 9% 14% 11% 16% 16% 17% 18% 20% 20% 22% 20% 24% 24% 0.8

0.6

90% 91% 86% 89% 84% 84% 83% 0.4 80% 80% 82% 78% 80% 76% 76%

0.2 % of corporate investors 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 2018 2019 2020

First-time investor Not first-time investor Source: GCV Analytics

investors was consistently lower than sequencing technology, reagents 20%. We are yet to see if this trend will and consumables for applications in continue during the downturn. life sciences, precision medicine and agriculture. The applications of the company’s systems range from mass Deals spectrometry and medical imaging to Most of the funding from the biggest laboratory automation. rounds reported in the first quarter went to emerging enterprises from the IT, China-based online tutoring service health and services sectors. Only one of Zuoyebang closed a $750m series the top 10 rounds stood above $1bn. E round that included SoftBank’s Vision Fund, according to a company MGI Tech, a gene sequencing technology post on WeChat. Private equity fund developer spun off by China-based FountainVest Partners and investment genomics services provider BGI, firm Tiger Global Management co-led completed a $1bn series B round. VC the round, which also featured Qatar group IDG Capital and private equity Investment Authority, Sequoia Capital fund CPE Capital co-led the round, China, Tiantu Capital and Xiang He which included investment bank China Capital. Zuoyebang operates a platform Renaissance’s New Economy Fund and where users can access online courses Goldstone Investment which, like CPE, is and homework assistance in addition to part of state-owned investment manager live tutoring through video. It claims 170 Citic. Huatai Securities’ private equity million monthly active users, 50 million arm, Huatai Zijin Investment Fund, filled daily active users and roughly 12 million out the round along with fund manager paying subscribers. Sailing Capital, private equity firm Co- Stone Asset Management, VC firm Green US-based stem cell medicine developer Pine Capital Partners and an entity called Sana Biotechnology closed its first Shanghai Guofang FoF. Formed in 2016, round, raising more than $700m from MGI Tech is working on high-throughput investors including GV, a corporate

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venturing subsidiary of Alphabet. The investors including GV, a corporate round also featured F-Prime Capital, a venturing subsidiary of Alphabet. VC fund owned by investment and financial firms Andreessen Horowitz, General services group Fidelity, as well as Canada Catalyst and Sequoia Capital also took Pension Plan Investment Board, Alaska part in the extension, having contributed Permanent Fund and the Public Sector to the $250m first close in September Pension Investment Board. Sana is 2019. The extra cash was provided at the working on technology intended to repair same $35bn pre-money valuation. Stripe and control genes in cells and replace provides payment processing technology missing or damaged cells to tackle the for online merchants. The funding will underlying causes of serious diseases, support a growth in the company’s ranging from cancer and central nervous operations as it deals with large amounts system conditions to heart disease and of offline commerce migrating online due various genetic disorders. to the lockdown.

US-based digital payment technology Insurance firm Sompo Holdings invested provider Stripe increased its series G ¥54bn ($500m) in a US-based data round to $850m, adding $600m from analysis services provider Palantir which

Top 15 deals Q2 2020

Source: GCV Analytics

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is reported to be lining up an initial in a deal valued at about $1.4bn that public offering. The deal comes after will allow medical researcher Qiagen Sompo and Palantir launched a Japanese to exit. The transaction will consist of joint venture in November 2019, and $325m in cash and 30 million shares of the companies said in a statement that Invitae stock, which rose 40% after the Palantir Japan’s duties have included announcement. Another 27 million shares work combatting Covid-19. Palantir are dependent on the completion of has built big data analysis software milestones. ArcherDX has created a range that uses artificial intelligence to sift of precision oncology products informed through massive amounts of structured by genetic sequencing technology and and unstructured data in order to find bioinformatics software to assist in informative patterns. Its customers cancer research. It has been preparing include US law enforcement agencies as a regulatory submission for its debut in- well as businesses such as Sompo. vitro diagnostics product in late 2020.

Networking equipment manufacturer Exits Cisco agreed to acquire ThousandEyes, GCV Analytics tracked 61 corporate- a US-based network management related exits during the second quarter software provider backed by Alphabet of 2020, including 32 acquisitions, and Salesforce. The price was reported 22 initial public offerings (IPOs), five to be approximately $1bn. Founded in mergers, one stake sale and one other 2010, ThousandEyes provides cloud transaction. Top exiting corporates this analytics software that collects data quarter were chipmaker Intel, Alphabet from a range of access points, such as and Salesforce. data centres and consumer devices, to identify potential sources of disruption The total estimated amount of exited and ensure websites, applications and capital in Q2 2020 was $11.41bn, services are delivered optimally. Cisco considerably lower than the $22.39bn in will integrate the company’s technology Q2 of the previous year and also lower into its new networking services division than the figure from the first quarter of and expects the combined capabilities this year ($20.9bn). Only two of the top to help clients accelerate their digital reported exits stood above $1bn. transformation.

Genetic information provider Invitae Israel-based urban mobility app agreed to acquire US-based genetic developer Moovit confirmed an testing technology developer ArcherDX acquisition by its existing shareholder,

Historical view of exits

$22,390m 86 $20,901m 81 80 $20,000m 72 61 61 60 $15,000m $16,386m 54 $10,808m Deal count Dollars 40 $11,414m $10,000m

$8,154m 20 $5,000m

0 $0m Q1 Q2 Q3 Q4 Q1 Q2 2019 2020

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Top exiting investors semiconductor producer Intel, for a total consideration of $900m. Intel paid By number of deals $840m, net of the equity gain of its Intel 4 corporate venturing unit Intel Capital. Alphabet 3 Salesforce 2 Founded in 2012, Moovit has built a SoftBank 2 real-time transit data app for users Microsoft 1 Samsung 1 that pulls in public traffic data and user-generated updates to calculate By dollars Alphabet $1,000m the most efficient routes. It also offers Salesforce $1,000m third-party business access for clients Legend Holdings $463m SoftBank $130m such as municipalities or ride sharing Microsoft Undisclosed providers. The service currently covers Source: GCV Analytics 3,100 cities in 102 countries and

Top 15 exits Q2 2020

Source: GCV Analytics

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attracted more than 800 million users Retirement services provider Empower – a sevenfold increase over two years. Retirement agreed to acquire Personal Intel will integrate Moovit’s enterprise Capital, a US-based digital wealth platform into its autonomous driving manager backed by financial services technology subsidiary Mobileye, turning firms BBVA, USAA and Power Financial it into a full-fledged mobility provider Corporation, for $825m.The deal consists with offerings such as robotaxi services. of $825m upfront, and Empower plans It will maintain the consumer app under to commit up to $175m more to drive the existing branding. business growth. Personal Capital has built a digital wealth management Payment services firm Mastercard agreed platform that aggregates a user’s to buy US-based financial data provider financial accounts and offers financial Finicity in an $825m transaction that will planning tools and recommendations enable credit scoring service Experian from investment advisers. It has more to exit. Finicity’s core business involves a than 2.5 million customers and manages digital budgeting platform that provides more than $12bn in assets. data to help users manage their finances more effectively, but it has added financial wellness tools and application Funding initiatives programming interfaces (APIs) that enable Corporate venturers supported a business to build their own financial data total of 59 fundraising initiatives in the apps. The company’s shareholders will second quarter, down from 81 initiatives have the chance to potentially get up to reported in the same period in 2019 and $160m in earn-outs depending on its the 77 reported in 2018. However, the performance post-acquisition. estimated total capital raised, $7.34bn,

Funding initiatives by quarter

81 80 77 71 8 9 69 70 68 64 66 63 8 16 10 11 59 60 7 20 15 18 9 16 22 16 11 40 Number of initiatives 51 54 46 47 20 43 39 39 39 34 37

0 20K $18,314m

15K

$10,448m 10K $9,390m $8,994m $17,809m $8,484m $7,518m $5,118m $7,342m $6,993m $6,739m $6,624m $2,036m Amount raised ($m) $2,110m $2,187m 5K $4,485m $7,507m $8,364m $6,033m $6,431m $6,741m $4,859m $5,263m $3,033m $3,662m 0K Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2020

Source: GCV Analytics

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Top 10 funding initiatives

Capital Targeted Name Type Location Backers Raised ($m) sector(s) Climate Pledge Fund VC Fund $2bn USA IT, Industrial, Energy Amazon Unspecified/Sector- Future Fund VC Fund $1.25bn UK British Business Bank (BBB) agnostic Pfizer Breakthrough VC Fund $500m USA Health Pfizer Growth Initiative VenBio Global VC Fund $394m USA Health undisclosed strategic investors | VenBio Partners Strategic Fund III Anti-Pandemic VC Fund $211m China Health Tencent Industrial, Services, Axa | Blue Like an Orange Sustainable Capital | BNP Paribas | Latin America Fund I VC Fund $200m USA Health CNP Assurances | HSBC | MACSF | SG Insurance Bpifrance | European Investment Fund (EIF) | Idinvest Partners Kurma Biofund III VC Fund $175m France Health | Kurma Life Science Partners | NRW Bank | Pasteur Institute | Servier Laboratories Cayman Unspecified/Sector- Creacion Ventures VC Fund $155m WuXi AppTec Islands agnostic 1868 Ventures CVC Unit $150m USA Industrial Scotts Miracle-Gro | Touchdown Ventures Financial, IT, FIS Ventures CVC Unit $150m USA FIS Services

Source: GCV Analytics

was roughly 11% higher than last year’s The UK government announced up to Q2 figure of $6.62bn. £1bn ($1.25bn) in support for innovative companies affected by the Covid-19 The initiatives in question included 39 pandemic called the Future Fund. The announced, open and closed VC funds government is putting up £250m for with corporate limited partners (LPs), 11 the initiative, which will offer convertible new corporate venturing units and six debt financing to domestic startups accelerators, among other. affected by the Covid-19 pandemic. The US-based e-commerce, cloud computing Future Fund will provide loans sized and consumer device group Amazon between £125,000 and £5m to UK- launched a $2bn investment fund that based companies in partnership with the will back developers of products that state-owned British Business Bank, in the support carbon reductions. The Climate form of co-investment, matching capital Pledge Fund will target transportation, supplied by private investors to make logistics, manufacturing, materials, food £500m theoretically available. The loans and agriculture technology developers, have a 36-month maturity period and those engaged with clean power will comprise unsecured bridge funding production and storage and with the that will be converted to an equity stake circular economy. Amazon’s business in the recipients’ next equity round, with now encompasses its Amazon Web a minimum conversion discount of 20%. Services cloud offering and consumer Companies will have needed to have devices Echo, Fire and Kindle. Its market raised at least £250,000 in the past five cap has expanded to $1.38 trillion in years and have a ‘substantive’ economic recent weeks as Covid-19 lockdowns base in the UK to qualify for the loans. increase remote buying patterns. The US-based pharmaceutical firm Pfizer launch of this fund comes after Amazon pledged to invest up to $500m in formed a unit called Alexa Fund in 2015 biotech companies while also providing to back startups working on products expertise, through a scheme dubbed that can be integrated with its intelligent Pfizer Breakthrough Growth Initiative. voice assistant, Alexa. Pfizer intends to acquire minority stakes

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in publicly listed companies with small development accelerator that to medium-sized market caps that launched with $125m in seed funding. are at the clinical stage with internal Philanthropic organisation the Bill and medicine, inflammation, immunology Melinda Gates Foundation and life cancer and rare disease drugs, vaccines science research charity the Wellcome and hospital-related products. The Trust have each contributed $50m to company is already an active investor the scheme. in the healthcare VC space, both off its own balance sheet and through Pfizer Ventures, the CVC subsidiary it established in 2004. Pfizer’s last exit was in a $75.2m initial public offering by haemoglobinopathy medicine developer Imara in March.

US-based VC firm VenBio Partners closed its third fund at $394m, with undisclosed pharmaceutical companies among the LPs. Founded in 2011, Mastercard has committed $25m to a covid-19 VenBio Partners invests in life sciences related accelerator technology developers, generally concentrating on companies working on biopharmaceuticals for unmet medical Luxembourg-based investment firm needs. It typically leads or co-leads Blue Like an Orange Sustainable Capital rounds and has secured about $1bn in has closed a Latin America-focused capital across its funds. VenBio Global fund with LPs including insurers Axa, Strategic Fund III’s LPs also include BNP Paribas Cardif, CNP Assurances unnamed financial institutions, corporate and SG Insurance at $200m. Financial pension funds, family offices, funds-of- services firm HSBC, pension fund funds, endowments and foundations. MACSF and family offices for Ronald Cohen and Ray Chambers also made Internet company Tencent announced commitments to the Latin America the launch of the Global Anti-Pandemic Fund I along with undisclosed additional Fund, a $100m program, having investors. Founded in 2017, Blue Like previously set up a $211m Anti- an Orange concentrates on mezzanine Pandemic fund to support healthcare financing deals supporting the United workers in its native China. The Nations’ Sustainable Development country’s second-richest man and Goals mandate. The firm has already Alibaba founder Jack Ma donated invested more than $80m out of Latin RMB100m ($14.4m) to help invent a America Fund I and concentrates on vaccine for covid-19. Alibaba will lend areas including access to finance for the nearly $3bn to small companies and unbanked as well as infrastructure-as- covering purchases of medical supplies a-service, agricultural, healthcare and from its ecommerce platform and education technology. overseeing shipping logistics using a fund of more than $140m established VC firm Kurma Partners achieved an on January 25 to fight the coronavirus. oversubscribed €160m ($175m) close Fellow tech firms Netflix and Facebook for its third therapeutics-focused fund also launched $100m funds. Payment with LPs including pharmaceutical services firm Mastercard committed developer Servier Laboratories. $25m to Covid-19 Therapeutics Research organisation Pasteur Institute, Accelerator, a US-based drug state-owned investment bank Bpifrance

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and its Investissements d’Avenir will generally make investments sized scheme, the EU-owned European between $250,000 and $2.5m for a first Investment Fund (EIF), German regional deal, with capital reserved for follow-on public development bank NRW.Bank investments. It is prioritising portfolio and VC firm Idinvest Partners have companies in North America. also backed the fund. Kurma Biofund III will typically invest $10.9m per deal, US-based financial technology provider aiming to assemble a 12 to 15-strong FIS announced a $150m commitment to portfolio comprising mainly early- CVC subsidiary FIS Ventures. The $150m stage companies. The fund has already is a target for the unit’s investment over helped launch five biotech companies the next three years, and its priority areas across France, Germany and Belgium. include distributed ledger technology, It has also participated in three funding financial inclusion, artificial intelligence rounds, including a series C for acute and machine learning, data and analytics, kidney injury drug developer AM- security, privacy, digital enablement and Pharma that raised $182m following a automation. The announcement marks $130m first close. the official launch of FIS Ventures, though the company revealed in January 2020 Pharmaceutical firm WuXi AppTec that the unit would be overseeing the provided $5m for Cayman Islands- fifth iteration of its FIS Fintech Accelerator registered VC firm Creacion Ventures’ this year. FIS was revealed as one of the first fund through affiliate Wuxi investors in the $35m series B round PharmaTech Healthcare Fund I, closed by Africa-focused payment according to a stock exchange filing. technology provider Flutterwave, FIS The filing states Creacion Ventures has Ventures’ first deal. so far raised approximately $155m for the fund, which has a $200m target Some big corporates announced small or according to a separate regulatory filing undisclosed deals. in January this year.

US-based garden and lawn product maker Scotts Miracle-Gro formed a $50m CVCl vehicle called 1868 Ventures in partnership with corporate VC services provider Touchdown Ventures. Scotts Miracle-Gro oversees a range of brands that collectively offer lawncare and gardening products such as fertiliser, soil and nutrients, pest and weed control,

and equipment for indoor or hydroponic Flutterwave was FIS Ventures’ first deal gardening. 1868 Ventures will target technologies such as plant genetics, natural fertiliser and plant control Alphabet announced 11 startups products, sustainable packaging and chosen for the first batch of its Google systems that can support plant growth for Startups Accelerator, which focuses in controlled environments. Portfolio on sustainable development goals companies will be able to access Scotts (SDGs). The five-month initiative received Miracle-Gro’s expertise in areas like 1,200 applications from Europe, the product development, marketing, Middle East and Africa. Entrants were retail and distribution. Partnership scrutinised against SDG criteria such opportunities will also be available. as fighting poverty and fostering peace. The fund will be stage-agnostic but Google for Startups Accelerator began in April and participants will represent

www.globalcorporateventuring.com 98 Global Corporate Venturing July-August 2020

Germany, the UK, France, Kenya, Nigeria, opportunities and partnerships. Sequoia Israel, the Netherlands and Pakistan. Capital China is an offshoot of US-based The accelerator will lend expertise on VC firm Sequoia Capital. Starbucks business, IT and SDG-related topics runs 4,200 stores across 177 Chinese to startups, relying on digital systems cities and offers home delivery through during the Covid-19 pandemic. a partnership with e-commerce firm Alibaba. It plans to access local startups US-based social media company in order to boost digital innovation in Facebook has begun setting up the country, which it described one of a CVC unit dubbed New Product its two lead growth markets, along with Experimentation (NPE) subsidiary, which the US. The corporate aims to digitise was formed to launch consumer-focused the management of its outlets in the apps. The fund will be partially managed country while also exploring data-driven by Shabih Rizvi, who spent two years as optimisation of its inventory and supply founding partner at internet technology chain. Portfolio companies will gain access provider Google’s artificial intelligence to its retail infrastructure and expertise. fund, Gradient Ventures, before moving to a business development role at US-based talent agency Creative Artists Google in April 2019. Facebook is Agency (CAA) formed an investment reportedly pursuing investments as a vehicle with venture capital firm New method of keeping track with emerging Enterprise Associates (NEA), launched technologies, rather than operating a with $100m in capital. Connect Ventures general-purpose fund. It will make small will leverage the existing relationships investments in early-stage companies. CAA has in the sports and entertainment US-headquartered coffee shop chain industries and plans to invest up to Starbucks will start corporate venturing in $400m through the venture. The fund China after signing a co-investment deal will be run by Rick Yang, the NEA general with venture capital firm Sequoia Capital partner who is also the firm’s head of China. The pact provides Starbucks with consumer investing, while CAA’s end strategic access to local food and retail will be overseen by its new head of technology startups through investment consumer investments, Michael Blank.

www.globalcorporateventuring.com 99 Global Corporate Venturing July-August 2020

Pandemic shock still lingers in June > Deals up 15% in dollars, still down in numbers (y-o-y) > Comparable number of exits vs same month last year > More funding initiatives reported than in past months

Kaloyan Andonov The effects of the Covid-19 pandemic conglomerate Alphabet, telecoms group Reporter and the global lockdown are still SoftBank and financial conglomerate noticeable in June, though our Mizuho. For involvement in the largest data suggest investment activity is deals, SoftBank topped the list with beginning to pick up, so the shock may Alphabet and insurer Sompo Holdings. be just beginning to slowly fade away. GCV Analytics reported 20 corporate- According to GCV Analytics, the number backed funding initiatives in June, of corporate-backed deals was 249, including VC funds, new venturing units, down 9% from the 273 rounds from the incubators, accelerators and others. This same month last year. Investment value figure suggested a 17% drop compared increased by 15% at $9.56bn – up from with June 2019 which had registered 24 the $8.34bn in June 2019. Compared with initiatives. The estimated capital raised May, June registered fewer (249 vs 270). in those initiatives amounted to $3.6bn, The US came first in the number of considerably above the $2.66bn during corporate-backed deals, hosting 107 the same month last year. rounds, while Japan was second with 39 This may be an early sign of fundraising and China – third with 18. activity aimed to take advantage of The leading corporate investors opportunities created by the downturn by number of deals were internet and the haste to rescue companies

www.globalcorporateventuring.com 100 Global Corporate Venturing July-August 2020

Global view of deals

Total: 249

Sector Consumer 2 Energy 3 Financial 16 107 4 Health 5 Industrial 39 5 3 18 IT 7 3 Media 10 Services 1 1 Telecoms Transport 4 1 4 Utilities 4 3 1

Source: GCV Analytics

affected by the pandemic. There are also round that included telecoms group near-future opportunities in the low- SoftBank’s Vision Fund, according to interest rate environment. a company post on WeChat. Private equity fund FountainVest Partners and investment firm Tiger Global Management Deals co-led the round, which also featured Emerging businesses from the IT, health, Qatar Investment Authority, Sequoia financial services and the media sectors Capital China, Tiantu Capital and Xiang He raising the largest number of rounds. Capital. Zuoyebang operates a platform The most active corporate venturers where users can access online courses came from the financial, IT, health and and homework assistance plus live industrial sectors. tutoring through video. It claims 170 China-based online tutoring service million monthly active users, 50 million Zuoyebang closed a $750m series E daily active users and roughly 12 million

Historical view of deals

2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 $17,974m 299 $14,944m 298 305 300 $14,386m 284 273 277 280 233 281 270 269 263 269 270 259 $12,570m 249 $15,000m $11,958m 243

200 187 $9,365m $8,648m $8,838m $7,891m $10,000m Dollars Deal count $9,945m $9,885m $9,563m $9,019m $9,546m $8,335m $8,945m 100 $7,435m $7,291m $5,000m

0 $0m l y J u M a y M a y A p r i l A p r i l o b e r J u n e J u n e n u a r y n u a r y e m b r M a r c h M a r c h c t A u g s t e b r u a y e b r u a y J a J a O F F N o v e m b r D e c m b r S e p t

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

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Deals June 2019 vs June 2020

300 $9,563m $10,000m 273 $8,335m 249 250 $8,000m

200 $6,000m 150 Dollars Deal count $4,000m 100

$2,000m 50

0 $0m June 2019 June 2020

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

Top investors in June

By number of deals Alphabet 5 10 SoftBank 4 10 Mizuho Financial 2 2 5 Salesforce 2 2 5 Citigroup 4 4 Comcast 2 4 Optum 4 4 Digital Garage 1 1 1 3 Microsoft 2 3 Toshiba 1 1 1 3

By dollars SoftBank Sector $1,312m Consumer Alphabet $1,210m Energy Sompo Holdings Financial $500m Health Legend Holdings Industrial $482m IT Kaiser Permanente $333m Media Services FedEx $300m Telecoms Gilead Sciences Transport $275m Utilities Bertelsmann $250m Progressive Insurance $241m Optum $226m Source: GCV Analytics

paying subscribers. The company was F-Prime Capital, a fund owned by formed by internet group Baidu in 2014 investment and financial services group and spun off a year later. The valuation Fidelity, Canada Pension Plan Investment for the round was not confirmed. Board, Alaska Permanent Fund and the US-based stem cell medicine developer Public Sector Pension Investment Board. Sana Biotechnology closed its first round, Baillie Gifford, Arch Venture Partners, raising more than $700m from investors Flagship Pioneering, Bezos Expeditions, including GV, a corporate venturing Omega Funds, Altitude Life Science subsidiary of internet technology group Ventures and several undisclosed Alphabet. The round also featured institutional investors filled out the round.

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Monthly funding initiatives

2019 Q1 Q2 Q3 Q4

40 38

32 6 4 30 28 6 25 25 24 25 25 4 7 20 8 19 19 9 6 20 18 6 4

25 Number of initiatives 10 19 18 19 18 15 14 14 15 14 15 12 0

10K $9,816m

8K $7,556m

6K $5,095m $9,509m $1,809m $3,841m 4K $3,258m $7,476m

Amount raised ($m) $2,660m $2,592m $2,009m $2,096m $2,065m $1,899m $2,052m 2K $1,192m $3,218m $1,300m $2,660m $953m $3,147m $1,762m $1,611m $1,382m $1,902m 0K $1,249m $796m $825m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2020 Q1 Q2 Sana is working on technology intended to repair and control genes in cells 40 and replace missing or damaged cells to tackle the underlying causes of 30 27 25 serious diseases, ranging from cancer and central nervous system conditions 5 21 20 7 18 to heart disease and various genetic 20 16 7 7 disorders. The funding will go to

Number of initiatives advancing the startup’s core platforms, 10 15 13 14 15 including those focusing on gene 9 10 0 delivery, immunology, stem cell biology and gene modification and control. 10K China-based ride hailing service Didi 8K Chuxing spun off an autonomous driving technology developer with more

6K $5,157m than $500m from a funding round led by SoftBank’s Vision Fund II. Didi 4K $3,600m began testing autonomous driving $2,764m Amount raised ($m) $2,363m $4,780m software in 2016 and channelled it into 2K $1,474m $978m $3,243m a separate entity in 2019. The funding $2,111m $2,520m $1,474m 0K $978m will be used to help the company Jan Feb Mar Apr May Jun expand R&D spending, conduct more tests on the technology and form Accelerator CVC Unit Incubator Other VC fund additional partnerships within the Source: GCV Analytics automotive industry as it looks to bring

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the introduction of the technology law enforcement agencies as well as within China nearer. The partnerships businesses such as Sompo. would focus on the mass production of driverless vehicles which would US-based crop sustainability product hypothetically reduce the costs of Didi’s supplier Indigo received about $300m in business significantly while using its series F funding from investors including fleet management and passenger safety logistics services firm FedEx, at a $3.5bn experience. Didi has received regulatory post-money valuation. FedEx took part in approval to test its technology in three the round’s $200m first close in January, Chinese cities in addition to California. contributing to the $175m equity portion The subsidiary has partnerships in place along with Flagship Pioneering and with Didi’s auto repair and maintenance Alaska Permanent Fund. The latter two subsidiary, Xiaoju Automobile Solutions, joined Riverstone Holdings in the second and financial services platform Didi tranche of the round, which reportedly Finance. has a $500m target. Formerly known as Symbiota, Indigo offers agronomic tools Insurance firm Sompo Holdings invested and services for farmers including aerial ¥54bn ($500m) in a US-based data imagery, crop health data and microbial analysis services provider Palantir which products that improve crop yields. It is reported to be lining up an initial also maintains an online marketplace public offering. The deal comes after for grain trading. The marketplace was Sompo and Palantir launched a Japanese launched in September 2018 alongside joint venture in November 2019. The the completion of a $250m series companies said in a statement that E round featuring Indigo’s founding Palantir Japan has worked to combat investor, Flagship Pioneering, as well as Covid-19. Palantir did not disclose the Alaska Permanent Fund, Baillie Gifford valuation at which either corporate and Investment Corporation of Dubai. invested. Founded in 2004, Palantir has built big data analysis software that China-based semiconductor technology uses artificial intelligence to sift through developer Eswin Computing Technology massive amounts of structured and raised more than RMB2bn ($282m) unstructured data to find informative in a series B round co-led by Legend patterns. Its customers include US Capital, the venture capital firm formed

Deals by sector

20 10

0 Health IT Financial Media Industry Services Energy Consumer Transport Telecoms

Source: GCV Analytics

www.globalcorporateventuring.com 104 Global Corporate Venturing July-August 2020

Deals heatmap Financial Services IT Health Industrial Media Telecoms Services Consumer Energy Transport

North America 34 24 28 9 11 9 9 6 10 4

Asia 30 17 4 13 19 12 12 7 1 2

Europe 12 3 7 12 4 3 4 3 3 1

Middle East 3 2 1 1 1 1

South America 1 1 2

Australia/NZ 1 1 1

Africa 1 1

Source: GCV Analytics

by conglomerate Legend Holdings. VC can exercise its option at any point up group IDG Capital co-led the round, to the completion of phase 1b clinical which also featured Beijing Xindongneng trials for Pionyr’s two lead assets. Investment Fund, a vehicle backed Founded in 2015, Pionyr is working on by electronic components producer cancer treatments that are intended BOE Technology. Riverhead Capital, to promote anti-tumour immunity Lighthouse Capital, Triniti Capital, Broad in patients who do not benefit from Vision Funds and undisclosed additional checkpoint inhibitor therapies. Its lead investors filled out the round. Founded candidates are aimed at solid tumours in 2016, Eswin is working on integrated and have shown promise in preclinical chips for use in applications such as studies. The company advances research artificial intelligence-powered data by Max Krummel, a professor in the processing, wireless connectivity, displays Department of Pathology at University and video. It also offers packaging of California, San Francisco and Sachdev and testing services. The funding will Sidhu, a professor in the Department go toward R&D activities, supporting of Molecular Genetics and the Donnelly intellectual property development, Center at University of Toronto. covering video streaming expenses, increasing headcount, enhancing US-based mobile bank Varo Money the company’s product offering and completed a $241m series D round that strengthen its market position. included automotive insurance provider Progressive. Investment firm Gallatin Biopharmaceutical firm Gilead Sciences Point Capital co-led the round with agreed to pay $275m for a 49.9% stake private equity group TPG’s The Rise Fund, in US-based immuno-oncology therapy while private equity firm HarbourVest developer Pionyr Immunotherapies as Partners also participated. JP Morgan part of a wider agreement. The deal was placement agent. Varo operates a gives Gilead the option to fully acquire digital bank that offers bank and savings Pionyr for a further $315m. The latter’s accounts with no overdraft, transfer shareholders could eventually earn or foreign transaction fees, through a a total of $1.47bn in option exercise partnership with financial services firm fees and milestone payments. Gilead Bancorp. The company has applied for

www.globalcorporateventuring.com 105 Global Corporate Venturing July-August 2020

Top 10 deals

Source: GCV Analytics

a national bank charter and expects to developing solid-state batteries that become the first digital bank in the US would use solid electrodes and a solid to receive such a charter, at which point electrolyte, in theory offering greater it will begin introducing credit cards energy density than the lithium-ion and loans in addition to more savings batteries generally used for electric, products. which use liquid or polymer gel electrolytes. The company was spun US-based digital health insurance out of Stanford University in 2010 and provider Oscar completed a $225m began collaborating with Volkswagen round, featuring internet and technology two years later, before the carmaker group Alphabet that took its total funding invested $100m in QuantumScape to $1.53bn. VC firms General Catalyst, in mid-2018. The 2018 investment Khosla Ventures, Lakestar and Thrive was provided in connection with a Capital also took part in the round, as partnership agreement that will involve did investment management firms Baillie the companies working together on the Gifford and Coatue Management. Oscar industrial-level manufacturing of solid- operates an online health insurance state batteries for Volkswagen vehicles, service with 420,000 members across and they said this week they intend to 15 US states, offering plans tailored for establish a pilot facility soon. individual, family and business. Users can also access telemedicine treatment free of charge and schedule medical Exits appointments through the app. GCV Analytics tracked 24 exits involving corporate venturers as either acquirers Automotive manufacturer Volkswagen or exiting investors in June. The revealed invested up to $200m in US- transactions included 13 initial public based solid-state battery developer offerings (IPOs), nine acquisitions and and existing portfolio company two mergers. QuantumScape. QuantumScape is

www.globalcorporateventuring.com 106 Global Corporate Venturing July-August 2020

The exit count figure was higher than in also filed for a $100m initial public May, which recorded 20 exits. The total offering earlier. estimated exited capital also increased substantially to $7.18bn, up 130% from Payment services firm Mastercard to $3.1bn in the previous month. In agreed to buy US-based financial data comparison, during the same month of provider Finicity in an $825m transaction 2019, the exits count was 28 and the that will enable credit scoring service estimated total capital stood at $6.02bn. Experian to exit. Finicity’s core business involves a digital budgeting platform Genetic information provider Invitae that provides data to help users manage agreed to acquire US-based genetic their finances more effectively, but it testing technology developer ArcherDX has added financial wellness tools and in a deal valued at about $1.4bn that application programming interfaces will allow medical researcher Qiagen (APIs) that enable businesses to build to exit. The transaction will consist of their own financial data apps. The $325m in cash and 30 million shares of technology powers Experian Boost, Invitae stock, which have risen some 40% which allows customers to connect since the announcement, in addition utility bill payments to their online bank to 27 million more shares dependent accounts to enhance their credit scores. on the completion of milestones. Mastercard will integrate it into its ArcherDX has created a range of open banking offering. The company’s precision oncology products informed shareholders will have the chance to by genetic sequencing technology and receive up to $160m in earn-outs. bioinformatics software to assist in cancer research. It had been preparing Retirement services provider Empower a regulatory submission for its debut Retirement agreed to acquire Personal in-vitro diagnostics product in late Capital, a US-based digital wealth 2020. The company was launched in manager backed by financial services 2015 when Qiagen bought the Enzyme firms BBVA, USAA and Power Financial Solutions division of biological research Corporation, for $825m.The deal consists technology provider Enzymatics. It had of $825m upfront, and Empower plans

Monthly exits

2019 2020 Q1 Q2 Q3 Q4 Q1 Q2 $12,949m 38 40 $10,763m $10,199m 32 30 28 29 $10,000m 26 $7,946m $7,184m 24 25 24 24 24 20 $8,362m 20 20 19 19 18 17 Deal count 16 Dollars $5,000m $3,322m $6,021m$3,201m $3,370m 12 10 $1,146m $3,420m $3,106m $2,302m $2,340m 0 $1,583m $1,716m $1,124m $0m r l l y s t e r e r J u l M a y M a y A p r i A p r i o b e r m b e J u n e J u n e e M a r c h M a r c h c t b r u a y b r u a y A u g v e m b c e m b e e J a n u r y J a n u r y O F F N o D e S e p t

Consumer Financial Industrial Media Telecoms Energy Health IT Services Transport Source: GCV Analytics

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Top 10 exits

Source: GCV Analytics

to commit up to $175m more to drive closed its IPO at about $487m. Its business growth. Personal Capital has backers include pharmaceutical firms built a digital wealth management Johnson & Johnson and Eli Lilly. The platform that aggregates a user’s IPO consisted of approximately 21.2 financial accounts and offers financial million American depositary shares, planning tools and recommendations representing two common shares each, from investment advisers. It has on the Nasdaq Global Select Market, more than 2.5 million customers and priced at $23.00 each, above the $18 manages more than $12bn in assets. to $20 range it had set initially. Legend Empower facilitates employer-sponsored Biotech is working on cancer treatments retirement plans and allows customers and will put up to $185m of the IPO to manage individual retirement proceeds into clinical development of accounts. It will integrate the company’s its lead drug candidate, LCAR-B38M/ capabilities into its own offering but JNJ-4528, which it is developing in Personal Capital will continue to offer its partnership with Janssen Biotech, a services to its users. subsidiary of Johnson & Johnson.

Legend Biotech, a cellular therapy Vroom, the US-based automotive developer spun off by China-based e-commerce platform that counts car biotech producer Genscript Biotech, dealership owner AutoNation as an

www.globalcorporateventuring.com 108 Global Corporate Venturing July-August 2020

investor, also went public in a $468m to their applications enabling users to IPO on the Nasdaq Global Select Market. communicate with each other online The company increased the number of through video in real time. shares in the offering from 18.8 million to 21.25 million, and priced them at $22 Forma Therapeutics, a US-based cancer each, above the $18 to $20 range it had and haematologic disease therapy set, itself an extension of the $15 to $17 developer backed by pharmaceutical range on which it had originally decided. firms Novartis and Eli Lilly, completed a The offering valued the business at more $319m IPO. The company expanded the than $2.5bn. Vroom’s online platform size of its IPO from 11.8 million to 13.9 allows users to buy reconditioned million shares, pricing them above the vehicles from sellers including dealers, its initial range at $20 each. Joint book- car rental services and auctions. It running managers Jefferies, SVB Leerink increased revenue from $855m in 2018 and Credit Suisse have taken up the to $1.91bn the following year, though over-allotment option and purchased its net loss also rose, from $85.2m to another 2.09 million shares in Forma. $143m over the same period. Founded in 2007, Forma intends to channel at least $115m of the IPO Spot, an Israel-based workload software proceeds into a phase 1 clinical trial for provider that agreed to an acquisition by lead drug candidate FT-4202 in sickle cell cloud data services provider NetApp sized disease, and $15m into a phase1 trial for at $450m, giving an exit to semiconductor another candidate, FT-7051, in prostate producer Intel. Founded in 2015 as cancer. The offering was preceded by Spotinst, Spot has built an infrastructure- about $144m from investors including Eli as-a-service software platform that Lilly subsidiary Lilly Ventures, Novartis’s enables clients to continuously and Option Fund and Venture Fund, and automatically optimise cloud computing biopharmaceutical company Cubist resources. NetApp expects the acquisition Pharmaceuticals. to drive cost savings of up to 90% on its clients’ cloud computing and storage expenses, by reducing the amount of idle and overprovisioned resources they maintain.

China-based video communication technology provider Agora, backed by quantitative trading firm Susquehanna International Group, floated on the Nasdaq Global Select Market in a $350m IPO. The offering consisted of 17.5 million Two of Novartis’s funds were invested in American depositary shares (ADSs), each Forma Therapeutics representing four ordinary shares, priced at $20each, above the $18 to $20 range the company had set. The IPO price Avidity Biosciences, a US-based muscle valued Agora at $2bn. Existing backers disease drug developer backed by Coatue Management, Neumann Capital pharmaceutical firms Eli Lilly, EMS, and an affiliate of Vitruvian Partners had ST Pharm and Takeda, floated on the agreed to buy $50m, $30m and $30m Nasdaq Global Market in a $259m IPO. of shares respectively through a private The offering came after a considerable placement concurrent to the IPO. Agora hike in its size, Avidity having increased produces software that allows developers the number of shares from 10 million to add video engagement functionality to 14.4 million before pricing them at

www.globalcorporateventuring.com 109 Global Corporate Venturing July-August 2020

$18.00 each, above the IPO’s $14 to offering consisted of 16 million ADSs – $16 range. Founded in 2013, Avidity each representing five ordinary shares is developing therapeutics that use – priced at $16.00 each. The company oligonucleotides – short strands of DNA had originally planned to issue 13 or RNA molecules – while incorporating million ADSs priced at $11.50 to $13.50. the tissue selectivity of monoclonal The IPO price included 1.31 million ADSs antibodies. Although the company bought by Genetron’s shareholders, is targeting a range of diseases, its including 1.25 million by Vivo Capital initial drug candidates are focused on Fund. Genetron is developing precision muscle atrophy. It will put $65m of the oncology therapies and diagnostics IPO proceeds into a phase 1/2 clinical products using molecular profiling. It trial for its lead candidate, a myotonic will put 40% of the IPO proceeds into dystrophy treatment dubbed AOC 1001. product and technology development and 30% toward sales and marketing Genetron Health, a China-based while 30% will be used as working precision cancer treatment developer capital. backed by gene engineering services provider Vcanbio Cell & Gene Note: Monthly data can fluctuate as Engineering, has raised $256m in an additional data are reported after each IPO on the Nasdaq Global Market. The issue of GCV magazine goes to press.

www.globalcorporateventuring.com 110 Digital Forum 29 September 2020 | Worldwide

The online gathering of the corporate venturing industry across the world

on 29 September (with preferable access for Asia early in the day and the Americas later in the day), enabling the world to shape and share how innovation can impact the pressing societal and economic needs we all face coming out of the coronavirus pandemic.

Industry leaders will be sharing their thought-leadership, portfolio companies and startups will debate with the world’s best investors, and all delegates will be able to network via the intuitive online platform, Connecting in new and different ways is the which will also feature the GCV Connect and requirement across all levels during these GCV Analytics tools. All of the content will unprecedented times. Combining this desire remain available for delegates to access for for connectivity in the corporate venturing a period after the event has taken place. ecosystem with high-quality online event technology for both content and communication, we have the Global Corporate Venturing Digital Forum.

By using a comprehensive virtual platform, the Global Corporate Venturing Digital Forum will bring the best of ‘in-real-life’ events together once again for an online conference and entrepreneur-investor discussion on 29 September, following the success of the first GCV Digital Forum in June.

The global audience will come together from 08:30 in the UK’s British Summer Time

Find out more and register now at www.gcvdigitalforum.com