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 Our Slack channel features news Our Instagram features charts and updates and Q&As: event details: gcventuring.slack.com instagram.com/ globalcorporateventuring/ www.globalcorporateventuring.com 5 Global Corporate Venturing July-August 2020 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. www.globalcorporateventuring.com 6 Global Corporate Venturing July-August 2020 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