3Q Data: Corporate Venture Participation Jumped to Over One Fifth of All Venture Deals in 3rd Quarter

Corporate venture groups deployed $2.3 billion in 240 deals to the startup ecosystem during the third quarter of 2015, accounting for 14.1% of all venture capital dollars invested and 21.5% of all deals, according to the MoneyTree Report™ from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data provide by Thomson Reuters.  Through the first three quarters, a combined 181 corporate venture groups participated in 20.5% of all deals and accounted for 13.6% of the total venture dollars deployed to startups in 2015.   

“Participating in over a fifth of all venture deals for the quarter and year, corporate venture activity continues to pick up steam, deploying capital and strategic guidance to the next crop of great American companies,” said Bobby Franklin, President and CEO of NVCA.  “Although software companies continue to receive the most attention, clean tech and other energy companies appear to be the direct beneficiaries of increased corporate venture activity, attracting almost half of all their funding from corporate venture groups.  If past is prologue, we expect to see corporate venture groups remain quite bullish on clean tech companies and continue to be over-weighted in the energy sector as compared to overall venture activity.”

Industry Analysis

In keeping with overall investing trends, software companies continue to receive the largest amount of corporate venture investment, attracting $2.2 billion in 298 deals through the first three quarters, representing 33.8% of all corporate venture dollars deployed.  As has been the case in recent quarters, we are seeing outsized participation by corporate venture groups in the energy sector, with energy companies attracting $1.2 billion in 35 deals, which accounts for 18.2% of all corporate venture investment through the third quarter.  As an indication of just how active corporate venture groups are in the energy sector, corporate venture groups accounted for almost half of all venture capital investment activity in energy companies so far this year.  Biotechnology companies have received the third largest amount of corporate venture investment so far this year, attracting $1.0 billion in 106 deals, representing 15.6% of all corporate venture investment.

Corporate venture investing in the life sciences space, which includes biotechnology and medical device companies, stands at $1.2 billion in 140 deals for the year, representing 14.7% of all venture dollars deployed and 23.3% of all deals in life sciences investing.

By Stage of Investment

Reports that corporate venture groups are beginning to get involved in earlier stage investing is supported by recent data.  While corporate venture groups are still over-weighted in later stage deals compared to overall venture investing (39.1% versus 27.1%), through the first three quarters of 2015, 26.7% of all corporate venture dollars have gone to early stage companies while 33.5% have gone to expansion stage companies.

The MoneyTree Report™ from PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA) releases corporate venture investment data each quarter. Visit NVCA’s research site to download the data set: http://nvca.org/research/corporate-venture/. 

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